4 days ago
Hundreds of Layoffs Hit Silicon Valley
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources.
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Silicon Valley is facing another wave of job losses, as several leading tech companies have announced hundreds of layoffs across the Bay Area, according to recent state filings.
The companies involved include LinkedIn, Chegg, and Hewlett Packard Enterprise (HP), which collectively informed the California Employment Development Department (EDD) in May of their plans to eliminate over 400 positions, according to Worker Adjustment and Retraining Notification (WARN) notices.
Newsweek reached out to the companies announcing layoffs via email for comment.
Why It Matters
The latest reductions add to a growing tally of technology job cuts in California this year, signaling persistent workforce instability in a region long seen as the nation's technology powerhouse. The surge in layoffs comes as Silicon Valley's tech sector grapples with shifting business strategies and an accelerating push toward artificial intelligence.
What To Know
According to official WARN notices, LinkedIn has eliminated over 280 roles in May, including 159 employees from its Mountain View office alone. Educational tech firm Chegg laid off 88 employees in Santa Clara on the same date, May 15. Two weeks earlier, HP implemented 61 job cuts in San Jose.
All three companies described the layoffs as permanent in their WARN notices to the California EDD.
Reasons were not given alongside the notices, though the companies have in the past defended the need for restructuring to cut costs and improve efficiencies in an increasingly uncertain macroeconomic climate.
A LinkedIn office in San Francisco, California, as seen on July 26, 2023.
A LinkedIn office in San Francisco, California, as seen on July 26, releasing its first-quarter earnings in May, which revealed a 30 percent year-over-year drop in revenue, Chegg announced that it would cut its headcount by around 22 percent as the company takes "proactive measures to align costs with our business outlook."
In its announcement, Chegg also noted the increased adoption of AI by students over traditional education tools.
"Language model companies are turning to academia for validation, with OpenAI recently giving college students free access to Chat GPT Plus, and Anthropic launching a free education offering," the company said. Chegg added that it plans to close its physical offices in the U.S. and Canada by the end of 2025.
In a filing with the Securities and Exchange Commission (SEC) earlier this week, HP stated that it expects to implement "gross workforce reductions of approximately 1,000 to 2,000 employees" this year, in addition to the 7,000 cuts outlined in its Fiscal 2023 Plan.
CFO Karen Parkhill said in a February earnings call that the "incremental structural savings" HP was pursuing would "continue to be a key lever to help offset macro and geopolitical uncertainties while also continuing to fuel investment in our key growth areas and AI innovation."
2025 Layoff Trends and Context
The Bay Area layoffs extend beyond these three companies. Technology firms in California announced 17,874 layoffs in the first quarter of the year, according to the Los Angeles Times, including staff cuts at Meta and Google.
In May, Microsoft announced nearly 100 layoffs in California, according to WARN notices. This comes amid the company's broader plan to trim its workforce by approximately 3 percent, affecting roughly 6,000 employees. The layoffs announced in May are expected to take effect in July.
What People Are Saying
A spokesperson for Microsoft, in a statement given to CNBC: "We continue to implement organizational changes necessary to best position the company for success in a dynamic marketplace."
Clair Brown, Professor of Economics at UC Berkeley, told Newsweek that California's labor market for recent college graduates was weakening "for a variety of reasons," including the effects of reduced imports from Asia, as well as "the increasing use of AI by employers especially in coding, in marketing, in draft analysis of data, and even routine tasks such as customer inquiries."
"The chaos presented by changing economic policies with tariffs is also causing employers to replace job vacancies slowly or not at all," she said, adding: "Over time, I worry that the labor market for early stage professional workers, such as my UCB students, will face declining jobs opportunities as the use of AI becomes widespread."
Chegg CEO and President Nathan Schultz said on May 12: "We believe the trends impacting our business will worsen before they get better. We are taking steps to further align costs with our outlook, including an additional restructuring of our business."
What Happens Next
Despite this trend, the California labor market remains steady. According to the state's latest EDD report, California added 17,700 jobs in April, following 6,800 job losses in March.
