A reckoning with budding parallels to the Dotcom Bubble & Bust, while other sectors continue to grow. Unemployment rate rose to 3.9%.
By Wolf Richter for WOLF STREET.
In San Francisco and the northern part of Silicon Valley, one of the epicenters of tech jobs in the US, has seen large scale declines of jobs in tech, social-media, and finance since the end of the pandemic hiring boom in mid-2022 despite the AI-related hiring boom.
And August made it a lot worse with large month-to-month drops of jobs in Information (-1.2%) and in Professional, Scientific, and Technical Services (-1.1%), according to the Establishment Survey by the Bureau of Labor Statistics for the metropolitan division “San Francisco-Redwood City-South San Francisco,” which spans San Francisco County and San Mateo County. The data was released on Friday.
Even growth in other segments – such as Healthcare; Leisure & Hospitality; Education; Other Services; and Trade, Transportation, and Utilities – has not been able to make up for the sharp declines in the tech and social media-rated jobs.
Jobs in the Establishment Survey are tracked by business location, regardless of where the worker lives. If a worker commutes from the East Bay to an office in San Francisco, it counts as a job in San Francisco, though the worker lives elsewhere. Same with remote workers. An employee assigned to an office in San Francisco but working remotely somewhere else counts as a job in San Francisco. Conversely, workers who live in San Francisco but are assigned to an office somewhere else count as jobs at those locations, and not in San Francisco.
So a large portion of these jobs that got cut could have been remote workers — people living somewhere else — but not all because the overall unemployment rate of people who actually live in the metro also rose. More in a moment.
Information: -1.2% in August from July; -8.2% year-over-year; -20% (-26,100 jobs) from the peak in August 2022, down to 105,300 workers, the lowest since January 2020.
The sector includes facilities where people primarily work on web search portals, data processing, data transmission, information services, software publishing, motion picture and sound recording, broadcasting including over the Internet, and telecommunications.
This sector still accounts for over 10% of private sector employment in the metro, but down from a share of 12.5% in mid-2022. It plays an outsized role in the metro: In the US overall, it accounts for only about 2% of total nonfarm payrolls.
The chart goes back to 1998 to encompass the effects of the Dotcom Bubble and Bust. The bubble was swift, the bust was long. By the time it was all said and done in 2011, eleven years after the bust began, the Information sector had lost 45% of its jobs! That was more than double the rate of the job losses so far (20%).
This time around, the hiring boom was long and huge and culminated with a helter-skelter hiring frenzy – instead of mass layoffs – during the pandemic when workers were hired to work remotely doing who knows what, perhaps multiple full-time jobs simultaneously, because companies were losing control during the frenzy.
Then reality re-cropped up in mid-2022, and companies began to shed the excesses, famously Twitter, headquartered in San Francisco, which fired over half its global staff and thousands of contractors in one fell-swoop after Elon Musk took over.
Professional, Scientific, and Technical Services: -1.1% in August from July; -3.4% year-over-year; -8.1% (-18,200 jobs) from the peak in June 2022, down to 211,100 workers, the lowest since August 2021.
This sector accounts for about 21% of total employment in the metro. It includes legal advice and representation; accounting, bookkeeping, and payroll services; architectural, engineering, and specialized design services; computer services; consulting services; research services; advertising services; photographic services; translation and interpretation services; veterinary services; and other professional, scientific, and technical services.
The Dotcom Bubble and Bust are also apparent here. The Bust took out 28% of the jobs in Professional, Scientific, and Technical Services – the entire number of jobs that had been added during the last two years of the Bubble, plus some. But given how much broader the sector is, it recovered much faster than Information.
Financial Activities: Since the peak in 2001, employment in the sector is down by 20%, with a big trough in between.
Since the mini-peak in August 2022, employment has fallen by 6.1%. In August, employment ticked up by 0.3% from July, to 80,800 jobs.
The big financial exodus started in 1998 when NationsBank, headquartered in North Carolina, acquired BankAmerica, headquartered in San Francisco. The combined bank changed its name to Bank of America and was headquartered in North Carolina. Over the years, the activities in San Francisco were moved to North Carolina. So that was that.
Wells Fargo is still headquartered in San Francisco, but it has many employment centers around the US, and has been building a major campus in Texas to open in 2025. Rumors have been flying for years that it would move its headquarters out of San Francisco. In October 2022, the San Francisco Business Times reported that no one from the bank’s 17-member “senior leadership team” was still based at the headquarters in San Francisco. Employment at its headquarters has been shrinking for years. In June 2023, Wells Fargo sold a 13-story office tower near its headquarters building at 60% below its 2005 purchase price.
Charles Schwab, which used to be headquartered in San Francisco, and had spent years trimming its staff in the City, announced in 2019 that it would move its headquarters to a new campus in Texas, confirming years of rumors that it would leave San Francisco. And it made that move in 2021.
Then, in the spring of 2023, two regional banks failed that the tech and startup scene had relied on – Silicon Valley Bank, headquartered in Santa Clara (not part of this metro), and First Republic, headquartered in San Francisco. First Citizens bought some of the assets of SVB and assumed all customer deposits from the FDIC, and began operating the SVB branches. JPMorgan acquired some of the assets of First Republic and assumed all of the deposits and has been trying to retain its clients.
Overall private-sector nonfarm jobs: -0.3% in August from July; roughly unchanged year-over-year; -3.4% from August 2022 which had been the recent high; and -5.6% from the peak in February 2020, to 1.01 million jobs.
Government jobs — such as teachers, first responders, and employees of the federal government — are excluded here from this measure of private-sector jobs. They account for 12% of total jobs in the metro, compared to 14.7% for the US overall.
The big plunge during the pandemic occurred when jobs in Leisure & Hospitality, Retail, and other sectors subject to lockdowns suddenly vanished, even as Information spiraled into a hiring frenzy of remote workers:
Unemployment rate: The above data of nonfarm jobs is based on the Survey of Establishments by the BLS, tracking jobs by the business location the workers are assigned to, though these workers may not live in the area; they may be working remotely or commute.
But the unemployment rate is based on the Household Survey by the BLS that tracks employment and unemployment by the location of the household.
