The tech industry of California, which has been a dominant force of the state’s economy and innovation for many years, entered the phase of a significant change as the key market players announced the mass dismissals and restructuring of their companies.

The wave of job cuts that swept through tens of thousands of employees in Silicon Valley and beyond is quite a reversal from the industry’s growth spurt of recent years and has drawn attention to the sustainability of the Golden State’s reign as the tech capital of the world.

The lay offs have targeted both the traditional big firms and the new generation firms that had the potential of becoming big firms in the near future. In its quarterly report, Meta, which owns Facebook, disclosed plans of laying off 10,000 more employees after it laid off 11,000 workers earlier.

Alphabet, Google’s parent company, has also recently undergone a reduction of its employees through laying off 12,000 workers. Even smaller, rapidly growing startups such as Stripe and Airbnb are not spared, as the two firms have recently released that they are laying off their employees.

According to the industry experts, there are various reasons that made the situation as it is at the present time. The pandemic that hit the world in 2020, the subsequent economic decline, increasing interest rates, and fears for a recession affected many organizations, making them more frugal. Also, some believe that the tech industry’s hiring spree during the pandemic-driven surge in the demand for digital services was unrealistic, and what is happening now is the correction.

These job losses are not limited to the employees and businesses only but also to other sectors. The impact is already being felt in California whose economy depends much on firms in the technology sector.

The recent layoffs could cost hundreds of millions of dollars in lost taxes in the state, according to state officials. More traditional stores, especially in the tech cities such as San Francisco and San Jose that have depended on relatively well paid tech workers, have also commented on the declining sales.