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The Biggest Business Stories That Rocked the Bay in 2022

Written by Kevin TruongPublished Dec. 30, 2022 • 5:00am
Outside the Twitter HQ building at 1355 Market St. | Mark Leong for The Washington Post via Getty Images

English

Twenty-twenty-two has certainly been an eventful one, as San Francisco continues to contend with the ramifications of the pandemic.

A darkening economic outlook—particularly for the tech sector—spells trouble ahead for a region that is still reeling from the impact of the shift to remote work. Alongside those challenges emerged new technologies and a revived labor movement that will affect the business climate in the years to come.

And, of course, who could forget about Elon Musk? (Even if some of us really want to.)

Here’s a rundown of the biggest business stories in San Francisco for this year.

Downtown’s Decline and Staggered Recovery

A man in a suit struts through the empty Salesforce buildings in Downtown San Francisco on Oct. 27, 2021. | Camille Cohen/The Standard

The bill from the halting return of San Francisco’s Downtown—which continues to suffer from a dearth of office workers—has recently taken the form of a massive $728 million budget deficit projected for the city over the next two years.

The throughline from the pandemic to that number is relatively straightforward. The remote work shift has meant higher vacancy rates for commercial real estate and correspondingly lower property values and tax revenues. Meanwhile, the hollowed-out streets in the city’s business district has highlighted challenging street conditions, worsened by a persistent drug crisis. 

Similar issues are impacting urban business districts around the country, including in Chicago, New York and even across the bay in Oakland. But San Francisco still stands as the center of the remote and hybrid work habits that predominated during the pandemic, due in no small part to its heavy reliance on the tech sector as its economic engine.

There are signs of life, including investment to revamp the city’s iconic Transamerica Pyramid complex, but the overarching message by city and business leaders is clear. Transform Downtown from a 9-to-5 district solely focused on office work to one that can support multiple industries and multiple uses to help usher in the next era for the troubled neighborhood.

The End of the Good Times in Tech

Meta CEO Mark Zuckerberg. | Photo by Drew Angerer/Getty Images

The tech sector boom that helped propel the Bay Area’s economy for much of the past decade—and created a fair share of social strife—appears to be at an inflection point. Mass layoffs have hit both long-standing giants of the industry and up-and-coming companies.

Reasons behind the downturn are varied, but could be a rude awakening for a cohort of workers who have only seen good times and graphs that go up and to the right.

Rising interest rates have cut the ready supply of cheap financing that fueled tech companies’ high-growth strategies and overoptimism about larger economic shifts kicked off by the pandemic has led to pullbacks and retrenchment.

At the same time, the cryptocurrency industry that has garnered billions in investment, seems to be facing its own existential crisis. The collapse of FTX and its wunderkind Sam Bankman-Fried has led to a growing financial contagion in the industry infecting companies and investors exposed to FTX’s allegedly fraudulent practices.

A Labor Movement Revival

Nearly 50,000 grad students, TAs and researchers at the UC protested for better wages, benefits and contracts. | Camille Cohen/The Standard

Two years of a pandemic that relied on the diligent service of essential workers have conspired with changing political winds to boost public approval of unions to its highest point in the country since 1965.

That has led to a turning point to decades of declining union membership and policies that have limited organized labor. The results of this trend are easy to see in the Bay Area.

Organizing of Starbucks workers, one of the most visible labor movements in recent memory, hit San Francisco earlier this year. In August, a location in the Castro commonly known as “Bearbucks” became the first Starbucks in the city to successfully vote to unionize.

That has come alongside union drives among Alcatraz Cruises employees, noted San Francisco bakery Tartine and workers in the cannabis industry.

Existing unions are taking advantage of this moment to flex their power, including Macy’s workers who recently authorized a strike at the retailers’ flagship Union Square location on two of the busiest shopping days of the year.

The most notable labor action of the year, however, was the nearly 50,000 academic workers across the University of California that went on strike in November.

The work stoppage, which was the largest-ever in higher education history, threw a wrench in the normal operation of classrooms and research facilities and has already won some major concessions from the university in the form of higher compensation and improved benefits.

Where Does AI and Automation Go From Here?

Two Lensa AI creations using the Magic Avatar feature in the Cosmic style, left, and Stylish style, right. | Lensa AI

The impact that AI and automation will have on human beings have long been a hallmark of sci-fi, but they are increasingly the subject of very real policy and philosophical debates. 

San Francisco’s position in the center of the innovation economy means that it is on the front lines of how these technologies will be used in the near future. Case in point, Mezli, which bills itself as the world’s first fully automated restaurant and can assemble Mediterranean grain bowls from its robotic box without those pesky labor costs.

Or how about the growing number of Cruise and Waymo “robotaxis” battling for supremacy on the city’s streets? That race continues on even as viral incidents of technical errors and government investigations into self-driving vehicle incidents rise. Elected officials have already started to respond by seeking to rein in their expansion in San Francisco.

And who could forget the release of ChatGPT, the advanced chatbot tool released by San Francisco-based OpenAI that broke the internet for a few days. Or Lensa, an avatar-generating app.

Alongside any novel technology comes a round of hand-wringing of what it means and what it could replace. Discussion about whether AI-generated art steals from existing artists or ChatGPT technology could kill the college essay have already started to predominate.

What comes next is an open question, although presumably, you could ask ChatGPT to help answer it.

Trigger Warning: Elon Musk

Billionaire Elon Musk purchased Twitter for $44 billion. | Chesnot/Getty Images

Just in time for the holidays, Elon Musk has suspended a number of journalists who cover the social media platform from Twitter, pointing to questionable “doxxing” claims as a rationale.

It’s just the latest development of a storyline that started out as a joke, turned into an ordeal and now appears to be a lasting nightmare for the chronically online with little means of escape, other than Mastodon.

Soon after completing his $44 billion purchase of the company in October under court order, Musk and his team took to the hard work of chaotically firing thousands of employees, cutting support for nonprofits and getting folks to commit to his “hardcore” vision of Twitter.

Apparently, that looks like ruling the site by fiat, putting out contradictory messaging and using public opinion polls to make major decisions. If the audience response at a recent Dave Chappelle show in San Francisco is any indication, Musk’s recent activity hasn’t won him many fans locally.

More recently, it has emerged that Twitter has been stiffing its landlords of rent, withholding payments to vendors and considering denying severance payments to laid-off employees. There is a dire financial reality behind these decisions, predicated on declining advertiser revenue and $1 billion in payments to cover the interest on the debt taken on via the purchase of the company.

For the sake of a weary world, here’s hoping that a strong dose of “energy healing” might mean a quieter 2023.

English

Kevin Truong can be reached at [email protected]


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