The unemployment rate in the San Francisco-Redwood City-South San Francisco metropolitan division jumped to 3.9% in July, the latest data available from the BLS, up from 3.6% in June, and back where it had been in January this year. Roughly 38,700 people who live in the metro and didn’t have a job were actively looking for a job.
This 3.9% is high for local conditions, higher than it had been in 2022 and in 2018 and 2019, when it ranged from 2% to 3%. But it is still lower than the overall US unemployment rate of 4.2%.
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1st! See how easy :)
🏆
👍 Now add something smart?
Good, useful, important article (especially because N CA is such a bellwether outlier in terms of real estate value and general financial-mindedness (because, tech).
But as a public service for those whom the article is TL DR…
“Tulsa is looking better all the time.”
There is a transformation going on tech industry. Nowadays, it is hard to get a new job if your title is “Developer” (it was easy in the pandemic infinity easing-free money frenzy). But job opportunities are more abundant if you put something like “Generative AI engineer” in your linkedin profile. That’s what most of the tech industry is looking for right now. I think it will go for a while.
In tech sector, there is always a hype of something. In late 90s it was www, in 2000s it was cloud computing, in 2010s it was mobile computing, now (2020s) it is AI. It will probably be something else in 2030s. But there always be a hype. For every frenzy, those ones who jump on the bandwagon in early days reap the most benefits. The late comers collect what is left behind.
Tech sector is long overdue for a cleansing. Too many fake resumes, too much nepotism. Add to that a clueless HR that goes off of keywords instead of what the candidate brings to the table. The cherry on top is a C-suite that couldn’t care less. The goose is being killed for all the Golden eggs…
For every “mobile computing” there are a dozen “Metaverses” – failed hypes…that are soon forgotten because they were useless/vastly oversold from the start.
But they cost a fortune.
And they are almost utterly forgotten.
(But not by the people who lost money in them. For those people, it is Casino’s “You put my ****-ing money to sleep. You go get my money, or I’ll put your ****-ing brain to sleep”)
“Generative AI” has that “vastly oversold” smell on it.
Nebulous promises of utopia without a roadmap or FAQ file.
OK! (while also picking up an easy second as Wolf doesn’t count position-wise…has unfair advantage) I’ll try, but not too good at what is smart lately.
I sure hope the tech workers (and mgrs) at JBL and related tech companies and suppliers (the company which offers this very useful option for many newer cars) don’t lose their job because some people don’t order this interior sound package with their new car…..or dealers/manufacturers don’t order/make standard cars with nothing but this “feature”, since everyone wants it* so bad.
*Engine Sound Enhancement (ESE) is standard on Touring and available on XSE as part of the JBL ® Audio upgrade. This is a combination of an Intake Sound Generator (ISG) and sport-tuned exhaust working with the Active Noise Control (ANC) system to cancel out unwanted noise in the cabin while simultaneously pumping in a deeper and sportier exhaust note.
This referred to a Toyota Avalon, I think, but I’m sure you can get it on your favorite brand, or other Toyota models. Really enhances driver experience, especially when making a clever move (requiring power) to pick up a car length on a fellow freeway race driver.
I remember the good old days when you had to do a resonator or cat delete to make your exhaust lounder… Now they just amplify it thru the car’s stereo. The future is wild.
We just offered to wash folks car, stuck garden hose up tailpipe once in a while, and rusted out muffler baffles…..had to make sure to blow it all out.
Then we were cool when whoever’s dad let us use it…..buddy’s dad’s 401 Buick was best.
You must be from the era of the “catalytic converter test pipe” at JC Whitney….kid.
The future and most people are getting stupider every second.
My first impression was good, fewer blood suckers complicating life as a business plan. IMO the trekies have run out of gee whiz, now that they are dominant corporations in the world.
They are moving to the more reliable defense budget. Like Amazon.
Then I came back to my core belief that capitalism is a normally distributed social variable. And, I suggest, America was structured as a social democracy, opposed to the concentration of wealth and power.
Congrats!
Hi wolf,
How much of these IT job losses can be attributed to off-shoring to low cost arbitrage countries.
I know what Wolf is going to say …..RTGDFA :)
Jobs in the Establishment Survey are tracked by business location, regardless of where the worker lives
👍🤣❤️
maybe some of these UNEMPLOYED can learn new skills and become part of the much needed new generation of service workers
you know actually perform real work
From what I can see, relatively few of the jobs were lost to off-shoring. Instead you have a small number of very large companies (Alphabet/Google, Microsoft, Facebook/Meta, and Amazon) that had massively over-hired and woke up to the fact that it was costing them a bundle of money.
Add in the post-acquisition layoffs (Microsoft/Activision, for example) and you have a large percentage explained.
Other factors: The self-driving car/truck mania has largely ended. There were dozens of startup companies playing in this space, and almost all of them have shut down and fired all their people. GM’s Cruise is still operating, but with half as many people as they had two years ago. Alphabet’s Waymo has had multiple layoffs.
Also ending: The blockchain / cryptocurrency / Web3 mania. Dozens of startups in this space have all expired at about the same time.
Honorable mention to the Fintech sector which has had several high-profile failures in the last year. Turns out running a bank is HARD and giving it a website in place of physical location doesn’t make it measurably easier.
The AI mania just hasn’t been big enough to make up for all of the recent bloodshed in the tech sector.
Waymos are all over the place here in San Francisco, transporting paying customers (tourists!!!) to go somewhere in an autonomous Jaguar. It’s not ending. It’s just getting started as a functional commercial business to replace Ubers and taxis driven by humans. Waymo is expanding its reach to other cities, to expressways, etc. This is just the beginning. But over the years, it will wreak havoc on driver jobs.
There are 6 million people in the USA alone who drive for a living. A lot of those do not have the ability to pick up other skill sets. That’s a huge unemployment nightmare coming.
We can see this at the seaports, like Los Angeles, where the union is stridently against automation. They’ve seen what happens when ports (like Rotterdam) automate and 95% of the workforce becomes obsolete. The fact that cargo moves quicker, cheaper, and with fewer losses doesn’t matter. It’s all about the jobs.
Rail too has this issue. There should be fewer issues automating trains than any other form of transport. Dean Ing forecast this back in the 1970’s. But it’s the union keeping this from happening.
