In recent news, South San Francisco-based Twist Bioscience, a leading bioscience company specializing in the manufacture of synthetic DNA, has laid off around 25% of its workforce. This significant workforce reduction, affecting approximately 270 employees, was announced during a recent quarterly earnings call. It has been identified as a cost-cutting measure as the company endeavors to become profitable, despite reporting an increase in revenue.
Most of the layoffs involve employees from the Bay Area, including some remote workers. The company, however, did not comment on whether the staff reductions would impact their current real estate holdings.
Twist Bioscience started in Mission Bay, San Francisco, and moved operations to South San Francisco in 2016. As of this year, they maintain around 494 employees in the Bay Area and also operate a manufacturing facility in Wilsonville, Oregon.
Interestingly, the biotech sector has shown resilience in the current economic climate. Last year, San Francisco Mayor London Breed expressed intentions to attract more biotech companies to the city. However, tech companies have garnered significant media attention recently due to large-scale layoffs and the subsequent release of valuable downtown office space.
Meta is currently in the process of workforce reduction and has put nearly half a million square feet of office space on the market. Other well-known companies like Salesforce, Dropbox, and Lyft have also recently announced layoffs.
In addition to tech companies, other legacy Bay Area companies such as Gap, RH, and Oakland’s Clorox have also experienced layoffs this year and have put office space on the market.
The Bigger Picture
The recent workforce reduction at Twist Bioscience and other prominent companies in the Bay Area highlights a broader trend in the current economic climate. As companies strive to adapt and stay competitive, several factors contribute to these changes, which may have lasting implications for employees, local economies, and industry landscapes.
- Cost-cutting measures: The main reason behind Twist Bioscience's layoffs is the company's drive to become profitable. Many businesses are trying to streamline their operations by minimizing costs, consolidating resources, and improving efficiency. In some cases, this involves reevaluating personnel needs and making tough decisions regarding workforce reductions.
- Remote work and office space: The pandemic has accelerated the adoption of remote work arrangements, with many companies realizing the cost-saving benefits of a distributed workforce. As a result, the demand for office space has decreased, leading to an increase in available downtown office space. Companies like Meta, Salesforce, Dropbox, and Lyft, which have announced layoffs, are also reevaluating their real estate holdings.
- Shifts in industry focus: The resilience of the biotech sector, as demonstrated by San Francisco Mayor London Breed's intention to attract more biotech firms to the city, indicates a possible shift in industry focus. While the tech industry has been the driving force behind the Bay Area's growth, there is a growing interest in other sectors that demonstrate potential for innovation and economic development. Diversifying the region's economy can help create a more stable and sustainable growth trajectory.
- Talent mobility: As companies downsize, the pool of available talent in the market increases. This can create new opportunities for startups and other businesses to capitalize on the skills and experience of professionals who have been affected by layoffs. Talent mobility can lead to the formation of new companies, industry innovation, and the potential for economic growth.
- Economic ripple effect: Layoffs and workforce reductions in large companies can have a significant impact on local economies. As businesses consolidate and release valuable office space, this can affect the commercial real estate market, local retailers, and service providers that rely on these companies for business. Moreover, as employees lose their jobs, consumer spending can be negatively impacted, leading to potential economic downturns.
In conclusion, the recent layoffs in Twist Bioscience and other companies in the Bay Area reflect broader trends in the current economic landscape. These events underscore the importance of understanding the interconnectedness of various industries, the need for companies to adapt to changing market conditions, and the potential consequences of these trends on employees and local economies.