Silicon Valley Watcher - Former FT journalist Tom Foremski reporting from the intersection of technology and media

More Silicon Valley Job Cuts Add To Already High Unemployment

Posted by Tom Foremski - November 9, 2009

Electronic Arts, the Silicon Valley based video game company, yesterday said it plans to cut about 1500 workers or 17% of its total staff.

UPDATE: Adobe is cutting 680 jobs: Adobe To Cut 9 Percent Of Workforce

The job losses will add to already high levels of unemployment in the region. And they come at a very bad time - right before the holiday season. This will spread anxiety among all Silicon Valley workers, even at healthy firms -- EA and Adobe aren't in trouble.

Tamara Carleton, writing at New Geography reports "A slow job recovery in Silicon Valley."

Over the last year, California lost 732,700 jobs, the worst hit of all U.S. states, according to the U.S. Bureau of Labor Statistics.

The job situation in Silicon Valley has not rebounded as quickly as hoped. The area's jobless rate is nearly double what it was a year ago, according to the state's Employment Development Department. Nearly three times as many people are actively looking for work, versus during the dot-com bust, when the jobless rate peaked at 9.2 percent in early 2003. The recent number of unemployed is 110,900, representing an 87 percent increase from the prior year, according to the EDD.

The technology industry has continued to take a beating in the past six months. Cisco cut 700 local jobs in July, and Lockheed Martin slashed nearly 500 local jobs in August, based on state filings. Most recently in October, Sun Microsystems Inc. announced that it would eliminate up to 3,000 jobs across all sites, or 10 percent of its worldwide work force through the new year, due to the takeover by Oracle Corp.


While there are local business leaders such as Eric Schmidt, CEO of Google saying that the economy is improving, it might not mean much for Silicon Valley.

Tamara Carleton points out:

Job growth in the Valley has not been creating net jobs for over a decade...overall employment has actually dropped by 6 percent over the last 12 years, according to data from the U.S. Bureau of Labor Statistics.

These are very discouraging statistics especially since the past 12 years includes the boom years of the dotcom expansion.

The sobering fact is that a tech led recovery will likely be a slow jobs recovery. If you add into the mix other trends that are impacting the workforce such as greater outsourcing; more use of independent contractors; and greater productivity from investments in new business processes, a jobs recovery could become even slower.


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