I’m waiting for robo teachers. Everyone gets the same cirriculum, everyone is graded to the same standard, etc. Nationwide. Can you imagine the outcry?
Well, they have a good start, but the question is how long will the Mckinnsey consultant tolerate the losses.
Accordingly, GOOGL’s other bets lost about $2B the first half of the year. But they don’t break out the bets, so if you assume Waymo accounts for 10% of that loss, that’s $400M per year. Not too bad. (Probably a large underestimation)
They claim 100k rides a week across all their fleet. So if you assume it’s flat across a year (erroneous because they are expanding and growing). That’s about 5.2 M rides a year, assume $30 per ride, it would get to an impressive $156M revenue a year.
But then you realize that they must be burning at least $500M a year for CY24 to get to this point. Not exactly chump change.
The question is going to be whether the Mckinnsey consultant decides to shut them down because they are a drain on GOOGL proper. Or if he pawns the losses off on Wall Street by IPOi g Waymo.
My bet is the latter.
It will be fun to watch though, but for sure, they are miles ahead of everyone else in terms of self driving tech. Meaning they don’t have nearly as many monitors like Zoox or Cruise. How much will that matter as a viable business, time will tell. Fun to waych though.
LOL8008
Your whole thought process is BS. You’re taking per-vehicle losses as you fantasized them, because you don’t know, during the development phase when billions of dollars are spent to develop the tech with only a few hundred experimental customized Jaguars (!) running around. Then you extrapolate your fake math of per-vehicle losses to fleet-usage with 60,000 mass-produced special-built autonomous vehicles driving around when everything clicks, which is money-making time when return of and on the upfront investments come in.
Waymo can run its own fleet, or it can license this tech to automakers, Uber, and others, which is long-term money-making time on software as a service, and Waymo doesn’t have to build the hardware, the cars, or mess with the vehicles and a fleet.
It’s the same BS people say about EVs when a company loses $100,000 per vehicle during the early production runs. Tesla did that too, and when it started mass-producing EVs, suddenly it had large per-vehicle profits and large net profits.
That’s how big long-term investments works. And everyone knows that. Even McKinsey’s consultants know that — in fact, they teach it. You just don’t know it.
I saw two Cruise vehicles in Dallas (for the first time) this past weekend. Both had humans in the driver’s seat and the front passenger seat. They looked like they were performing tests.
Tesla had almost no competition and ZIRP for a decade. According to Musk, they almost went bankrupt 3 times. All these new EV companies have a lot of competition and high interest rates. Not the same situation. Anyone who wanted an EV prior to 2020 had a choice of Tesla models. Now you have a dozen companies making EV’s
Out of a dozen or so companies that were trying to field self-driving vehicles on the public roads, Waymo is the ONLY one currently operating. Cruise *may* return….someday. The rest have largely run out of money before they could create a viable system.
The bigger question will be if Waymo’s approach is capable of scaling to the rest of the country/world. Waymo has spent a massive amount of money creating detailed maps of the San Francisco area, and then testing vehicle behavior when running those maps. If they have to replicate that effort in every new location, it’s only likely to be financially viable in the largest metropolitan areas.
So far, Waymo has raised (and presumably spent) $5.5B, with Alphabet having announced another $5B in funding. For FIVE BILLION DOLLARS and 15 years of testing, we have self-driving cars in San Francisco (with testing also conducted in Austin TX, Phoenix AZ, Kirkland WA and some locations in Michigan).
And Waymo apparently gave up on self-driving commercial trucks in 2023.
In general, the priority is to move people/things from Point A to Point B as cheaply as possible. I don’t see how Waymo’s $100K+ self-driving cars (plus the mapping costs) is going to offer a cheaper solution than a human driver in the foreseeable future. My local taxi company runs a motley assortment of cars that they bought used for less than $20K each. That leaves at least $80K to pay the human drivers during the operational lifespan of that car.
At that, I’m giving Waymo credit for a LOT of cost-reduction. Best data I have is that their current fleet cost north of $300K for each vehicle.
Cruise was run by a bunch of startup cowboys shooting from the hip and disregarding risks. Cruise is a startup company that GM bought lock, stock, and barrel, and they kept their startup culture, damn the torpedoes, and just run over whatever local resistance there was, and they lost. Cruise has a pretty good system, from what I saw, but it wasn’t ready for large-scale prime time, but that’s what the startup cowboys had hyped, and when it got into trouble, they and GM lied and obfuscated and fought local officials that had to deal with the mess. So now GM cleaned house, put adults in charge, and they’re now trying to get the issues worked out, and presumably work with local officials to do that.
Waymo has always been run by adults that understand the risks in this business and work to mitigate them. That’s the big difference.
In terms of costs, Waymo is using high-end EVs (Jaguar SUVs here) that have been retrofitted with autonomous tech. These are small-scale manual-labor conversions. Once the tech advances enough, some automakers will mass-produce vehicles that were designed from a blank sheet to be autonomous. And that type of vehicle will be a lot cheaper than a high-end SUV manually retrofitted for robotaxi service. So all the cost figures are useless at this point because you’re looking at experimental vehicles, not mass-produced robotaxis. That was my point in the prior comment.
There are several big companies in China that are fairly advanced with their autonomous tech. Some big automakers in Europe have made big advances as well.
It’s difficult to accurately predict the ultimate cost of a self-driving car in volume production. A decade ago, the Waymo’s LIDAR sensors were $20K each. Last I heard, that was down to less than $5K. I think a reasonable prediction would be between $75K and $100K. That assumes significant cost reductions from volume production of both sensors and the computer modules connected to those sensors while also considering the current production cost of human-operated cars.
Based on the descriptions I have read about Waymo’s technology, it is heavily dependent on having the area of operation covered with highly detailed maps. Compiling and maintaining those maps is an expensive process that doesn’t get significantly cheaper with scale. I expect that the cost of mapping a city will remain roughly the same for City #2 and City #10.
There are additional technology flaws that need to be addressed. LIDAR is a great sensor, but doesn’t deal well with precipitation, either liquid or frozen. In 2017, when I was in Mountain View, I noted that Waymo’s test fleet disappeared any time it started raining. Last I’ve heard, the current tech cannot operate when it’s snowing. Both LIDAR and camera-based tech cannot “see” well enough.
