Kevin V. Nguyen

Layoffs largely <a href="https://sfstandard.com/2023/11/06/san-francisco-tech-layoffs-continue/">defined the tech industry</a> in 2023 as brutal cuts meant thousands of San Francisco residents lost their jobs. As the year went on, however, economists predicted the tide was turning, citing positive job numbers and the growth of the AI industry as evidence that the economy had passed an inflection point.

San Francisco tech layoffs crept up in October. See why

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Layoffs largely <a href="https://sfstandard.com/2023/11/06/san-francisco-tech-layoffs-continue/">defined the tech industry</a> in 2023 as brutal cuts meant thousands of San Francisco residents lost their jobs. As the year went on, however, economists predicted the tide was turning, citing positive job numbers and the growth of the AI industry as evidence that the economy had passed an inflection point.

But—as it turns out—that optimism was premature.

But—as it turns out—that optimism was premature.

According to the state Employment Development Department’s latest revised reports, San Francisco and San Mateo counties lost 16,700 jobs overall between February 2023 and February 2024, with 14,300 jobs lost in the information sector, which includes tech.&nbsp;&nbsp;

According to the state Employment Development Department’s latest revised reports, San Francisco and San Mateo counties lost 16,700 jobs overall between February 2023 and February 2024, with 14,300 jobs lost in the information sector, which includes tech.&nbsp;&nbsp;

EDD’s monthly job statistics usually change after initial reporting as more employers and households respond to surveys, according to a department spokesperson. State officials had originally charted a slowdown of the decade-long run of pre-pandemic job growth. Instead, revised data highlighted a drop in total jobs, a signal of a continuing downturn rather than an economic “soft landing.”

EDD’s monthly job statistics usually change after initial reporting as more employers and households respond to surveys, according to a department spokesperson. State officials had originally charted a slowdown of the decade-long run of pre-pandemic job growth. Instead, revised data highlighted a drop in total jobs, a signal of a continuing downturn rather than an economic “soft landing.”

“Tech is actually much worse than it was listed before,” said Ted Egan, the city’s chief economist. “Based on old data, you could say that layoffs were moderating, but there’s no sign of it recovering at this point.”&nbsp;

“Tech is actually much worse than it was listed before,” said Ted Egan, the city’s chief economist. “Based on old data, you could say that layoffs were moderating, but there’s no sign of it recovering at this point.”&nbsp;

Although many have put their hopes in AI as the solution to the downward trajectory, experts are skeptical of the industry’s ability to bring back enough jobs by itself.

Although many have put their hopes in AI as the solution to the downward trajectory, experts are skeptical of the industry’s ability to bring back enough jobs by itself.

Several communal workspaces and meeting rooms line the fifth floor of the IKEA building at Hej!Workshop  on Market Street in San Francisco on Wednesday, March 6, 2024. Just months after opening its store downtown, Ingka Group, the Swedish company that operates most of the world’s IKEA stores, has unveiled a new co-working space called  Hej!Workshop , its first ever in the country.

<figure class="wp-block-image size-large"><img src="https://content.sfstandard.com/wp-content/uploads/2024/03/inlined01_20230321-sanfranciscojobseconomy.jpg?w=2500" alt="A modern conference room with a wooden table, chairs, and a monitor on the wall." class="wp-image-262327"/><figcaption class="wp-element-caption">Artificial intelligence companies were responsible for 28% of San Francisco&#8217;s total leasing activity, according to CBRE. </figcaption></figure>

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<figure class="wp-block-image size-large"><img src="https://content.sfstandard.com/wp-content/uploads/2024/03/inlined01_20230321-sanfranciscojobseconomy.jpg?w=2500" alt="A modern conference room with a wooden table, chairs, and a monitor on the wall." class="wp-image-262327"/><figcaption class="wp-element-caption">Artificial intelligence companies were responsible for 28% of San Francisco's total leasing activity, according to CBRE. </figcaption></figure>

<figure class="wp-block-image size-large"><img src="https://content.sfstandard.com/wp-content/uploads/2024/03/inlined01_20230321-sanfranciscojobseconomy.jpg?w=2500" alt="A modern conference room with a wooden table, chairs, and a monitor on the wall." class="wp-image-262327"/><figcaption class="wp-element-caption">Artificial intelligence companies were responsible for 28% of San Francisco&#8217;s total leasing activity, according to CBRE. </figcaption></figure>

Industry “giants” like San Francisco-based OpenAI and Anthropic have roughly 770 and 300 employees, respectively, according to <a href="https://www.theinformation.com/articles/pro-weekly-the-hiring-boom-at-ai-companies?rc=zqhkcv">reporting from The Information</a>, as opposed to the tens of thousands employed by the likes of Amazon, Alphabet and Meta.&nbsp;

Industry “giants” like San Francisco-based OpenAI and Anthropic have roughly 770 and 300 employees, respectively, according to <a href="https://www.theinformation.com/articles/pro-weekly-the-hiring-boom-at-ai-companies?rc=zqhkcv">reporting from The Information</a>, as opposed to the tens of thousands employed by the likes of Amazon, Alphabet and Meta.&nbsp;

And there&#8217;s every reason to think their workforces will never be as large, even if their market capitalizations continue to mushroom.

And there's every reason to think their workforces will never be as large, even if their market capitalizations continue to mushroom.

And there&#8217;s every reason to think their workforces will never be as large, even if their market capitalizations continue to mushroom.

