Tech Layoffs During the Pandemic
The pandemic has hit the job market hard, with many industries experiencing layoffs and downsizing. The tech industry was not immune to this either, and many of the biggest players in the field announced job cuts.
Meta, the parent company of Facebook, announced plans to lay off 871 workers in New York, while Twitter has also cut down on hundreds of jobs. In addition, Amazon laid off 10,000 workers across the country, although it's not clear how many of these were in New York. The unemployment rate in the city rose to 5.9% in October 2022, indicating a challenging time for tech workers in the city.
Although the city has since regained 84% of the jobs lost during the pandemic, it is still struggling to recover from the historic event.
The Shift to Remote Work
The rise of remote work has caused significant shifts in the commercial real estate market, particularly in urban areas such as New York City. According to a report by global real estate firm Cushman & Wakefield, up to 330 million square feet of US office space could become vacant and unused by 2030. This, added to another 740 million square feet of space that will become vacant from "natural" causes, means that around 1 billion square feet of unused office space will be built up over the next seven years.
The consequences of such a bust would be huge, as office tower building managers and landlords struggle to make up for lost revenue, and city governments lose out on taxes from commercial properties. Additionally, the volatility in the real estate sector may have a spillover effect on other industries, creating further job losses and economic uncertainty.
Big Tech’s Expansion Plans
Despite the fallout from the pandemic, Big Tech companies such as Amazon, Google, Facebook, and Apple have been expanding their presence in New York City. These companies are not only taking up significant amounts of office space, but they are also creating jobs and contributing to the local economy. For example, Amazon has plans to open a new 335,000-square-foot office in Manhattan, which will create 2,000 new jobs. Similarly, Facebook and Google have both announced plans to expand their New York City footprint in the coming years, with Facebook committing to leasing 730,000 square feet of office space in Midtown Manhattan.
The companies have enough new office space to hire another 15,000 employees, but when those workers will arrive at the new offices remains uncertain. All four companies have allowed their employees to work remotely, and some, including Facebook, foresee a future in which up to half its employees work from home. However, the executives at the companies said their investments, even during one of the city's darkest periods, reflect their belief that NYC will keep luring people after the pandemic.
Furthermore, the companies are also wagering that current and future employees will be eager to return to shared workplaces that promote spontaneity and collaboration. Google, for example, is on target to employ 14,000 people in the city in the coming years, fulfilling a 2018 pledge to double its New York City workforce. The company has put together a sizable corporate campus in and around the Chelsea neighbourhood in Manhattan, including several properties that are under construction.
What Makes NYC’s Tech Hub Unique?
New York City has been growing as a tech hub in recent years. It saw an increase in jobs by 33.6% to 369,000 in the past five years, making it the fastest-growing sector. The city currently boasts more than 10,340 tech firms, with a sector that contributed $247 billion to the economy in 2022.
NYC is carving out its own identity as a unique tech hub, thanks to strengths that differentiate it from other cities. As more and more tech firms flock to the city, the sector is expected to continue its growth trajectory. The city's unique strengths, including its diverse talent pool, its status as a global business and financial centre, and its vibrant cultural scene make it an attractive destination for tech firms of all sizes.