This tends to rule out operations in Chicago, NYC, Boston, Washington DC, Seattle, Denver, Philadelphia, Pittsburgh, and many more.
At the moment, Alphabet has announced that they’re willing to spend another $5B to further develop this technology. My prediction is that the current tech will not be widely deployed in the next 10 years, with the exception of pilot programs in warmer parts of the country (Phoenix and San Francisco at the moment).
Keep in mind that the current tech is based on learning systems (Neural networks) that require expensive and complex training. They aren’t “intelligent”, but rather have hugely complex rulesets that allow them to respond to a situation they’ve seen before. Throw something new at them, and they’re completely helpless. The current systems still struggle (and outright fail) with construction zones and accident scenes.
I don’t expect the widespread deployment of self-driving cars until we achieve AGI (Artificial General Intelligence), which pundits have been describing as “only a few years away” for the last 20+ years. The most recent example of this is Sam Altman of OpenAI claiming that he will have AGI “within a few thousand days”.
I don’t expect AGI in this century. Speaking as a professional computer programmer, we are several orders of magnitude away from having the processing speed and memory capacity needed to pull it off. We also need a better understanding of how the human brain does it before we can program a computer to do the same.
Also ending metaverse.
For all these manias, I gave 👎 from their start.
AI seems real, at least in the long run. Over a yeah ago I exited corporate software development. I enjoyed actual coding, and AI killing the fun there.
5 years ago the new kiosk bots started replacing low income workers who were not showing up and hard to find because of the low pay
predicted 40-60% of those jobs were going to vanish in 10 years
tic tock 1/2 done with other half coming
guess their going to need more people to clean up the streets with new druggies coming out to play
It will mean a world of sensors recording each and every second of our lives. All safely recorded in a fail safe data center.
Does that concept bother anyone else or is it just me.
OK, last comment to biker maybe too opinionated and therefore rejected?
How about nice hat in hands question to one of my betters in computerland?
Biker, you think EUV-EUVL is ever going to amount to anything?
AI is definitely hyped, but also definitely real. It’s a nascent technology so no one really knows how it’s going to change the world, but it’s going to change the world in the way the steam engine and printing press changed the world.
Paul,
Here’s one way that applied AI is helping farmers and their land.
From 19 September 2024:
“Milestone Seen With Deere’s Targeted Herbicide Application”
“John Deere introduced its See & Spray technology in 2021. This system uses artificial intelligence and machine-based learning for targeted herbicide applications. Cameras scan over 2,100 square feet of crop per second (as the farmer drives the tractor and spray-rig machine). When weeds are recognized, the nozzles deliver a specific dose to where it is needed.”
Product Marketing Manager Josh Ladd says an important milestone has been realized. “This year, we saw nearly 8.3 million gallons of herbicide mix saved. If we take an average of 15 gallons an acre versus broadcast application, that’s equivalent to twelve and a half Olympic-sized swimming pools.”
Using this technology gives an average of 59% less herbicide sprayed per acre. This saves money and helps land stewardship and sustainability.
Yup, John Deere and Artificial Intelligence working together makes for better farming.
Re; EUVL unanswered question,
ASML article coming up soon here? High flier stock right now, I think.
National Ignition Labs washed their hands of it in ’99…(or it’s super gov’t top secret now…..never know……someday a part of all this quantum mechanical BS might work.)
Yes I know about NMR (played with table top one in mid 70s) and MRI…just don’t buy “spin” and associate Pauli shit.
Dammit, that is my first real good stock trader AI tip……and what this site is partially about…..investing and making MONEY (the sinister way Wolf says it)…..and not one person admits to making a “killing” off it’s huge AI money making “potential”……have to know when to get out, though, like with other members of Wolf’s hall of shame….sorry I forgot term for list….ignore my non-economic trained opinion and pick up some hard earned cash!
Or this chip fab technique may WORK….huge breakthrough….never know…….ground floor stuff.
Dan’s drench a food crop with Roundup (or whatever) PROPERLY AI farming technique does, according to him.
Ok………..here’s the picture spoken in REAL investment PRO talk…with a few of my ignorant comments……It has been well over 1000 (S&P units?) and is somewhere in the 800’s now, I think…it’s hard for me to give a shit about this stupid stuff, even the newest BS science, but if it all is heading for a complete or partial “business and science” hustle, I DO like the way Wolf describes the aftermath, and who gets fucked….moneywise…..if I can tell who…..pretty complex stuff.
ASML Holding (ASML), the world leader in semiconductor manufacturing machines, has an equity valuation that looks sustainable despite a high P/E ratio, in my opinion. Considering that management is expecting approximately 45% revenue growth in 2025 (it is obvious to even me that is a good thing), ASML stock is likely to be a prosperous near-term investment. Longer term, ASML also has an unchallenged moat in facilitating the production of the most advanced semiconductors on the planet. Therefore, I am bullish on ASML right now. (IE, it “owns”, somehow, this EUVL tech…I think)
2025 Expansion Following a 2024 Contraction
ASML viewed 2024 as a transition year, and it focused on investments in capacity expansion and technological advancements to prepare for a demand increase in 2025. Management has ramped up the output capacity of its extreme ultraviolet (EUV) systems. This investment is critical in order to meet the current demand for advanced semiconductors driven by AI.
This was on Yahoo…so finding “analyst(s)” and creds should be easy for the pros here.
But they might pull it off which makes me a luddite fool.
NBay,
No. You got my comment wrong.
The problem is that nearly all food crops are polluted by spraying them with herbicide, pesticide and yes, before harvest, crops like canola are “desiccated” with Roundup. That is not good.
More efficient spraying is at least a positive. And spraying the weeds precisely where they are to kill them; while leaving the crops untouched is a step in the right direction. That’s what I commented on.
Here’s a recent news report from 17 September that highlights the problem:
“Heavy rains in the Devils Lake, North Dakota area brought the harvest to a grinding halt last week.”
“We have canola that’s been sprayed, so now it’s going to get critical to get on those fields,” said Jason Hanson.