“San Francisco is at the epicenter of AI, but the number of jobs being generated from it is very modest,” said Michael Bernick, an employment attorney with law firm Duane Morris and a former director of the state EDD.

“San Francisco is at the epicenter of AI, but the number of jobs being generated from it is very modest,” said Michael Bernick, an employment attorney with law firm Duane Morris and a former director of the state EDD.

As a point of reference, job trend tracker Comprehensive.io, <a href="https://sfstandard.com/2023/10/31/san-francisco-ai-hiring-data/">found there</a> were only around 2,000 AI-focused job positions posted over three months last year.&nbsp;

Is San Francisco really the AI capital of the world? Here’s what data shows

As a point of reference, job trend tracker Comprehensive.io, <a href="https://sfstandard.com/2023/10/31/san-francisco-ai-hiring-data/">found there</a> were only around 2,000 AI-focused job positions posted over three months last year.&nbsp;

That coupled with more aggressive layoffs across big tech has led to a gloomier economic outlook. “There’s no doubt that the major tech firms over-hired at the beginning of the pandemic,” Bernick said. “Now, they’re shedding more jobs than the startups are generating.”&nbsp;

That coupled with more aggressive layoffs across big tech has led to a gloomier economic outlook. “There’s no doubt that the major tech firms over-hired at the beginning of the pandemic,” Bernick said. “Now, they’re shedding more jobs than the startups are generating.”&nbsp;

Where does that leave the SF economy now?&nbsp;

<h2 class="wp-block-heading" id="h-where-does-that-leave-the-sf-economy-now-nbsp">Where does that leave the SF economy now?&nbsp;</h2>

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<h2 class="wp-block-heading" id="h-where-does-that-leave-the-sf-economy-now-nbsp">Where does that leave the SF economy now?&nbsp;</h2>

Egan said the new data necessitates a less sunny economic message in his regular briefings to city leaders. “I don’t remember revisions ever being this big,” Egan said. “Next month, we’re going to have to have a different tone. We thought we were finally pulling ourselves out of it.”&nbsp;

Egan said the new data necessitates a less sunny economic message in his regular briefings to city leaders. “I don’t remember revisions ever being this big,” Egan said. “Next month, we’re going to have to have a different tone. We thought we were finally pulling ourselves out of it.”&nbsp;

The city’s economic outlook would have been worse had it not been for the health care industry&#8217;s strong year-over-year job growth, according to Bernick. The continuing rise in the Bay Area’s cost of living has also made hiring across all industries more difficult, he added.&nbsp;&nbsp;

The city’s economic outlook would have been worse had it not been for the health care industry's strong year-over-year job growth, according to Bernick. The continuing rise in the Bay Area’s cost of living has also made hiring across all industries more difficult, he added.&nbsp;&nbsp;

The city’s economic outlook would have been worse had it not been for the health care industry&#8217;s strong year-over-year job growth, according to Bernick. The continuing rise in the Bay Area’s cost of living has also made hiring across all industries more difficult, he added.&nbsp;&nbsp;

An advertisement for creative office buildouts for commercial real estate at 130 Sutter Street in Downtown San Francisco on Friday, Sept. 22, 2023. Tech sector companies in downtown San Francisco have begun to require staff and employees to return to work in their Downtown San Francisco office after working remote for many years during the Covid pandemic.

<figure class="wp-block-image size-large"><img src="https://content.sfstandard.com/wp-content/uploads/2024/03/inlined03_20230321-sanfranciscojobseconomy.jpg?w=2500" alt="A storefront with &quot;AVAILABLE NOW Creative Office Buildouts&quot; sign, reflecting city buildings." class="wp-image-262329"/><figcaption class="wp-element-caption">Despite being at the epicenter of the AI revolution, San Francisco has only seen modest job growth that does not outpace the number of tech jobs lost last year.</figcaption></figure>

According to the <a href="https://www.bls.gov/news.release/laus.nr0.htm">U.S. Bureau of Labor Statistics</a>, California’s unemployment rate, 5.3%, is now the highest in the country. The San Francisco metro area’s seasonally adjusted unemployment rate has ticked up from 3.7% in 2022 to 4.1% today. The 10-year low for the unemployment rate was 2.5%, which was reached in July 2019.

According to the <a href="https://www.bls.gov/news.release/laus.nr0.htm">U.S. Bureau of Labor Statistics</a>, California’s unemployment rate, 5.3%, is now the highest in the country. The San Francisco metro area’s seasonally adjusted unemployment rate has ticked up from 3.7% in 2022 to 4.1% today. The 10-year low for the unemployment rate was 2.5%, which was reached in July 2019.

San Francisco&#8217;s Controller&#8217;s Office measures the state of the city’s economy in two main ways: the number of jobs created or lost, and the amount of people coming into the city daily. Both directly impact tax revenues that flow into the city’s budget.&nbsp;

San Francisco's Controller's Office measures the state of the city’s economy in two main ways: the number of jobs created or lost, and the amount of people coming into the city daily. Both directly impact tax revenues that flow into the city’s budget.&nbsp;

San Francisco&#8217;s Controller&#8217;s Office measures the state of the city’s economy in two main ways: the number of jobs created or lost, and the amount of people coming into the city daily. Both directly impact tax revenues that flow into the city’s budget.&nbsp;

Outside of health care, Egan said there are a few bright spots. Entertainment, food services and other hospitality businesses have added jobs since last year. But tech’s slowdown means the total pie is still shrinking.&nbsp;

