The Bay Area tech industry is shedding tens of thousands of workers while simultaneously paying individual engineers nine-figure compensation packages — a split that labor data suggests is widening by the month.
The Scale of Layoffs
Since Jan. 1, 2026, the technology sector has recorded 247 rounds of mass layoffs affecting 95,278 workers, according to the TrueUp tracker — an average of 882 per day, up from 674 per day in 2025.
Oracle leads the year in cuts. The BBC reported the company eliminated at least 10,000 of its 162,000 employees, with dozens of affected workers posting nearly identical termination language on LinkedIn: “we have made the decision to eliminate your position as part of a broader organizational restructuring,” Business Insider reported March 31. Analysts estimate Oracle’s total cuts could reach 30,000 by year-end.
Amazon laid off 16,000 corporate employees in January, following 14,000 cuts in October 2025 — nearly 30,000 in six months, the largest workforce reduction in the company’s history. Dell Technologies cut 11,000 positions, representing 10% of its staff. Block eliminated 4,000 employees, or 40% of its workforce. Atlassian cut 1,600 and Snap 1,000. Meta opened the year with 1,500 layoffs at Reality Labs and conducted a second round of 700 on March 25, targeting Reality Labs, social media teams, and recruiting, according to The New York Times.
In the Bay Area, the cuts were geographically precise. WARN Act notices Amazon filed with the California Employment Development Department, as reported by the SF Chronicle, cover 769 positions: 666 in Santa Clara County and 103 in San Francisco, with a termination date of April 28. Meta filed separate notices for 102 positions in Menlo Park and Sunnyvale, plus 270 in Burlingame and Playa Vista, all dated March 20. Western Digital cut 47 workers in San Jose; Genentech eliminated 141 in South San Francisco.
Bay Area employment fell 0.4%, or 15,300 jobs, in 2025, with losses concentrated in the information and professional services sectors, according to the Public Policy Institute of California.
Why Companies Are Cutting
Meta, Atlassian, Dell, Pinterest, and Block all cited the shift to artificial intelligence when announcing layoffs. But the underlying driver is capital spending.
Amazon, Meta, Google, and Microsoft are collectively investing hundreds of billions of dollars annually in AI infrastructure, according to the companies’ own guidance. Citadel Securities estimates total U.S. AI capital expenditure at approximately $650 billion — roughly 2% of GDP. To fund data centers and chips at that scale, companies are cutting the largest controllable line item on their balance sheets: payroll.
AI is also restructuring the work itself. Between 25% and 75% of code at some engineering teams is now written with AI tools, according to public communications from OpenAI and Anthropic. That hasn’t translated into proportional engineer headcount reductions, but it has changed hiring patterns — companies are taking on fewer people for routine tasks and demanding higher output from those who remain.
Meta Chief Technical Officer Andrew Bosworth made the calculus explicit at an internal all-hands meeting, a recording of which was obtained by The Verge. “We have a small number of leadership roles that we’re hiring and those people really do get a premium,” he said.
The Race for AI Talent
Meta’s Superintelligence Labs, launched in 2025, has been acquiring AI researchers at prices that have reset market expectations. Ruoming Pang, Apple’s former head of foundation model development, received a compensation package valued at $200 million over several years to join Meta — more than Apple pays any employee except Tim Cook, according to Bloomberg. Wired reported packages reaching $300 million over four years, with first-year compensation exceeding $100 million. OpenAI CEO Sam Altman confirmed on the Uncapped podcast that Meta had extended offers with “$100 million signing bonuses” to key researchers. Meta also invested $14.3 billion in Scale AI, gaining its CEO Alexandr Wang as co-head of Superintelligence Labs alongside former GitHub CEO Nat Friedman.
OpenAI responded by raising compensation for existing staff. The company’s total stock-based compensation in 2024 reached $4.4 billion — exceeding its revenue for the same period, according to The Information.
Current Levels.fyi data for April 2026 shows a new compensation ceiling. The median total package for a software engineer at OpenAI in the Bay Area is $605,000 annually; the highest recorded figure is $1.24 million at the L6 level. At Anthropic, the median is $575,000 with a ceiling of $890,000. Research scientists at Meta earn between $305,000 and $581,000 in base pay, with a median around $400,000 — before stock awards that can double or triple the total package.
Where the Hiring Is
OpenAI plans to grow from 4,500 to 8,000 employees by the end of 2026, according to Financial Times sources, which also reported the company has taken new office space in San Francisco, bringing its total footprint in the city above one million square feet. New roles are concentrated in product development, engineering, research, and sales. CEO of the applications division Fidji Simo told employees in a meeting cited by The Wall Street Journal that OpenAI is “actively looking at what areas to deprioritize” to focus on enterprise and coding products.
The urgency is partly competitive. Anthropic now captures 73% of spending by business customers purchasing AI tools for the first time, according to payment platform Ramp — a segment OpenAI held a year ago. Anthropic has also been hiring aggressively, opening hundreds of positions in San Francisco, Seattle, and Dublin, where the company announced plans to create 200 jobs by 2027.
Demand for AI engineering roles is growing faster than any other tech category. Bay Area positions account for 32% of all AI engineer job postings in the United States, according to TrueUp. The machine learning engineer role grew 41.8% year over year in 2025 — the fastest growth of any engineering title. Tech roles make up 11.6% of all Bay Area employment, more than double the national figure of 5.6%, according to CBRE.
Entry-Level Has Collapsed
At the other end of the market, entry-level hiring has sharply contracted. New graduate hiring at the 15 largest tech companies has fallen more than 50% compared with 2019, according to a report by venture firm SignalFire. In 2024, entry-level tech hiring fell another 25% year over year.
Internship applications have surged: tech internship postings this season attracted 2.5 times as many applicants as in recent years, and data science and software engineering roles drew six times the typical volume, according to Glassdoor. Daniel Kao, who manages Glassdoor’s internal internship program, said recent graduates who have not found permanent work are now competing directly with current students for summer internship slots.
“I don’t think college guarantees anything at all,” Billy Meneses, a 21-year-old Stanford student, told SF Standard. “Even in a place like Stanford, it’s easier, but it’s still hard if you don’t have real technical skills.”
California’s Broader Picture
California’s unemployment rate stood at 5.4% in January 2026, falling for the third consecutive month, according to the California Employment Development Department, compared with 4.3% nationally. The state added 93,500 jobs in January, but gains were concentrated in healthcare and education. Tech contributed little to that growth.
UCLA Anderson Forecast projects California unemployment will peak at 6.2% in early 2026, averaging 5.9% for the year, with recovery beginning toward the end of 2026 and accelerating into 2027 — contingent on renewed growth in tech, durable goods manufacturing, and construction.