Let me translate this for you NBay. The canola crop was just about finished. To make it easier for Mr. Hanson to combine, he sprayed his field with glyphosate. This kills the plant and dries it out. The stems are then cut more easily this way and it thrashes more efficiently too. But it puts poison in the canola and the canola oil at the grocery store! And to make matters worse for this farmer now, his dead canola plants had rain and hail dropped on them before he could harvest them.
Right now, in this part of North Dakota, combine service centers are seeing a lot of broken machines coming in. When the cutter bar is at ground level, rocks get inside and jam things up.
NBay, please, you gotta step back and look at the big picture.
Yeah, I know, Dan. All the good things you and other Libertarians do are very misunderstood.
Let’s just say I cannot possibly grasp the “big picture” and leave it at that…………PLEASE?
I obviously lack your connections or scientific knowledge…..simply out of my league.
And Lord know I tried…..I read “big picture” giants like Herbert Spencer, Milton Friedman, and was even WITH (as in person) some of those who understand big pictures and actually RUN this country BECAUSE they do…supposedly. But somehow this “Big Picture” has eluded me.
I even watched the show “The Big Picture” on TV weekend afternoons WITH aforementioned actual USA leaders and listened to their comments on it on Holidays along with football games.
Maybe some people DO improve things for free? It IS possible, although I’m sure you wold consider it completely impossible or maybe just insanity.
Just had to add that. Think you are probably ok guy, so just explain your toys to me, not how you got them.
Much easier “picture”.
Agree CE.
But all that sensor tech and the situational algorithms and control algorithms produced a LOT of tech and technicians (and engineers) for the drone (all sizes shapes) business…..which is not becoming a good thing IMHO…..and from what I hear.
They can always code, right?
I work in this industry for one of the Big 50.
Positions are not eliminated but geo shifted to low cost location.
Where can we find a list of the Big 50?
Everything. AI is just the scape goat word for these companies. All the companies in the Bay area I want to pay salaries in Indian rupees but collect their cloud subscription amount in US dollars. Unless we see start to see cancellations in services like Netflix or Amazon prime this will go on.
Tech biz need to show cash flow. that didnt exist with free money
I agree that the tech biz is like a cornered gladiator, dependent on cash flow.
The day they agreed on their course of action was the day that the google meme ” do no XXXX” can’t remember exactly.
Bad things tend to happen when desperate greed is the motivation,
Now if more companies find it advantageous to depart the area, or lay off employees, could be the high taxes, cost of living….nothing new, just more people leaving California to be replaced by hard working migrants. No complaints, it’s a good day to not live in California…to expensive for me anyways. I live like a cheap dog in small-town Arizona, funny thing is I think I’ve got it good.
” just more people leaving California to be replaced by hard working migrants.”
LOL, as “Aman” above said at 3:26 pm
“I know what Wolf is going to say …..RTGDFA :)
“Jobs in the Establishment Survey are tracked by business location, regardless of where the worker lives”
I’m not as guilty as might be, I was actually looking only at California’s population decline not at the RTGDMFA crime.
Still a fine dispensary across the border.
So you went without any cabin sound options on your car?
Your poverty sucks pretty bad, I suppose.
Well, I’m living it up in North CA weatherwise and firewise and quakewise…….so far.
On social security and in low income apts……max 50% of median income…..about $70K now…inflation.
Hear we are making a lot more housing….sure hope so, lotta poor bastards on the streets.
Wonder how many of these are losses related to retirement or buyouts with positions not being added back in? This sector is younger than IT people that work in other sectors but I am sure still those exiting for retirement or simply a new chapter in life.
around 10,000 per day are retiring/turning 65 or 3.65 million per year
taking countless skills and experience
not seeing lots of youngins filling their jobs
I’m contemplating though I’m couple years out for that magic age
don’t care much anymore
but have so much work, with customers throwing more at me knowing my time is short
they routinely ask if I have transition plan for them – likely going to sell my company and walk
What’s business are you in?
I read this in my ceos voice lol
Now you see that the red lights of crises were serious and the dooms day is coming or do you still believe that those lights that have been flashing for so long will never turn into a real crash?
Not sure this foretells anything other than California is a difficult place to headquarter a business.
Doesn’t bode well for revenue for the state for sure. Next few budget cycles will be interesting. Perhaps good revenues will recent uptick in market since capital gains an important source of revenue. Not that it is the lions share but super volatile and can vary from around 2% to 14%. $155 billion swing between adjacent years. Difficult when you pass laws and programs based on unpredictable revenue.
“We are moving the rest of our operations out of California as of early October (2024). We will be 100% in Texas. We’ve been about 50% in Texas since 2020, where we bought a facility in Corpus Christi.”
“Now we’ve bought a building in San Antonio where we’re moving the rest of Valencia’s (California) operations to.”
“But we are moving. And we’re closing down California operations. It’s just become, well, a lot more difficult to do business here (in California).”
Jason Stoddard, Schiit Audio’s design engineer and co-founder, said this three weeks ago. He is a Californian to the core & Schiit Audio was started in California in 2010.
Many of Schiit’s suppliers are in California, and that will stay as is. One business detail for this transition is to have a full semi-trailer with each load of product(s) to transport from California to Texas. Gotta keep shipping costs down for chassis and circuit boards from their suppliers.
Ever been to Corpus Christi? Methinks they will have trouble retaining many California employees.
Their California employees were given an eight month notice. Those who will move will get a nice allowance for their expenses. Those who choose not to move will get a good severance package.
My family wheat seed genetics business had operations in San Antonio with our field work mostly in Castroville. But that was from November to the end of April. I liked Texas in the winter.
Will they get a nice pay cut too for moving to Texas?
Anyone running a business that is not tech or highly dependent on highly educated employees or local agriculture is crazy to locate a business in CA, which is why those businesses are all leaving. But for top tech and biotechnology talent, there is no better place in the world. If the stupid state government doesn’t kill the Golden goose.
“Now we’ll probably hear some people complaining about how we’re evil people for moving out of California and forsaking our employees, and stuff like that. Here’s the thing, every California employee was offered to keep their job, and to move at the same salary, and to have, actually, assistance in moving if they came to Texas. If they wanted to.”
“We understand why people don’t. I mean, if your family is here, you’re not gonna move. But they had that chance. They also had eight months warning. They also have a very, very generous severance package for the ones who are staying here.”