Outside of health care, Egan said there are a few bright spots. Entertainment, food services and other hospitality businesses have added jobs since last year. But tech’s slowdown means the total pie is still shrinking.&nbsp;

“We’re all waiting for this [economy] to turn a corner,” Egan said.&nbsp;

“We’re all waiting for this [economy] to turn a corner,” Egan said.&nbsp;

<h2 class="wp-block-heading" id="h-the-2010s-tech-boom-was-different">The 2010s tech boom was different</h2>

One clear green shoot in the struggling state of San Francisco’s economic recovery has been <a href="https://sfstandard.com/2023/05/22/mayor-breed-declares-sf-the-ai-capital-of-the-world-can-leaders-keep-it-that-way/">the city’s central position</a> in the development of AI.&nbsp;

Mayor declares San Francisco the ‘AI capital of the world.’ Can leaders keep it that way?

One clear green shoot in the struggling state of San Francisco’s economic recovery has been <a href="https://sfstandard.com/2023/05/22/mayor-breed-declares-sf-the-ai-capital-of-the-world-can-leaders-keep-it-that-way/">the city’s central position</a> in the development of AI.&nbsp;

The industry has been a rare bright spot for the city’s flagging commercial real estate market. Artificial intelligence companies were responsible for 28% of total leasing activity in 2023 and remain a significant source of demand in 2024, according to Colin Yasukochi, the executive director of CBRE’s Tech Insights Center.&nbsp;

The industry has been a rare bright spot for the city’s flagging commercial real estate market. Artificial intelligence companies were responsible for 28% of total leasing activity in 2023 and remain a significant source of demand in 2024, according to Colin Yasukochi, the executive director of CBRE’s Tech Insights Center.&nbsp;

In just the past year, AI firms, including <a href="https://sfstandard.com/2023/10/27/openai-uber-headquarters-mission-bay/">OpenAI,</a> Anthropic and <a href="https://sfstandard.com/2024/02/15/unlearn-ai-quadruples-sf-office-space/">Unlearn.AI</a> have signed some of the city’s largest office leases.&nbsp;&nbsp;

ChatGPT-maker OpenAI officially inks massive San Francisco office lease

Growing AI company quadruples its office space in San Francisco

In just the past year, AI firms, including <a href="https://sfstandard.com/2023/10/27/openai-uber-headquarters-mission-bay/">OpenAI,</a> Anthropic and <a href="https://sfstandard.com/2024/02/15/unlearn-ai-quadruples-sf-office-space/">Unlearn.AI</a> have signed some of the city’s largest office leases.&nbsp;&nbsp;

However, the scale of activity <a href="https://sfstandard.com/2023/09/06/ai-deals-represent-hope-but-not-salvation-for-san-franciscos-struggling-office-market/">pales in comparison</a> to the mass leasing and office demand growth during the last decade. A parallel situation is occurring in the city’s job market.

AI won’t save San Francisco’s struggling office market, experts say

However, the scale of activity <a href="https://sfstandard.com/2023/09/06/ai-deals-represent-hope-but-not-salvation-for-san-franciscos-struggling-office-market/">pales in comparison</a> to the mass leasing and office demand growth during the last decade. A parallel situation is occurring in the city’s job market.

A pro-AI Salesforce logo inside the Moscone Center in San Francisco on Tuesday, Sept. 12, 2023. At this year’s Dreamforce event, Marc Benioff committed that if San Francisco does not address its drug and homeless problem, it might be the last time the event takes place in the city. AI tools had a significant presence at the event, and discussions revolved around Salesforce’s efforts to protect user data. However, despite the recent rise in COVID-19 cases in San Francisco, few COVID-19 protocols were observed, and many attendees remained unmasked.

<figure class="wp-block-image size-large"><img src="https://content.sfstandard.com/wp-content/uploads/2024/03/inlined02_20230321-sanfranciscojobseconomy.jpg?w=2500" alt="A glowing sign reads &quot;I ♥ AI&quot; against a dark background, with a heart symbol replaced by a cloud icon." class="wp-image-262328"/><figcaption class="wp-element-caption">AI might be growing, but the tech industry at large is still contracting in San Francisco. </figcaption></figure>

Jeremiah Owyang, general partner at Blitzscaling Ventures, an investor specializing in AI, said inherent to the culture of AI startups is a mindset he terms “AI-first,” which leads companies to hire humans slowly, if at all.

Jeremiah Owyang, general partner at Blitzscaling Ventures, an investor specializing in AI, said inherent to the culture of AI startups is a mindset he terms “AI-first,” which leads companies to hire humans slowly, if at all.

“Before you ask a human anything, you ask AI first,” Owyang said. “It does not mean, replace all humans with AI, it means you just try to use AI to be efficient and productive.”

“Before you ask a human anything, you ask AI first,” Owyang said. “It does not mean, replace all humans with AI, it means you just try to use AI to be efficient and productive.”

