Silicon Valley companies have been experiencing layoffs and hiring freezes. Here’s a list.
Good morning, and welcome to the Essential California newsletter. It’s Wednesday, June 22. I’m Justin Ray.
This year has been hellish for several tech companies based in the Bay Area, especially in the last month. Established businesses and startups alike have seen layoffs and hiring freezes.
Which companies have been impacted?
- Coinbase, a cryptocurrency exchange platform, laid off 18% of its workforce — or about 1,100 people.
- Short-term rentals startup Sonder laid off a fifth of its corporate employees. Touted as an upscale alternative to Airbnb, the company was valued at $1.9 billion less than a year ago.
- Online personal shopping and styling service Stitch Fix laid off 15% of its salaried roles — around 330 employees.
- Healthcare startup Carbon Health laid off 250 employees, around 8% of the company’s global workforce.
- Netflix laid off 150 employees and dozens of contractors and part-time workers in late May. Many on social media noted that several cuts impacted social media teams, writers and editors who aimed to elevate diverse content and talent.
Meta (Facebook’s parent), Twitter, Intel, Lyft, and Uber have abruptly imposed hiring freezes, according to Fortune. You can learn more at Layoffs.Fyi. The site, which launched at the beginning of the pandemic, tracks tech industry layoffs.
What does it mean?
Some experts see tech as a bellwether for the greater economy. That’s because investing in companies often means forgoing immediate profits and playing the long game. During times of economic turmoil, investors are less likely to engage in any form of risk.
Problems in tech can have a ripple effect. San Francisco’s chief economist Ted Egan told The Times that generally, less spending and economic activity means more demand for social services. The city — like many in California — has been slowly clawing itself back to pre-pandemic times. However, recent national economic trends threaten its progress.
“It started when the Federal Reserve began to raise interest rates,” Egan said. “Tech stock prices, and venture capital investment, are both highly sensitive to interest rates. When tech companies that are not yet profitable suddenly see that fundraising is getting challenging, they have to go into cost-savings mode, and that can mean layoffs.”
When I asked if the layoffs and hiring freezes meant dire times to come in San Francisco, Egan said it isn’t likely.
“The labor market is still quite tight,” Egan said. “In San Francisco, even in the tech industry, where a lot of the layoffs are concentrated, there are three open job listings for every hire, so a lot of jobs are still going unfilled.”
And now, here’s what’s happening across California:
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This new California coronavirus wave isn’t sticking to the script: Big spread, less illness. For the past two years, COVID-19 has followed predictable, if painful, patterns. But in a world with vaccines and treatments, the latest wave is acting differently from previous ones; despite wide circulation of the coronavirus, the impact on hospitals has been relatively minor. Los Angeles Times
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POLITICS AND GOVERNMENT
A bacteria outbreak in two state hatcheries is forcing the California Department of Fish and Wildlife to euthanize about 350,000 rainbow trout, which could affect fishing stock in some state waterways this summer. Los Angeles Times
California’s next cannabis battle may be coming to a city near you. Six years ago, voters approved Proposition 64 to authorize Californians who are at least 21 years old to buy, grow and use it for recreational purposes. The provision also allowed local governments discretion to ban cannabis businesses — and the vast majority of them did. However, cannabis users and companies are turning their attention to the local arena, launching municipal campaigns to change the minds of voters. Calmatters
CRIME, COURTS AND POLICING
TV correspondent accused of asking child for naked photos. Dr. Bruce Hensel — who had long served as NBC’s chief on-air medical correspondent in New York and Los Angeles — repeatedly texted a child from March to August 2019, at some points asking her for photos that were “sexy and private,” according to records submitted to the California Medical Board earlier this year. Los Angeles Times
Investigators probing ‘deputy gang’ violence were told not to ask about Banditos, chief says. Los Angeles County Sheriff Alex Villanueva was moving into office in late 2018 when then-Capt. Matthew Burson was overseeing a criminal investigation into an alleged assault involving East L.A. deputies at a station party. At the time, Burson said he was given instructions on behalf of the incoming sheriff on how to handle the case: Investigators, he was told, should avoid questions about the Banditos, the gang-like group of deputies whose members were accused of instigating the fight. The information came to light through a sworn declaration filed in court Tuesday. Los Angeles Times
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HEALTH AND THE ENVIRONMENT
L.A. needs 90,000 trees to battle extreme heat. Will residents step up to plant them? Trees provide myriad benefits to Angelenos, including capturing stormwater runoff. Neighborhoods that lack them can be 10 degrees warmer than surrounding areas. Yet Los Angeles is finding it difficult to maintain them in neighborhoods for several reasons. Los Angeles Times
Yikes. The largest reservoir in a state system that provides water to 27 million Californians has already reached its peak level for the year, barely surpassing half its capacity. State water officials said Lake Oroville was at 51% of capacity and 66% of its historical average for this point in the year. “DWR is taking actions to conserve as much water as possible within Oroville reservoir,” the Department of Water Resources said. Los Angeles Times
Forget dating apps — the “Marriage Pact” goes for the long haul. A student project at Stanford University has become a popular dating tool across campuses in America. The New Yorker Radio Hour explains how a survey called “The Marriage Pact” asks probing questions about an individual’s beliefs to set couples up for long-term success. WNYC Studios
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Today’s California memory is from John W. Rosskopf:
In the mid-’50s, I lived in Sacramento in front of the train tracks that took the animals and carnival rides to the State Fair. All of the kids in the neighborhood would save their money all summer so we could go to the State Fair on opening day. We knew the time was getting close when the trains would start rolling in the middle of the night. We were all disappointed when they moved the fair from Stockton Boulevard and Broadway to Cal Expo.
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