Jason Stoddard’s remarks about the move; made three weeks ago.
Not a pay cut, Wolf….piecework…..a chance to make, maybe, even MORE than the boss!
On meth and all the 24hr shifts one’s body can take, anyway…… before hitting ER.
Here come the cold solder joints with intermittent opens……..Had a job where piecework electronic machines came from Arlington TX…..have much unpleasant experience fixing said (high revenue, though) products.
Don’t know if other biz mentioned is developing wheat that can be drenched in Round-up (like corn seed) and never weeded, or just have well connected middleman favors/friends/family spot.
Had a shot at one of those spots….even college would be paid for as part of the deal. Wasn’t forward looking enough, I guess, wanted to finish all my kid stuff while I could…..and did.
Think I high mean profit….am very econ challenged.
NBay,
In 1983, a fungal pathogen, Fusarium oxysporum — or scab — took hold on most of the hard red spring wheat varieties that were popular in Minnesota and the Dakotas. This devastated the wheat market and farmers for a few years before new and more resistant varieties came to market. Wheat breeding was then, as old-school as it gets.
In south Texas, almost no spring wheat was grown. It was winter wheat. Winter wheat typically has 12% protein and does not yield as much as spring wheat with its 14% protein. Hard red spring wheat is the best for making bread, and it has the highest price as far as wheat commodities go.
Scab did not exist for all practical purposes in south Texas. Susceptible HRSW from up north did not get hit by scab there. My dad figured this out, but no one else did. We took a large number of now “extinct” varieties from up north and tested them in Texas. Two from the U of MN were fantastic. So we made selections of the best heads on the best plants of these two and ramped up production as fast as possible getting two generations a year. Texas’ spring wheat goes in in December & harvest is right at planting time in Minnesota.
A business contract was made with the U of MN to split royalties on seed sold out of our San Antonio seed producer and sales partner. Ownership of the varieties was held by the U of MN, but we had “refined” those varieties by our selection process, so it was natural to enter into a partnership with the University. The U of MN got a nice, and unexpected, income for their wheat breeding department as a result. Farmers had a far better type of wheat to plant that could go in a few weeks later than winter wheat and gave them the highest yield they could produce. The elevators got a better end product brought into them by the farmers at harvest. Everybody made money.
As a bonus, Castroville has a deep Alsation heritage. You could start the day with a fresh croissant and a strong cup of coffee there. As I said, I liked Texas in the winter.
I lack “big picture”….see above.
Yes, California is insufferable, as one of the worlds largest economies there is friction.
It seems. I grew up in a small town in the Rockies so I am not qualified to comment on the state of the state. Although, I was appalled by the California state tax return. It’s either genius or idiocy.
RE; CA Large Economy
Hell, even the kids were entrepreneurs here in CA. We invented first skateboards……a short 2×4, 2×6 with sister’s adjustable steel skates split and nailed on so they would tilt a bit.. Worked best on very smooth sidewalks, MUCH better on handball courts. (empty pools came a bit later and were hard to find, anyway)
Think its that much despised “coastal elite attitude” that does it.
Like on school bus, if someone said,” look at ALL the whales”, they were largely ignored, even by kids too young to be interested in staring at opposite sex…..or whoever they preferred. (had to be very careful with same sex interests back then, though…..wind up in social hell.
(and REAL hell too, or so I hear)
Feels like the whole tech worker binge after the pandemic is like a bunch of billionaire’s company DxxK measuring contest….look at me, look at how many workers I can horde compare to your company..blah blah…
Now that the experiment is effectively over, as always, others get to hold the bags while the people in charge walked away just fine and in fact cashed in on their own stock at the top…good times.
truer words rarely spoken
Indeed, and I think the AI unicorn is another excuse to layoff employees due to weakening business while propping up their stock price. Like the old 80s commercial “where’s the beef (product)?” Biotech has been shedding jobs like a bad vaccine for years now, lol.
Was just reading about how San Diego is cooked too. Was once a great city and now it’s an overpriced parking lot.
Can confirm.
Live in San Diego and people want SF prices for housing out in the Southwest dirt. Traffic everywhere and generally not worth the price. Home prices blew up with remote tech workers chasing cheaper housing than SF.
Agreed…paying coastal California home prices (and CA income tax!) for inland California (AKA Western Arizona) living…is just…nuts.
30-40 miles east of the Pacific and you might as well live anywhere in the next 800-1000 miles east – weather equivalent, infinitely less chance of earthquakes, real estate 30% the cost, and no California level income taxes.
“California Dreaming” has always really been about a rather slender slice of the real California…in every sense.
I left SD in 06, the OG bubble in the late 90s ruined it for me, prior to that prices were reasonable and traffic was mild. All the used clothing and record stores got replaced by art galleries and day spas. I’d be out surfing and look over my shoulder back at so called civilization and realized the ugly was only increasing.
Live in SD
Can’t wait to get out but stuck here for some time
Tech workers from sfo are being called out
Have a friend who worked remotely and now commute 3 plus hours as companies are now calling back to office
Agreed. Been in San Diego for 25 years and it ain’t what it used to be, including the increasingly humid and cloudy weather. Currently planning our escape from this overtaxed and now sadly overrated state.
So, the foothills, gold country, Tahoe, Pacific Crest Trail, Eagle Lake, Modoc, Kern River and everything in between are dumps, eh? Plus the entire 395 side of Sierras? Even Death Valley is cool…..so to speak.
You have NOT been around this beautiful state…..and weather all same as, say, Casa Grande, too? And your 30-40 mi “Slice” goes right TO the damn ocean at low tide in some places much south of Santa Barbara
Been here appx 70 years and still haven’t seen all the beautiful places tourists flock to. that are NOT national or State Parks.
Can I please say VERY STUPID COMMENT, especially since I had thought you lived here?
(I’ll buy just a drunk……or senile like me.)
Hooli and pied Piper shedding the dead weight
Yes, there’s some of that. A lot of it. The Hiring Frenzy into mid-2022 was a terrible waste.
haha love that show…although as ridiculous as some of the characters are in that show, sadly IRL billionaire tech bros like Musk is making that show tame by comparison
Mike Judge stuff is worth a watch
“This country was founded on the principle that one corporation couldn’t hog all the slaves, leaving the others [corporations} to wallow in poverty”.