This represents a shift in the economy in line with previous technological revolutions. “Even though founders are coming here, they’re not all going to set up shop and operate massive companies,” he said.&nbsp;

This represents a shift in the economy in line with previous technological revolutions. “Even though founders are coming here, they’re not all going to set up shop and operate massive companies,” he said.&nbsp;

One example is Midjourney, which was founded two years ago in San Francisco by David Holz. The bootstrapped AI image generation startup recently reached a $200 million annual revenue run rate, implying a $10 billion-plus valuation, according to <a href="https://www.cbinsights.com/research/midjourney-revenue-valuation/">business analytics firm</a> CB Insights.&nbsp;

One example is Midjourney, which was founded two years ago in San Francisco by David Holz. The bootstrapped AI image generation startup recently reached a $200 million annual revenue run rate, implying a $10 billion-plus valuation, according to <a href="https://www.cbinsights.com/research/midjourney-revenue-valuation/">business analytics firm</a> CB Insights.&nbsp;

Typically, a company with these financials would have a headcount of hundreds, if not thousands of employees. But, as Midjourney’s <a href="https://www.midjourney.com/home">website proudly notes</a>, the bootstrapped company only has 11 full-time staff members.&nbsp;

Typically, a company with these financials would have a headcount of hundreds, if not thousands of employees. But, as Midjourney’s <a href="https://www.midjourney.com/home">website proudly notes</a>, the bootstrapped company only has 11 full-time staff members.&nbsp;

As a point of comparison, Salesforce, San Francisco’s top-ranked private employer, reached a $10 billion market capitalization in 2010. At that time the company employed around 4,000 people.&nbsp;

As a point of comparison, Salesforce, San Francisco’s top-ranked private employer, reached a $10 billion market capitalization in 2010. At that time the company employed around 4,000 people.&nbsp;

Grant Long, founder of AMID AI Lab, uses the work spaces at Hej!Workshop on the fifth floor of the IKEA building on Market Street in San Francisco on Wednesday, March 6, 2024. Just months after opening its store downtown, Ingka Group, the Swedish company that operates most of the world’s IKEA stores, has unveiled a new co-working space called Hej!Workshop, its first ever in the country.

<figure class="wp-block-image size-large"><img src="https://content.sfstandard.com/wp-content/uploads/2024/03/inlined04_20230321-sanfranciscojobseconomy.jpg?w=2500" alt="A man in a denim shirt is sitting at a table, looking up and holding a pen, with glasses and a water glass nearby." class="wp-image-262330"/><figcaption class="wp-element-caption">Grant Long, founder of Amid Labs, founded an incubator last year that hosts AI entrepreneurs. He said the current explosion is different from the last tech boom, where some startups grew into corporations that hired on a massive scale.</figcaption></figure>

Grant Long is the founder and CEO of <a href="https://www.amid.ai/lab">Amid Labs</a>, an AI incubator <a href="https://sfstandard.com/2024/03/07/ikea-bets-on-san-francisco-office-coworking/">based in the city’s struggling Mid-Market neighborhood</a>.&nbsp;

Ikea and WeWork had a baby, and its name is Hej! Meet the people already working there

Grant Long is the founder and CEO of <a href="https://www.amid.ai/lab">Amid Labs</a>, an AI incubator <a href="https://sfstandard.com/2024/03/07/ikea-bets-on-san-francisco-office-coworking/">based in the city’s struggling Mid-Market neighborhood</a>.&nbsp;

Prior to shifting his focus to building new AI products and coaching entrepreneurs, Long started his tech career in 2011, around the time companies like Airbnb, Dropbox and Uber began their global ascent.&nbsp;

Prior to shifting his focus to building new AI products and coaching entrepreneurs, Long started his tech career in 2011, around the time companies like Airbnb, Dropbox and Uber began their global ascent.&nbsp;

During the previous boom, software companies needed much more human and capital resources to get off the ground, meaning new jobs were more plentiful for those flocking to the city. These days, Long said, the barriers to bringing a product to market are much lower.&nbsp;

During the previous boom, software companies needed much more human and capital resources to get off the ground, meaning new jobs were more plentiful for those flocking to the city. These days, Long said, the barriers to bringing a product to market are much lower.&nbsp;

“Some founders are making the choice to remain lean,” Long said. “These AI tools allow for them to scale the output of small teams in lieu of growing headcount.”&nbsp;

“Some founders are making the choice to remain lean,” Long said. “These AI tools allow for them to scale the output of small teams in lieu of growing headcount.”&nbsp;

Even as AI booms, San Francisco is still losing jobs

California lawmakers return to work on Wednesday for the start of an election-year legislative session dominated by decisions on artificial intelligence and the state&#8217;s struggling budget.

California lawmakers return to work on Wednesday for the start of an election-year legislative session dominated by decisions on artificial intelligence and the state's struggling budget.

California lawmakers return to work on Wednesday for the start of an election-year legislative session dominated by decisions on artificial intelligence and the state&#8217;s struggling budget.

The budget is a big issue every year in California, which is the nation&#8217;s most populous state and has an economy larger than that of all but four countries. But this year, lawmakers and Democratic Gov. Gavin Newsom will have to figure out how to cover an estimated $68 billion deficit—a shortfall that is larger than the entire operating budgets of many states.

The budget is a big issue every year in California, which is the nation's most populous state and has an economy larger than that of all but four countries. But this year, lawmakers and Democratic Gov. Gavin Newsom will have to figure out how to cover an estimated $68 billion deficit—a shortfall that is larger than the entire operating budgets of many states.

The budget is a big issue every year in California, which is the nation&#8217;s most populous state and has an economy larger than that of all but four countries. But this year, lawmakers and Democratic Gov. Gavin Newsom will have to figure out how to cover an estimated $68 billion deficit—a shortfall that is larger than the entire operating budgets of many states.

