Amid thousands of tech industry layoffs in Silicon Valley and beyond, at least one company may also face a costly court battle as a new lawsuit says Twitter didn’t give employees proper notification.
Silicon Valley is shrinking faster than our legislators want to acknowledge, Tom Manzo, founder and president of CABIA (California Business and Industrial Alliance), told the Northern California Record.
“I think you're going to continue to see that contraction as long as it becomes more difficult to do business here,” Manzo said.
Among the departures from California’s tech centers: Meta, which owns Facebook and Instagram, announced Wednesday it was laying off 11,000 employees, roughly 13 percent of its workforce. Stripe has said it will decrease its workforce by 14 percent. Twitter has said 3,700 employees will be laid off. Snap is downsizing roughly 1,200 employees. Lyft has let go nearly 700.
Manzo noted that California, the largest state by population, ranks almost last in cost of doing business, causing more company cutbacks and leading some to move out of the Golden State.
Musk has stated that Twitter is losing $4 million a day.
“So if a company is struggling financially, let’s use Twitter as an example, and maybe it's Elon Musk, this billionaire that bought it. So everybody thinks he's got all kinds of money. But let's say the company truly is struggling to manage. They have no choice but to lay people off to survive. And now with this layoff, if they didn't take the proper steps and procedures, they might end up paying a lot of money, way more money if PAGA (Private Attorneys General Act) somehow gets tied to this WARN Act lawsuit,” Manzo said.
“But in any other state in the United States, it wouldn't happen like that, because PAGA is just here.”
More than 65 companies have moved or expanded outside of California in 2022, according to the California Business Roundtable’s Center for Jobs and the Economy.