-Eric Cartman
“In October 2022, the San Francisco Business Times reported that no one from the bank’s 17-member “senior leadership team” was still based at the headquarters in San Francisco. Employment at its headquarters has been shrinking for years.”
This is good news. They are all over the DC area. I’d like to see their senior leadership team shrink to ZERO. Since they took over Wychovia in 2009 during the financial crisis they’ve destroyed any and all relationship with the legacy depositors and customers that they inherited. I am one of them. Wychovia was a well run bank, unlike Wells Fargo which can not manage its way out of a wet paper bag. After 2 years I am finally close to liquidating all my personal financial relationships with them except for a small business account. That account will be kept open because it will cost me too much to close it out than keep it for now. I’m getting rid of my VISA card with them as soon as I can verify that all pending charges have been cleared out.
Safe to say, though, the G is inclined for bank numbers to shrink much closer to the Untouchable 4 than the 4000-some of today (or the 15,000! of 1990).
The real giveaway is the near absence of de novo (new) banks authorized over the past 15 years.
And the fact that breaking up the Elephantine 4 is nowhere on the radar screen despite…
– Wells having more than a few massive customer scandals,
– Citi upholding its tradition of intl cock-ups,
– BoA mostly OK but ever bigger and more complicated, and
– JPM continuing its historical role as the Fed’s understudy and badminton partner.
“the near absence of de novo (new) banks authorized over the past 15 years.”
New banks are still getting approved, including 10 in 2024 so far. But banks vanish a lot faster by getting acquired by other banks or credit unions (credit unions acquiring local banks is a hot thing now because credit unions don’t pay income taxes).
The FDIC has a list of bank approvals:
https://www.fdic.gov/bank-examinations/decisions-bank-applications-deposit-insurance
Don’t forget all the secret accounts their employees opened in your name to goose their new-account stats.
Absolute crooks.
Let’s assume what you say is accurate then how has this FDIC bank continued to operate.
Don’t exaggerate so obviously.
The granddaddy of Tech employers ( as far as strategic importance Intel, is in the middle of layoffs, as has been reported. Right now they are encouraging as many as possible to take severance packages voluntarily. I don’t believe these “retirements” show up on job loss numbers. Next month they start the involuntary layoffs.
RTGDFA. This gets exhausting. This is the third one. These figures are reported by businesses – how many workers are assigned to this business location. It counts the workers on the payroll at that location. If they’re not on the payroll, it doesn’t matter why they’re no longer on the payroll, they’re no longer counted, good grief!!!
Raise money. Spend it in a grand manner. Repeat till Hindenburg Research takes short position. AI will solve all problems by reformatting text on the internet and turning it into pleasantly voiced speech. Secrete algorithm turns pontification into intelligence. Spell and speak instead of speak and spell.
Gen X (1965/1980) workers are protected from age discriminations.
HR layoff packages are good to go. They mix it up : a few gen X with young workers to protect themselves from lawsuits. The cost of gen X packages is much higher than young employees, who might be sacked for no fault of their own. Senior gen X will start retiring soon. Millenials and gen alpha will take over. Gen alpha is 30M smaller than the boomers.
When I worked as a software developer, I ALWAYS volunteered for the severance package. I always had a job lined up and I was ready to take the money and run. They never took me up on my offer, instead laying off some poor schmuck who really depended on the job.
Welcome to capitalism. As a miner, unemployment is a constant fear that plagues everyone,
Beats the gilded age…..you’d be worrying about getting shot….by private OR government goons…..or both together……
I worked in the bay area for Biotech for a decade, left in February of 2001. The Biotech company is sill there, and still profitable, but happy I left when I did. I can see the value in biotech, but not social media. As far as I can tell they are all over educated flim-flam men and women.
That “in silico” stuff that passes for more accurate chemistry, physiology, or biology now? Or worse yet seeing what we can’t see……ie, cartoons?
Have any of your cartoons been accepted and filed at a big data bank?
Any problems with photograph 51?
Jobs in Information, Thousands
Building the Tower of Babel has been hard work, but thank God ai is here to push us to the next level of Incoherence, instability, irrationality and insanity
With that description I’m surprised politicians haven’t outlawed it as it will take their jobs, lol!
Not too mention the cardinal sin of hubris whose normal demeanor matches the “next level of Incoherence, instability, irrationality and insanity”
Love be with you all.
Yeah….very much “hard work”……..good analogy……wonder how many more stories are built before alien father takes learning toy (like our ant farms) we are all part of away from his rotten kid for the super alien race equivalent of pulling wings off flies?
How’s that for a cosmology?
Great data Wolf! Thanks!
Tech, IT, social media – nice things, it’s the progress. But I refuse to be forced to use apps on my phone for things that I can do with my browser! I don’t need apps for facebook, my bank account, email, I can use my browser as I always did! FB forced me to install messenger for viewing messages – great. Anyway, my point is – there is a lot of useless people, creating non needed apps, let them go, save money, bye!
If more people agreed with your preference for browser access rather than individual apps, Blackberry might still be alive — but most don’t.
What’s an app? Some menu icon or trick I don’t understand?
I have hear the phrase “killer app” and I think it means good or money…… which is same thing to most people……right?
Agree the whole AI etc., overhyped but not sure Twit is a good poster- child example, because it’s such an odd story.
Whatever its financials were before it was hit by lightning, after the Boy Wonder grossly overpaid by shelling out 42 billion for it, it had to either: 1: continue as a billionaire’s play toy. Or 2: hugely increase revenue and/ or 3: hugely cut staff.
AOL is a better example of the truly freak Dot. Com era, epitomized by its purchase with its stock alone of Time Warner. The speed of the collapse was such that not much more than a year later, the AOL share of the new biz was written down to nothing and then the word ‘AOL’ disappeared from the company name. The mother of all Hail Mary bailouts for shareholders of AOL.
The freak in the Twit story is not so much the AI lunacy as it is the guy.
X man is a very extreme outlier. But if X can survive with half it’s employees, so can several other large bloated mag 7 types.
still far too many managers doing who knows what
Hi Wolf. Is the trend worrying from the perspective of potential reduction in consumption and increasing employment?