And with California companies at the forefront of the artificial intelligence boom, a number of state lawmakers are eyeing new rules to govern the use of the technology before it can dominate daily life—much like social media has.

And with California companies at the forefront of the artificial intelligence boom, a number of state lawmakers are eyeing new rules to govern the use of the technology before it can dominate daily life—much like social media has.

The California Legislature is scheduled to convene Wednesday afternoon, giving lawmakers a week to settle in before Newsom sends over his first budget plan. Cutting the budget is never easy, but it&#8217;s especially difficult in an election year when many legislators must then ask voters in November to reelect them.

The California Legislature is scheduled to convene Wednesday afternoon, giving lawmakers a week to settle in before Newsom sends over his first budget plan. Cutting the budget is never easy, but it's especially difficult in an election year when many legislators must then ask voters in November to reelect them.

The California Legislature is scheduled to convene Wednesday afternoon, giving lawmakers a week to settle in before Newsom sends over his first budget plan. Cutting the budget is never easy, but it&#8217;s especially difficult in an election year when many legislators must then ask voters in November to reelect them.

Plus, lawmakers will be following a pair of new leaders as they navigate their first budget negotiations, an arduous process that happens mostly behind closed doors and requires gaining consensus among the Democrats who control a majority of seats in the Legislature. Assembly Speaker Robert Rivas took over last summer, and incoming Senate President Pro Tempore Mike McGuire is scheduled to take over next month.

Plus, lawmakers will be following a pair of new leaders as they navigate their first budget negotiations, an arduous process that happens mostly behind closed doors and requires gaining consensus among the Democrats who control a majority of seats in the Legislature. Assembly Speaker Robert Rivas took over last summer, and incoming Senate President Pro Tempore Mike McGuire is scheduled to take over next month.

They will also guide debates on the use of generative artificial intelligence tools and attempts to rein in the fast-growing industry.

They will also guide debates on the use of generative artificial intelligence tools and attempts to rein in the fast-growing industry.

What Type of AI Regulation Is in the Works?

<h2 class="wp-block-heading" id="h-what-type-of-ai-regulation-is-in-the-works">What Type of AI Regulation Is in the Works?</h2>

Multiple lawmakers are preparing a host of bills to regulate the use of generative artificial intelligence tools—bills aimed at the potential impacts on privacy, discrimination, job protections and misinformation during an election year.

Multiple lawmakers are preparing a host of bills to regulate the use of generative artificial intelligence tools—bills aimed at the potential impacts on privacy, discrimination, job protections and misinformation during an election year.

Assemblymember Rebecca Bauer-Kahan has said she will introduce a bill to prohibit the use of AI systems that discriminate against people, which would have required companies to evaluate the algorithms they develop and disclose any potential discriminatory risks. She introduced a similar bill last year but couldn&#8217;t advance it.

Assemblymember Rebecca Bauer-Kahan has said she will introduce a bill to prohibit the use of AI systems that discriminate against people, which would have required companies to evaluate the algorithms they develop and disclose any potential discriminatory risks. She introduced a similar bill last year but couldn't advance it.

Assemblymember Rebecca Bauer-Kahan has said she will introduce a bill to prohibit the use of AI systems that discriminate against people, which would have required companies to evaluate the algorithms they develop and disclose any potential discriminatory risks. She introduced a similar bill last year but couldn&#8217;t advance it.

Assemblymember Ash Kalra wants to protect actors and artists by limiting studios&#8217; ability to replicate performers&#8217; work using AI, a sticking point in contract negotiations last year between actors and studios. The bill would allow performers to escape vague language in contracts that allow companies to use AI to create a digital version of themselves.

Assemblymember Ash Kalra wants to protect actors and artists by limiting studios' ability to replicate performers' work using AI, a sticking point in contract negotiations last year between actors and studios. The bill would allow performers to escape vague language in contracts that allow companies to use AI to create a digital version of themselves.

Assemblymember Ash Kalra wants to protect actors and artists by limiting studios&#8217; ability to replicate performers&#8217; work using AI, a sticking point in contract negotiations last year between actors and studios. The bill would allow performers to escape vague language in contracts that allow companies to use AI to create a digital version of themselves.

State Sen. Scott Wiener said he will try to establish a sweeping industry-wide safety framework. The San Francisco Democrat aims to focus on tackling some of the biggest risks in public safety and security, such as AI-generated bioweapons, cyberattacks and misinformation campaigns.

State Sen. Scott Wiener said he will try to establish a sweeping industry-wide safety framework. The San Francisco Democrat aims to focus on tackling some of the biggest risks in public safety and security, such as AI-generated bioweapons, cyberattacks and misinformation campaigns.

The bill, still light in details, will be &#8220;among the first attempts at broad regulation of AI,&#8221; Wiener said.

The bill, still light in details, will be "among the first attempts at broad regulation of AI," Wiener said.

The bill, still light in details, will be &#8220;among the first attempts at broad regulation of AI,&#8221; Wiener said.

Scott Wiener, California Senator, attends celebration at John's Grill downtown San Francisco on the occasion of the restaurant's 115th Anniversary. On Wednesday, October 4, 2023. Jana Ašenbrennerová for The Standard

<figure class="wp-block-image size-large"><img src="https://content.sfstandard.com/wp-content/uploads/2023/10/SFSongJohns_20231004_JA_USA_157393.jpg?w=2500" alt="A man with glasses and a beard looking thoughtful, wearing a suit and tie, blurred saxophonist in the background." class="wp-image-208315"/><figcaption class="wp-element-caption">State Sen. Scott Wiener plans to introduce a bill regulating artificial intelligence.</figcaption></figure>

<h2 class="wp-block-heading" id="h-fighting-over-election-rules">Fighting Over Election Rules</h2>

Beyond the budget and artificial intelligence, lawmakers are also expected to fight over rules governing their own elections.

