After major tech corporations slashed jobs, and start-ups slowed to a crawl in 2016, employment growth in the nine-county region known as Silicon Valley seem set to expand rapidly.
SiliconValley.com’s analysis of figures released by state labor officials and Beacon Economics survey found that tech job growth in Silicon Valley had decelerated since 2014 from 6.4 percent, or 42,300, to 3.5 percent, or 26,700 new jobs in 2016.
After taking almost 15 years for Silicon Valley tech employment to exceed the go-go years of 1996 to 2000 in the dot-com boom, Breitbart News reported that the trend seemed be turning down in 2016 with 62,917 terminations at major Silicon Valley tech firms through July. Tech pink slips were up 71 percent compared to the 36,881 through the same period in 2015, according to global outplacement consultancy Challenger, Gray & Christmas, Inc., which tracks employment terminations at large organizations.
Employees at Silicon Valley tech titans were hard hit in 2016 with 12,000 lay-offs at Intel and 5,500 at Cisco and a carry-over from 30,000 job cuts announced by Hewlett Packard in 2015. Tech Hard times caused U.S. salaries for software engineers, which had led the nation for four years, rose by just 2 percent to $97,930 in 2016.
But with the post-election spike in consumer confidence to its highest levels since 2001, U.S. large employers slowed their corporate downsizing in January 2017 by announcing plans to only cut payrolls by 45,934 jobs, 39 percent less than the 75,114 jobs slashed in January 2015, according to Challenger, Gray’s update.
The computer industry in January 2016 suffered the second heaviest layoffs in the nation with employers announced plans to shed 11,003 jobs. But for the first month of 2017, computer industry lay-offs fell by 80 percent to a comparatively low 2,211.
Challenger Gray noted: “Job cuts will not be the leading story in the tech industry this year. It is more likely to be labor shortages, particularly if the new administration continues to tighten the boarders to immigrants, many of whom come to America to work at leading tech companies.”
Retail contributed to over half the job cuts in January 2017 with seven major chains announcing 809 store closings and the elimination of over 22,491 jobs, as the industry continued to be battered by online shopping. Macy led the pack in January with 10,000 terminations as the company permanently closed 68 department stores.
John A. Challenger, chief executive officer of Challenger, Gray commented, “Overall, it was a solid holiday shopping season, but several retailers, including Macy’s were unable to capitalize on stronger consumer confidence and spending.”
Since big companies tend to make employment decisions much slower than small business, the best way to understand job future growth is to watch the National Federation of Independent Business’ Small Business Optimism Index, which is considered a neutral at a score of 100.
After giving a negative readings in every month since 2007 and coming in at a dismal 94 in October 2016, the index has gone ballistic to a January reading of 106, the highest level since 2004. With job cuts in Silicon Valley drying up, a big national economic expansion could rapidly expand Silicon Valley tech jobs.
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