SAN JOSE — Silicon Valley’s job boom has hit a pause, and while the region is still adding workers, the pace of hiring in 2023 was markedly slower than what was the case the year before, a new report shows.
While hiring is slowing, median household income is on the rise, according to the new Silicon Valley Index 2024, a closely watched report that was released on Monday.
Despite the cross-currents, Silicon Valley’s economy remains relatively healthy, according to the new assessment from Joint Venture Silicon Valley, which released the new report on the region’s economic mosaic.
“This is still a growing economy,” said Russell Hancock, president of Joint Venture Silicon Valley, a San Jose-based think tank.
The upswings are occurring despite what has now become a dreary drumbeat of tech industry job cuts and retreats from the amount of office space they occupy.
Hiring has shifted into low gear in Silicon Valley, according to the Index 2024 report. The index defines Silicon Valley as Santa Clara County, San Mateo County, the southern Alameda County region that includes Fremont and a section of Santa Cruz County.
Over the one-year period that ended in June 2023, Silicon Valley added about 2,700 jobs, the Silicon Valley Index 2024 report determined. That’s a sharp slowdown from the 88,000 jobs the region added during the one-year period that ended in June 2022.
Much of this is occurring due to the cutbacks and retrenchment in the region’s tech industry.
“The pandemic was a bonanza for the tech industry, which did some over-hiring,” Hancock said. “Our largest tech employers did some re-calibrating. There was some overhiring. Tech companies have been doing some right-sizing.”
Despite the slowdown in employment growth, household income is showing some improvement in Silicon Valley, according to the report.
In 2022, the most recent year for which statistics are available, median household income was $149,588 in Silicon Valley. That was higher than the 2021 level for the income benchmark, but below the 2020 level, the 2024 Index report determined.
The tech sector now embraces what Hancock describes as its latest “fad” as the industry seeks to rein in costs and keep Wall Street placated.
“Silicon Valley goes through what I call fads,” Hancock said. “The current fad is efficiency. The move towards efficiency is working. Tech companies are running lean and mean.”