Beyond the budget and artificial intelligence, lawmakers are also expected to fight over rules governing their own elections.

Republican Assemblymember Vince Fong is running to replace former U.S. House Speaker Kevin McCarthy in Congress. But he&#8217;s also on the ballot for reelection to his Fresno Assembly seat, creating a legal kerfuffle that has angered Democrats.

Republican Assemblymember Vince Fong is running to replace former U.S. House Speaker Kevin McCarthy in Congress. But he's also on the ballot for reelection to his Fresno Assembly seat, creating a legal kerfuffle that has angered Democrats.

Republican Assemblymember Vince Fong is running to replace former U.S. House Speaker Kevin McCarthy in Congress. But he&#8217;s also on the ballot for reelection to his Fresno Assembly seat, creating a legal kerfuffle that has angered Democrats.

Fong decided to run for Congress after he had already filed for the Assembly seat. California Secretary of State Shirley Weber at first refused to put Fong on the ballot for the Congressional seat, citing a state law that does not allow people to appear on the ballot twice. But Fong sued, and a state judge ruled in his favor. Weber has said she will appeal the ruling.

Fong decided to run for Congress after he had already filed for the Assembly seat. California Secretary of State Shirley Weber at first refused to put Fong on the ballot for the Congressional seat, citing a state law that does not allow people to appear on the ballot twice. But Fong sued, and a state judge ruled in his favor. Weber has said she will appeal the ruling.

Assemblymember Wendy Carrillo—who is not running for reelection because she is seeking a seat on the Los Angeles City Council—has vowed to introduce legislation she says &#8220;will clear up this mess.&#8221;

Assemblymember Wendy Carrillo—who is not running for reelection because she is seeking a seat on the Los Angeles City Council—has vowed to introduce legislation she says "will clear up this mess."

Assemblymember Wendy Carrillo—who is not running for reelection because she is seeking a seat on the Los Angeles City Council—has vowed to introduce legislation she says &#8220;will clear up this mess.&#8221;

&#8220;Under no circumstances should candidates be able to run for two offices at the same time,&#8221; she said.

"Under no circumstances should candidates be able to run for two offices at the same time," she said.

&#8220;Under no circumstances should candidates be able to run for two offices at the same time,&#8221; she said.

The legislative session runs through the end of August, but lawmakers only have until the end of January to decide which of the bills introduced last year, if any, they will attempt to pass this year.

The legislative session runs through the end of August, but lawmakers only have until the end of January to decide which of the bills introduced last year, if any, they will attempt to pass this year.

Among the leftover bills is a proposal by Democratic Sens. Catherine Blakespear and Nancy Skinner to require gun owners to carry liability insurance to cover the negligent or accidental use of their firearms. The bill, introduced in 2022, faced fierce opposition from firearms groups last year who said such requirements violate gun owners&#8217; constitutional rights.

Among the leftover bills is a proposal by Democratic Sens. Catherine Blakespear and Nancy Skinner to require gun owners to carry liability insurance to cover the negligent or accidental use of their firearms. The bill, introduced in 2022, faced fierce opposition from firearms groups last year who said such requirements violate gun owners' constitutional rights.

Among the leftover bills is a proposal by Democratic Sens. Catherine Blakespear and Nancy Skinner to require gun owners to carry liability insurance to cover the negligent or accidental use of their firearms. The bill, introduced in 2022, faced fierce opposition from firearms groups last year who said such requirements violate gun owners&#8217; constitutional rights.

Other bills include a proposal to require community colleges and California State University campuses to establish a mental health hotline, a measure to subsidize housing for seniors and adults with disabilities, and a plan to ban homeless encampments within 1,000 feet of a school, park, or library, among others.

Other bills include a proposal to require community colleges and California State University campuses to establish a mental health hotline, a measure to subsidize housing for seniors and adults with disabilities, and a plan to ban homeless encampments within 1,000 feet of a school, park, or library, among others.

$68B California deficit, AI regulation top agenda as lawmakers return to Sacramento

Liz Lindqwister

Layoffs continue to batter the Bay Area, as two San Francisco-based companies announced plans to cut hundreds of workers on Thursday—with one blaming the cuts on artificial intelligence.

Layoffs continue to batter the Bay Area, as two San Francisco-based companies announced plans to cut hundreds of workers on Thursday—with one blaming the cuts on artificial intelligence.

Dropbox, a cloud storage company based in San Francisco, <a href="https://blog.dropbox.com/topics/company/a-message-from-drew" target="_blank" rel="noreferrer noopener">will lay off roughly 500 employees</a>, or 16% of its workforce, according to a company memo. Founder and CEO Drew Houston said Dropbox&#8217;s restructuring was spurred on by worsening economic conditions and major technological developments.

Dropbox, a cloud storage company based in San Francisco, <a href="https://blog.dropbox.com/topics/company/a-message-from-drew" target="_blank" rel="noreferrer noopener">will lay off roughly 500 employees</a>, or 16% of its workforce, according to a company memo. Founder and CEO Drew Houston said Dropbox's restructuring was spurred on by worsening economic conditions and major technological developments.