Thanks
1. This is a local issue with not a lot of national implications.
2. I do expect this to lead to continued declines in home prices in the area.
3. Other cities, such as Austin, with similar scenarios are having similar outcomes, along with sharply declining home prices.
4. For now, these companies are just working off the effects of the crazy hiring frenzy.
5. If they just got rid of deadwood and remote workers that didn’t produce much, it will eventually improve productivity, which will lead to long-term growth.
6. The deadwood and remote workers that didn’t produce much then have to go find jobs where they have to produce, and that would be good for the economy as well.
7. So far, even locally, there hasn’t been any negative economic impact, from what I can tell, maybe for those reasons I stated above. Home prices are coming down, but that’s a positive for the economy, not a negative.
8. To me, this is just a necessary clean-up from the hiring excesses and the remote-working shenanigans that played out during the pandemic in that sector.
9. Remote working is functional, but it doesn’t function for everyone (it works for the self-motivated), and companies have to be able to control it. And now they’re regaining control.
They are *asserting* control. But in my opinion, they are not regaining control.
I work in tech and RTO policies are widely ignored. The office is mostly empty. People badge in for an hour, or on weekends, or at night, to avoid getting in trouble with HR. Middle management has no interest in stirring the pot by ramping up enforcement, and they know that if one of their employees gets fired for noncompliance, they will NOT be backfilled with a replacement. So no incentive to punish. Meanwhile the center of action is elsewhere and the execs mostly work from home (or don’t work at all).
– With the job losses real estate prices will come down as well. Both in e.g. San Francisco (where the businesses were located) and in the surrounding counties (where the employees live).
I realize that this data set is specific to the San Francisco area, but I wonder if it’s indicative of whatever it is that the Fed is seeing which is driving its current rate cutting cycle?
I despise Musk as much (or more than) the next guy, but that he was able to fire 80% of Twitter and it is still about as functional and bug-free as it was before the mass layoffs is pretty indicative of IT employee bloat.
I worked during the original dotcom boom around SF; it was a different world in the late 90s but even then there were far too many managers making decisions about things they didn’t understand, causing delays and increased costs. After 2000 I mainly worked in the UK public sector and it was just as bad.
On Youtube there are frequent videos about IT people (and others) recently fired and saying how hard it is to get a new position. Thank god I’m now out of that job market!
I don’t hate Musk but fully agree about the bloated staffing levels. I remember hearing during the pandemic that job-hopping was rampant in the tech industry. The “bloat” staffing levels may have been a bench strength strategy – if she quits, we’ll keep him on the staff (for now) to take over.
Job hopping is yet another game of musical chairs. Great fun until you are the one left standing.
1) A huge number of that 80% cut were simple content moderators. Twitter’s ad revenue has dropped >50%, in large part because advertisers don’t want to be advertising on unmoderated content. Losing over half your revenue doesn’t count as “about as functional”, imo.
2) many employees were working on “future initiatives” that Elon has cancelled, e.g., more robust API integration. The effects of such programs are uncertain and take years to appear- you only see the problems with 5-10 years of hindsight when a platform is either dominant or abandoned, and people say “I gave up on Twitter because they cut off access to the cool widget i maintained as a hobby”
3) Twitter has had several famous outages & technical failures since Musks’ takeover, directly related to the lack of infrastructure staffing which otherwise would monitor and deal with technical issues at scale.
4) Musk has promised that twitter will serve users “entire financial life” by the end of 2024. Possibly he can still deliver in the next 2 months, but if he doesn’t, we can point directly at the lack of staffing for failure to R&D his desired features. (p.s. i was on a team that built a bank platform in <1 year, so I know it's both possible w/ a dedicated, medium-sized team, and think it's impossible with how Elon appears to be managing things)
In general, my firsthand experience agrees that most california tech companies have a some bloat & friction, which wastes a huge amount of payroll. But your observation is akin to saying "The bus driver tied his belt to the steering wheel before jumping out the door, and the bus is still rolling forward in a straight line after half a mile. This is pretty indicative that bus drivers are unnecessary"
‘The New York Times recently reported that X made only $114 million in revenue in the U.S. during the second quarter of 2024, according to the documents they obtained. This is a massive drop compared to $661 million in the same quarter in 2022 before Musk took over.’ Aug 23, 2024
So if those laid off were making less than a total of
2 billion a year, the second quarter revenue loss X 4, the company was better off with them.
@Pavel – I have been working in IT for over 30 years starting out as an engineer working in the oil and gas industry (Exxon-Mobil). I took the severance package when downsizing occurred in early 1990’s and focused on data management and Oracle in the IT space. I have worked steadily either as a employee/contractor or employee.
If you have “data” in your job title (data analyst, data modeler, data architect, data engineer, etc.) you will find a position. I get emails and phone calls from recruiters wanting to know if I am on the market looking for a position. Almost all of my peers in my network (data folks) are still working and we are “Boomers”. My current position is enterprise data architect; it’s remote position (I live in the Denver Area) working for a healthcare firm based in New York.
I will probably work for another 2 to 3 years and then consider “retiring”. LOL
The only good tech bros work at NVDA
Jensen will replace lazy coders with AI that never sleeps!!!
Who cares about these humans with no job
My portfolio aint no snob!
Another pointless article.
– Mag 7 and its shareholders
Meanwhile, in the opposite side of Earth, youth unemployment is a harbinger of future growth headwinds, especially in tents of Okun’s Law and future GDP there.
Some clever dudes think China has a balance sheet recession, which will take tons of time to dig out of. Their recent stimulus is somewhat like the ineffective Yen intervention, which is a slow motion govt effort that generally fails fast.
China weakness dovetails nicely with our post-election recession:
“In August, the reformulated (China) youth jobless rate hit a new high for the second month in a row of 18.8%.”
Working for a top 10 healthcare organization, we have sent another 10% of our US based service position (HR, IT, UX/UI) off shore. This is phase 1 out of 4 anticipated phases to make up for losing a big client. It’s a nerve wrecking time at work.
May we all avoid buying something stupid tomorrow.
With the disaster unfolding in Carolina, and the feds & worthless Govenor
late to the game, thank god for private citizens & star link to at least help in communications. It is events like this, that show if you have leaders.