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Texas

Is Austin’s economy immune to major tech layoffs?

Austin (KXAN). Another major tech company with a presence in Austin has announced major layoffs.

On Friday, Google’s parent company Alphabet said it was cutting 12,000 jobs at the company, in the biggest layoff so far.

In a message posted online, CEO Sundar Pichai said he “deeply regrets” the cuts.

“This is egregious and unacceptable behavior from a company that made $17 billion in profit last quarter alone,” said Parul Kul, executive chairman of Alphabet Workers Union-CWA, in a statement emailed to KXAN News.

The Texas Workforce Commission (TWC) said the agency has not yet received a WARNING letter to Google or its parent company Alphabet.

The WARN Act is a federal law that requires companies with 100 or more employees to give at least 60 days written notice of business closures and mass layoffs affecting more than 50 employees.

In late 2022, colleagues with a large presence in Austin, including Meta and Amazon, announced their own layoffs and hiring freezes.

Despite all the turmoil in the tech sector, the economy of the Austin metropolitan area is growing.

The area’s unemployment rate is lower than the rest of the state and country, according to the latest jobs data released by TWC on Friday.

So, is Austin immune to these major tech cuts?

“The short answer is yes, we are isolated,” said Matt Patton, executive vice president of Angelou Economics.

Patton said Austin is ahead of the rest of the country in job creation, and he predicts another productive and strong year in 2023.

“This does not mean that there are no problems and that we should ignore some of these decisions because they affect people on a very personal level. But it is a much better place than other places that may experience similar disruptions to their economy,” he said.

He appreciates the diversity of Austin’s business.

“It’s such a strong local economy that it doesn’t depend on one thing or one company,” Patton said.

“It tells me we’re doing the right thing,” said Roland Peña, senior vice president of global technology and innovation for the Greater Austin Chamber of Commerce and Opportunity Austin.

Peña cites the Austin subway start-up as a prime example: its value is more than $128 billion, a record.

“I think that plays a role in what we see in terms of how resilient we are,” he said. “Why do companies want to move here, whether it’s a legal entity, whether it’s a startup, whether it’s international or otherwise, the US… it’s attractive because the companies here are successful and they have everything they need to help them be much more successful” .

Peña said companies like Google have said that restructuring due to economic conditions could be a challenge. possibility for Austin.

“Where are the areas that are most effective? Where are the areas where we are going to get more bang for your buck? Where… are the areas we can transcend and excel?” And Austin is a very good place for that, it has proven itself during the pandemic,” he said.

At its briefing on Tuesday, TWC said Lonestar staff is not yet seeing the impact of the layoffs. It says 2022 was the second strongest year in Texas on record, and the state is seeing strong growth.

KXAN Media Partners in the Austin Business Journal revealed that Google is outside the top 30 private employers in the Austin area with 2,000 employees.

Number one is HEB with over 20,000 employees, followed by Dell with 13,000, Ascension Texas with just over 12,000 employees, and Amazon with 11,000.

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