Dropbox, a cloud storage company based in San Francisco, <a href="https://blog.dropbox.com/topics/company/a-message-from-drew" target="_blank" rel="noreferrer noopener">will lay off roughly 500 employees</a>, or 16% of its workforce, according to a company memo. Founder and CEO Drew Houston said Dropbox&#8217;s restructuring was spurred on by worsening economic conditions and major technological developments.

In other words, artificial intelligence might just be taking your job.

In other words, artificial intelligence might just be taking your job.

&#8220;Our next stage of growth requires a different mix of skill sets, particularly in AI and early-stage product development,” Houston said. “We’ve believed for many years that AI will give us new superpowers and completely transform knowledge work.&#8221;

"Our next stage of growth requires a different mix of skill sets, particularly in AI and early-stage product development,” Houston said. “We’ve believed for many years that AI will give us new superpowers and completely transform knowledge work."

&#8220;Our next stage of growth requires a different mix of skill sets, particularly in AI and early-stage product development,” Houston said. “We’ve believed for many years that AI will give us new superpowers and completely transform knowledge work.&#8221;

OpenAI logo displayed on a phone screen and ChatGPT website displayed on a laptop screen are seen in this illustration photo taken in Krakow, Poland on December 5, 2022. (Photo by Jakub Porzycki/NurPhoto via Getty Images)

<figure class="wp-block-image size-large"><img src="https://content.sfstandard.com/wp-content/uploads/2022/12/GettyImages-1245391800-2500x1565.jpg" alt="" class="wp-image-101399"/><figcaption class="wp-element-caption">OpenAI logo is displayed on a phone screen and ChatGPT website displayed on a laptop screen. | Jakub Porzycki/NurPhoto via Getty Images</figcaption></figure>

Houston indicated affected employees may be shifted onto other teams, but noted that the company&#8217;s future growth would hinge on Dropbox&#8217;s ability to leverage AI products. It is unclear whether Dropbox will be hiring workers focusing on AI in the future.

Houston indicated affected employees may be shifted onto other teams, but noted that the company's future growth would hinge on Dropbox's ability to leverage AI products. It is unclear whether Dropbox will be hiring workers focusing on AI in the future.

Houston indicated affected employees may be shifted onto other teams, but noted that the company&#8217;s future growth would hinge on Dropbox&#8217;s ability to leverage AI products. It is unclear whether Dropbox will be hiring workers focusing on AI in the future.

&#8220;The opportunity in front of us is greater than ever, but so is our need to act with urgency to seize it,&#8221; Houston said. &#8220;Over the last few months, AI has captured the world’s collective imagination, expanding the potential market for our next generation of AI-powered products more rapidly than any of us could have anticipated.&#8221;

"The opportunity in front of us is greater than ever, but so is our need to act with urgency to seize it," Houston said. "Over the last few months, AI has captured the world’s collective imagination, expanding the potential market for our next generation of AI-powered products more rapidly than any of us could have anticipated."

&#8220;The opportunity in front of us is greater than ever, but so is our need to act with urgency to seize it,&#8221; Houston said. &#8220;Over the last few months, AI has captured the world’s collective imagination, expanding the potential market for our next generation of AI-powered products more rapidly than any of us could have anticipated.&#8221;

AI-based <a href="https://sfstandard.com/business/san-franciscos-next-gold-rush-is-already-here-and-youve-been-using-it-for-years/" target="_blank" rel="noreferrer noopener">generative technologies are booming</a> in the Bay Area investing scene, largely driven by the growing popularity of image generators like DALL-E and language models like ChatGPT.

AI-based <a href="https://sfstandard.com/business/san-franciscos-next-gold-rush-is-already-here-and-youve-been-using-it-for-years/" target="_blank" rel="noreferrer noopener">generative technologies are booming</a> in the Bay Area investing scene, largely driven by the growing popularity of image generators like DALL-E and language models like ChatGPT.

Data from venture firm NFX shows that San Francisco is the financial powerhouse of the AI craze, both drawing workers to the fledgling industry and <a href="https://www.nytimes.com/2023/03/28/business/economy/jobs-ai-artificial-intelligence-chatgpt.html" target="_blank" rel="noreferrer noopener">transforming how tech companies approach</a> knowledge work and restructuring.

Data from venture firm NFX shows that San Francisco is the financial powerhouse of the AI craze, both drawing workers to the fledgling industry and <a href="https://www.nytimes.com/2023/03/28/business/economy/jobs-ai-artificial-intelligence-chatgpt.html" target="_blank" rel="noreferrer noopener">transforming how tech companies approach</a> knowledge work and restructuring.

An empty office space in downtown San Francisco. 

<figure class="wp-block-image size-full"><img src="https://content.sfstandard.com/wp-content/uploads/2023/02/FEATURED_WFHData021723.jpg" alt="" class="wp-image-128248"/><figcaption class="wp-element-caption">Empty office space is seen in Downtown San Francisco. | Camille Cohen/The Standard</figcaption></figure>

<h2 class="wp-block-heading" id="h-the-steady-march-of-layoffs-continues">The Steady March of Layoffs Continues</h2>

<h2 id="h-the-steady-march-of-layoffs-continues">The Steady March of Layoffs Continues</h2>

Clothing retailer <a href="https://sfstandard.com/arts-culture/the-gap-one-of-san-franciscos-most-iconic-businesses-has-come-undone/">The Gap Inc.</a>—also based in San Francisco—will also <a href="https://www.sec.gov/ix?doc=/Archives/edgar/data/0000039911/000003991123000026/gps-20230425.htm" target="_blank" rel="noreferrer noopener">cut roughly 1,800 workers</a> in a major restructuring effort designed to slash costs and streamline decision-making processes.

