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May 23, 2023

San Francisco’s Tech Exodus: A City’s Demise

Layoffs and closures of tech companies render San Francisco a “ghost town”

San Francisco's downtown area has been hit hard by the combined impact of layoffs and work-from-home policies implemented by major tech companies. Residents struggle with homelessness and budget deficits, with an estimated 20,000 homeless individuals and a $300 million yearly deficit. The world’s tech capital faces multiple challenges simultaneously. Huge tech companies, the city’s top employers, have laid off thousands of employees in recent years. Although AI startups in Silicon Valley thrive, downtown has reportedly been called a “ghost town”. San Francisco’s population decreased by over 50,000 during the pandemic, leading to a drop in home prices, yet the city remains one of the most expensive places to live in the United States.

City Councilor Ahsha Safai holds tech companies partly responsible for the city's problems. While prime office locations are abundant, with substantial tax breaks, COVID-19 helped corporations create virtual offices, encouraging remote work. Safai stated, “We have a phenomenal bay. We have a wonderful Mediterranean climate. We have well-trained staff,” says Safai. “But what good is a city if everyone works from home?”.

Salesforce, the city's largest private employer, has also been affected by the economic slowdown. The company laid off 10 percent of its 70,000 employees, resulting in the closure of several smaller offices and the relinquishment of six floors in the iconic Salesforce Tower. Other major tech players like Reddit, Snap, Pinterest, Airbnb, Meta, Slack, Lyft, and Paypal have also closed their San Francisco offices, heavily impacting the local economy. Workers spent approximately $3500 annually on recreation, but the decreased footfall has led to the closure of restaurants, cinemas, and cafes.

With Twitter threatening to leave, the cleaners, who were laid off overnight, struggle to find employment. Councillor Safai says, “It is unbearable that the richest man in the world would do such a thing”. Not to mention Urban Alchemy, a neighbourhood watch organization, hired to keep an eye out for hoards of fentanyl addicts.

San Francisco finds itself at a critical juncture, grappling with challenges that demand innovative solutions. The tax breaks that the city offered tech players seem to be of no use. The tech industry's arrival in the digital world has left downtown San Francisco in shambles.

Kriti Swarup
Kriti Swarup
Content Writer at TechNews180
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