Sharp Decline in San Francisco’s Tech Employment

The heartbeat of the global innovation economy, Silicon Valley, is experiencing an unmistakable downturn. As of April 2025, the number of information technology jobs in San Francisco and Northern Silicon Valley fell to 107,700 – the lowest since the early COVID-19 months of June 2020. This figure marks a 19% drop from the peak of 133,100 jobs in August 2022.

Professional and Technical Services Hit Hard Too

The tech job crisis extends beyond core IT roles. Professional, scientific, and technical services industries have also suffered notable job losses, declining to 207,800 positions – also the lowest since mid-2020. Since June 2022, these sectors have lost around 21,600 jobs, representing approximately 9% of the workforce.

Total Tech Job Cuts: 47,000 Since Mid-2022

Cumulatively, the regional tech ecosystem has shed over 47,000 jobs in less than two years. This wave of layoffs has profound implications for local economies reliant on high-wage earners, commercial real estate taxes, and a thriving service sector.

Echoes of the Dot-Com Bust?

While the current contraction is severe, it still falls short of the post-dot-com crash between 2000 and 2002, where nearly 29% of tech jobs were lost in just 18 months. Recovery back then took nearly a decade. Yet, as highlighted in the BLS and Wolfstreet chart, the trajectory is eerily similar: a steep climb followed by an accelerated drop.

What’s Driving the Decline?

This downturn is fueled by a confluence of macroeconomic headwinds. The Federal Reserve’s aggressive interest rate hikes have made capital expensive, pushing tech firms to scale back. Simultaneously, persistent inflation and rising operational costs have dampened hiring and stalled expansion plans across startups and big tech alike.

From Hypergrowth to Sustainable Operations

The VC-fueled growth model is losing favor. Profitability, operational efficiency, and long-term sustainability are now the new benchmarks. Many startups that once thrived on perpetual funding rounds are downsizing or folding. Even giants like Meta, Amazon, and Google have undergone layoffs, shifting focus to core growth engines like AI and industrial automation.

Real Estate and Economic Ripple Effects

The impact on commercial real estate is undeniable. Office vacancies are rising, rents are falling, and municipal tax revenues are under pressure. Displaced tech workers face a tighter job market, especially in segments previously considered “immune” to economic cycles.

A Structural Shift or a Temporary Dip?

The million-dollar question is whether this is a cyclical adjustment or a structural transformation. Investors and policymakers alike are watching closely. The tech sector may be transitioning from speculative, capital-intensive models to a more mature, disciplined era.