Clothing retailer <a href="https://sfstandard.com/arts-culture/the-gap-one-of-san-franciscos-most-iconic-businesses-has-come-undone/">The Gap Inc.</a>—also based in San Francisco—will also <a href="https://www.sec.gov/ix?doc=/Archives/edgar/data/0000039911/000003991123000026/gps-20230425.htm" target="_blank" rel="noreferrer noopener">cut roughly 1,800 workers</a> in a major restructuring effort designed to slash costs and streamline decision-making processes.

Gap&#8217;s layoffs will primarily affect workers based in San Francisco, as well as the company&#8217;s &#8220;upper field workforce,&#8221; according to a regulatory filing submitted earlier this week.

Gap's layoffs will primarily affect workers based in San Francisco, as well as the company's "upper field workforce," according to a regulatory filing submitted earlier this week.

Gap&#8217;s layoffs will primarily affect workers based in San Francisco, as well as the company&#8217;s &#8220;upper field workforce,&#8221; according to a regulatory filing submitted earlier this week.

These announcements mark the second round of layoffs both Dropbox and The Gap have carried out since the pandemic started. Dropbox last laid off 11% of its workforce in 2021, while The Gap let go of 500 employees in September last year.

These announcements mark the second round of layoffs both Dropbox and The Gap have carried out since the pandemic started. Dropbox last laid off 11% of its workforce in 2021, while The Gap let go of 500 employees in September last year.

&#8220;The company announced it planned to take actions to further simplify and optimize its operating model and structure, including actions such as increasing spans of control and decreasing management layers to improve quality and speed of decision making,&#8221; Gap spokespeople wrote in a regulatory filing.

"The company announced it planned to take actions to further simplify and optimize its operating model and structure, including actions such as increasing spans of control and decreasing management layers to improve quality and speed of decision making," Gap spokespeople wrote in a regulatory filing.

&#8220;The company announced it planned to take actions to further simplify and optimize its operating model and structure, including actions such as increasing spans of control and decreasing management layers to improve quality and speed of decision making,&#8221; Gap spokespeople wrote in a regulatory filing.

A pile of boxes in front of Gap located at 2159 Chestnut Street in San Francisco, Calif., on Sunday, Sept. 25, 2022. The Gap, one of San Francisco’s most iconic brands, has come undone after CEO, Kayne West terminates their partnership and killing 500 jobs. | Samantha Laurey for The Standard

<figure class="wp-block-image size-large"><img src="https://content.sfstandard.com/wp-content/uploads/2022/10/GapRiseandFall092022_INLINED08-1-2500x1667.jpg" alt="" class="wp-image-82949"/><figcaption class="wp-element-caption">Boxes are piled up in front of Gap located at 2159 Chestnut St. in San Francisco on Sept. 25, 2022. | Samantha Laurey for The Standard</figcaption></figure>

READ MORE: <a href="https://sfstandard.com/arts-culture/the-gap-one-of-san-franciscos-most-iconic-businesses-has-come-undone/">The Gap, One of San Francisco’s Most Iconic Businesses, Has Come Undone</a>

READ MORE: <a href="https://sfstandard.com/arts-culture/the-gap-one-of-san-franciscos-most-iconic-businesses-has-come-undone/">The Gap, One of San Francisco’s Most Iconic Businesses, Has Come Undone</a>

Other local companies have announced sweeping layoffs.

Other local companies have announced sweeping layoffs.

San Francisco <a href="https://sfstandard.com/business/lyft-layoffs-staff-significantly-slashed-by-new-ceo-david-risher/">rideshare company Lyft</a> announced it would &#8220;significantly reduce&#8221; the size of its team through layoffs, according to a Friday blog post from new CEO David Risher. Some <a href="https://sfstandard.com/technology/tech-giant-layoffs-apple-silicon-valley/" target="_blank" rel="noreferrer noopener">tech companies that previously dodged layoffs</a> have now implemented cost-cutting measures including headcount reductions.

San Francisco <a href="https://sfstandard.com/business/lyft-layoffs-staff-significantly-slashed-by-new-ceo-david-risher/">rideshare company Lyft</a> announced it would "significantly reduce" the size of its team through layoffs, according to a Friday blog post from new CEO David Risher. Some <a href="https://sfstandard.com/technology/tech-giant-layoffs-apple-silicon-valley/" target="_blank" rel="noreferrer noopener">tech companies that previously dodged layoffs</a> have now implemented cost-cutting measures including headcount reductions.

San Francisco <a href="https://sfstandard.com/business/lyft-layoffs-staff-significantly-slashed-by-new-ceo-david-risher/">rideshare company Lyft</a> announced it would &#8220;significantly reduce&#8221; the size of its team through layoffs, according to a Friday blog post from new CEO David Risher. Some <a href="https://sfstandard.com/technology/tech-giant-layoffs-apple-silicon-valley/" target="_blank" rel="noreferrer noopener">tech companies that previously dodged layoffs</a> have now implemented cost-cutting measures including headcount reductions.

Even as AI booms, San Francisco is still losing jobs

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Even as AI booms, San Francisco is still losing jobs

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