California Leads the Nation in Job Losses
California Leads the Nation in Job Losses

By Bill Pan

California currently leads the nation in job losses, with a recent wave of layoffs particularly hitting the tech sector hard, according to the latest federal government data.

According to the Federal Reserve of Economic Data (FRED), some 482,700 residents of California lost their jobs since the beginning of this year, positioning the Golden State as the biggest job loser in the country. It was followed by Texas with 274,900 job cuts, then New York with 220,600, Illinois with 155,700, and Florida with 141,900.

Overall, the first quarter of 2023 has seen 931,700 Californians left jobless—a 20 percent surge from the same period in the previous year.

When it comes to unemployment rates, the FRED report shows a steady rise in the share of jobless workers in California’s workforce since August 2022, peaking at a staggering 5.3 percent in February, up from 5.2 percent in January and 4.5 percent a year earlier.

California’s jobless rate currently held steady at 5.3 percent, following reports that 4 out of the state’s 11 job sectors lost jobs in March, according to the state Employment Development Department. The largest decrease was in construction, with 5,300 jobs lost in the aftermath of a series of severe storms. The job loss numbers would have been much worse if not for strong growth in the private education and health service sector, which was primarily driven by an increase in social assistance jobs, such as in-home support service workers.

The national unemployment rate in April was 3.9 percent, a slight increase from 3.8 percent in March. The U.S. economy added 303,000 jobs in March and 175,000 in April, a welcome news for the Fed as it seeks to cool down labor markets.

California Bleeds Tech Jobs

From March 2023 to March 2024, California’s tech sector suffered a net loss of 53,600 jobs, surpassing any other job sector’s losses over the same one-year period. This trend of workforce reduction shows no signs of slowing down, with major tech companies such as Tesla and Google announcing plans for further layoffs.

The latest round of mass tech job layoffs was announced at Tesla in April, affecting 6,020 employees in Texas and California in response to faltered demands for its electric vehicles in an increasingly competitive market. There may be more cuts on the horizon, as Tesla CEO Elon Musk has indicated that the company could be laying off at least 10 percent of its global workforce to reduce costs, affecting approximately 14,000 employees based on its total 2023 head count.

Apple in April also let go of 614 employees in California after abandoning its electric car project, according to a WARN notice filed with the state.

In January, eBay CEO Jamie Iannone told employees in a memo that he wanted to reduce the San Jose-based company’s current workforce by approximately 1,000 roles, an estimated 9 percent of full-time employees, so that the company could be “more nimble.” This round of cuts followed the reduction of 500 positions in February 2023.

Google has also implemented a slew of job cuts this year, eliminating hundreds of positions across various divisions in the Bay Area, including the team that manages Pixel, Nest, and Fitbit hardware.

The slowdown in the job market has affected the state’s budget, which now faces a multibillion-dollar deficit for the second consecutive year. Gov. Gavin Newsom’s administration officially reported the deficit was $27.6 billion, although the nonpartisan Legislative Analyst’s Office estimated a much greater number of $58 billion.

With the deficit so large, the Democrat governor has proposed to curtail spending by more than $30 billion on illegal immigrants, education, and climate-related efforts that have been among his priorities.

“These are propositions that I’ve long advanced, many of them. These are things that I’ve supported,” Mr. Newsom said during a May 10 press conference in Sacramento. “But you’ve got to do it. We have to be responsible. We have to be accountable. We have to balance the budget.”

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