The tech capital of America is showing cracks
Their code is broken.
Silicon Valley has hit a rough patch. Data released Wednesday by job site Glassdoor finds that software-related job growth in the San Jose area has fallen 7.7 percentage points in the past five years. And the tech industry overall in the area isn’t doing so hot either: Annual tech job growth in 2016 was just 3.5% overall, significantly less than the 6% growth in 2015 or the 6.4% in 2014.
Meanwhile Seattle –thanks in part to Amazon — is having its moment. Software job postings are up 6.7 percentage points in the area, Glassdoor reveals. And overall tech job growth is booming, up 12% over the past two years, which led Forbes to put the city as the best city for tech jobs. Washington D.C., Denver, Raleigh and other spots are also seeing software job growth.
So why has the Silicon Valley job market hit a rough patch? There are several big reasons, Andrew Chamberlain, Glassdoor’s chief economist, tells Moneyish. The first is the cost of living in the area, he explains, as many people who work in the tech industry don’t want to pay for the high cost of renting or buying an apartment there.
They’re people like Milford, CT-resident Mark Lassoff, an education tech entrepreneur, who was recruited by Google two years ago. “Working for Google was the dream,” he says. But after the second interview, he withdrew himself from consideration. The reason? “Money,” he says, noting that in Milford he lives in “a beautiful $200,000 condo,” keeps a small boat in the nearby marina and has money for hobbies, travel and savings. “Even if Google had made a most generous offer, I’d still take a step down in lifestyle,” he says.
UX designer Matthew Stephens, who opted for Austin over Silicon Valley because of the cost, tells Moneyish that moving to these smaller markets is a big trend he’s seeing among his tech peers. Added bonus: “I don’t see a lack of competitive advantage being in Austin, either. I feel that my job is just as fulfilling, if not more, than any job out there, as I can afford to go out more and live in a house that I own without breaking the bank.”
And now, in part because tech companies are moving their offices elsewhere in search of cheaper real estate, there are plenty of jobs to be had in others places, says Chamberlain. “Costs can be 10 times cheaper, he says. Indeed, in the past few years, Google, Apple, Dropbox and Oracle, along with roughly two dozen other tech companies, have built or expanded their campuses in Austin, the San Francisco Chronicle reports. Plus, companies of all kinds, from retail to media, now need tech help, which means workers don’t have to fork over tons of money to move to Silicon Valley, says Chamberlain.
And for some — like Ryan Farley, the co-founder or tech startup LawnStarter — shunning Silicon Valley in favor of Austin was about avoiding the culture there. “I wanted to live in a tech hub, but I didn’t want tech to dominate my whole life. When I visit the Valley, nearly every conversation revolves around topics such as the hottest consumer app, which startup got funded, or what the latest and greatest programming framework is,” he tells Moneyish. “It’s a bit of an echo chamber.”
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