Quick Take
Layoffs in the tech industry have dominated headlines out of Silicon Valley and the Bay Area. With Santa Cruz just over the hill, experts are eyeing whether the county will feel the ripple effects.
Have something to say? Lookout welcomes letters to the editor, within our policies, from readers. Guidelines here.
Whether an act of prescient recession forecasting or a self-fulfilling prophecy, layoffs in the tech industry have dominated headlines since last fall and exacerbated fears of an economic downturn.
Less than two months into 2023, 359 tech companies worldwide have laid off more than 105,000 employees, according to data collected by Layoffs.fyi. Big-name Bay Area companies such as Google, Meta, Salesforce, PayPal and Twitter have led these layoffs, firing thousands of workers.
Though not a tech-centric economy itself, Santa Cruz County sits only a stone’s throw from the central nervous system of the global tech economy. Given that many Santa Cruz County residents commute over the hill, or work remotely for Silicon Valley/Bay Area companies, there are growing questions around how this might affect the county’s economy if the layoffs continue to accelerate.
Speaking on an expert panel at a Santa Cruz County Chamber of Commerce economics forum Wednesday, economist Jon Haveman of Marin Economic Consulting said Santa Cruz would likely feel something from the storm of layoffs, though not for long.
“It will show up in housing markets, there will be some exodus of the population, but I don’t think it’s going to be particularly long term,” Haveman said. “Most of these people are employable. A lot of them will start new businesses that will grow the Bay Area economy and by extension the Santa Cruz economy. I wouldn’t say, ‘Oh my gosh, it’s going to be terrible.’ It’s going to put a dent for a little while, but I don’t think it will be sustained.”
UC Santa Cruz economics professor Robert Fairlie said the impact of the layoffs extends beyond those in the existing job market and has created fears in UCSC students who have staked their educations on a career in tech.
“Our students are worried. I’ve noticed this, talking to some master’s students and undergraduates who are interested in data analytics. They’re nervous about it,” Fairlie said. “So we’ll see. We’ll find out in a couple months — are they are getting hired or are they not, relative to previous years?”
Bonnie Lipscomb, the City of Santa Cruz’s economic development director, emphasized that the general scarcity of tech offices in Santa Cruz has kept the city from taking the same nosedive seen in other jurisdictions. However, she said there is a burgeoning interest in tech in Santa Cruz, especially centered around climate change and the effort to combat it.
“We have a lot of tech entrepreneurs who are coming out of UCSC and starting new businesses,” Lipscomb said, pointing specifically to Cruz Foam, a green-packaging startup. “We have a [tech] accelerator locally. … There are going to be so many opportunities here. There are a lot of smart people here working on … addressing climate change in the community.”
