Among his peers, Aaditya Talati has taken to calling the last year “the season of the rescinded offer.”
The 21-year-old corporate finance major at San Jose State University has the type of résumé that typically would have netted a job offer by now: outstanding grades, campus organization leadership positions and professional internships each year he was in school.
But while searching for a full-time role this year, he kept running into a wall. Offers would either get yanked near the end of a long interview process due to company cuts, or the pool of candidates was so large he would never hear back.
A scan of recent headlines seemed to confirm his fears. Top tech companies across the Bay Area were conducting layoffs, which led to the pace of hiring slowing, wage growth shrinking and more people moving out of the state for better opportunities.
“It really messes with your head,” Talati said. “You can’t help but feel that you’re not good enough, even though it’s actually the bar that is getting raised.”
The experiences of those early in their careers paint a picture of existential dread, but the numbers tell a different story. San Francisco’s unemployment rate sits at a low 3.6%, and the city has roughly the same number of office jobs as it had before the pandemic, although it’s unclear how many are now remote roles.
What is different is that the tech job market is much more static than it was at the height of the pandemic, meaning there are fewer opportunities for those jumping in.
“It’s safe to say that the ‘Great Resignation’ doesn’t exist anymore,” said Amanda Hahn, chief marketing officer of HireVue, a human resources software company.
“Despite the negative headlines, we’re still pretty much right where we were at pre-pandemic,” Hahn said of the low unemployment rate. “Our clients aren’t telling us that they have a plethora of candidates for any given roles as a result of the recent layoffs. If anything, organizations are still finding themselves in a place of lacking critical talent.”
The flow of venture capital funding also bodes well for the region. More than a third of the money invested in startups so far this year flowed through the Bay Area, according to Pitchbook — more than twice as much as any other major metropolitan market.
“Yes, our office vacancy rates are high, but it’s clearly not because of the economy,” said Robert Sammons, senior director of research at real estate firm Cushman & Wakefield. “The conversation should actually be about how [office] work is changing.”
Back to reality
Vivek Agarwal has seen the tech industry’s ups and downs over the decades. His journey from India to Silicon Valley in the mid-1980s is a familiar one. Agarwal got his master’s in engineering at the University of Southern California and started his career at Intel Corp., just as the microprocessor and chip business that powered personal computers was taking off.
He spent three decades with the company, earning a Master of Business Administration along the way, before becoming a lecturer at San Jose State and launching a career consulting business.
Agarwal attributes the slowdown in hiring and mass cuts in tech to the industry’s largest companies reaching the pinnacles of their initial growth stages.
“Imagine an S-shaped curve,” he said. “These companies are at a stage where revenue is starting to flatten, so they’re now reprioritizing things in search of the next great innovation to stave off a permanent decline.”
Agarwal argues that the past 18 months or so of layoffs were a response to the peak pandemic era, when low interest rates and mass remote work led to excessive spending.
According to Layoffs.fyi, the layoff peak came in 2023, when approximately 264,000 tech workers were let go. Around that time, X, Meta, Salesforce and Google trimmed tens of thousands of workers while vowing to prioritize profit margins after a decade of nonstop hiring.
While there have been recent notable layoffs — and the industry overall has lost jobs year-over-year — there is hope that the worst of the bleeding is over. One bright spot is that the pace of layoffs has slowed: Cuts in tech jobs are down more than 50% from 2023, Layoffs.fyi data show.
The AI arms race
Tech isn’t the only game in town. The healthcare, hospitality and government industries continue to add jobs across most metropolitan areas, according to California’s Employment Development Department.
But in Silicon Valley, the new arms race is in artificial intelligence. According to Pitchbook, Bay Area-based companies absorbed 42.2% of global generative AI venture capital funding through the first half of this year.
“AI is not going to take your job,” said Ahmed Banafa, an engineering professor at San Jose State and author of several books about the evolution of Silicon Valley. “It’s the people who know how to use AI who will take your job.”
Banafa said he has made generative AI a requirement for graduating seniors taking his capstone project course. “If I don’t see an AI component in your product, I’m not going to sign off,” he said. “Because if the job market is changing, then you need to update your skills to meet it where it’s at.”
His colleague Agarwal — who teaches mainly business students, as opposed to engineers — said he expects the number of roles supporting the operations of AI companies to grow as the technology matures and interest rates cool.
“Think more about business analytics as opposed to business development,” he said. “And instead of just learning about code, start thinking about data science and large language models.”
For Talati, the high-achieving but anxious soon-to-be grad, this means it’s back to the drawing board when the school year is over. For his next job search, Talati said, he’s focusing on connecting with someone inside a company who can vouch for him, rather than just going through the interview process.
“I’m back to being a LinkedIn warrior now. It sucks, but it’s necessary,” he said.