Tech boom has slowed, but there are still more Silicon Valley jobs than before the pandemic

Silicon Valley continues to deal with the aftermath of the COVID-19 pandemic: A tech boom of hiring and investment has now slowed, and an exodus from the region has now reversed.

Last year, the valley’s 20 biggest tech companies laid off 7% of their workforces, or about 18,800 employees, in the Bay Area, but the region actually had a net gain in jobs, according to a new report. The valley — defined as Santa Clara and San Mateo counties — added 2,700 jobs from June 2022 to June 2023, the Silicon Valley Index shows. Last year’s layoffs still leave those companies with 37,000 more tech jobs in the area than at the end of 2019, before the pandemic. 

“We’re not booming, but we’re not shrinking,” Russell Hancock, chief executive of Joint Venture Silicon Valley, which produces the annual index, said in a press briefing this week. Joint Venture is a nonprofit think tank supported by Bay Area business, labor, government and academics. Its employment numbers are based on state data.

The health of Silicon Valley’s tech industry and employment is particularly important to California, which is heavily dependent on personal income tax revenue. The stock market performance of tech companies has also grown increasingly important to the state, which is facing a budget deficit that the nonpartisan Legislative Analyst’s Office says has grown to $73 billion. 

The combined market capitalization of publicly traded companies in Silicon Valley and San Francisco climbed to a record-high $14 trillion this month, the report says. That’s partly due to Wall Street’s love for companies that have been laying off employees, such as Meta, whose stock is up about 179% from this time last year — and which was responsible for half of the tech job cuts in the Bay Area.

The biggest tech companies “over-hired” during the pandemic so they have been pulling back, Hancock said. For example, while Google and Amazon laid off Bay Area workers last year, their combined workforce at the end of 2023 was more than 17,000 employees above what it was in 2020, the report says.

Steve Levy, a longtime Silicon Valley observer and director of the Center for Continuing Study of the California Economy, said tech job levels are “rebalancing… This is not the dot-com bust,” though he acknowledged that “that doesn’t help the people who were laid off.” 

The region saw job growth in other sectors, such as in arts, entertainment and recreation, and encouraging signs in venture-capital funding of technology such as artificial intelligence.  

“It’s important to the state and nation that the main Silicon Valley economy be healthy,” Levy said. “We produce goods and exports and income and tax revenue.”

Silicon Valley workers’ average annual earnings were $189,000, which Hancock called skewed because of the massive wealth gap and inequality in the area — the Bay Area was home to 84 billionaires in 2022. The median household income was $149,600, about twice that of the U.S. median household income. 

The report also said venture-capital funding decreased for the second year in a row after reaching a record high in 2021, at the height of the pandemic. But Silicon Valley and San Francisco companies still received $30 billion in funding — about the same as in 2016. The region continued to attract the biggest share of venture investments in the nation, at 34%. And venture investment in generative AI companies rose 220% year over year. 

The region, whose population declined by about 79,000 people from deaths and departures in the past three years, actually saw its population grow by 1,800 from mid-year 2022 to mid-year 2023, with Santa Clara and San Mateo counties seeing net positive migration for the first time in eight years. Departures fell 52%, and foreign immigration rose 37%. The report says 23% of the people who left Silicon Valley in 2022 moved to other places in the Bay Area, and another 23% moved to the Monterey Bay area, the Sacramento metro area, San Joaquin Valley or other parts of Northern California.