Tech Among Most Resilient U.S. Employment Sectors
The tech industry has accounted for just 137,000 of 21.4 million jobs lost since the COVID-19 shutdown began in March, making it one of the U.S. economy’s most resilient employment sectors. Large-cap tech companies and those that support critical infrastructure and working from home have been particularly resilient. Segments of the tech industry that support the hospitality & leisure, retail, restaurant and transportation sectors and rely on venture capital to fund operations have been more adversely affected and forced to conserve capital and reduce head counts.
Tech software & services employment contracted by 3.2% or 94,000 jobs in March and April compared with -14.0% for total U.S. employment, -11.3% for professional & business services and -5.2% for state & local government. April jobs data for metro areas is not yet available, but it’s well-known that tech firms are clustered in certain markets and have accounted for 21% of total U.S. office leasing activity in 2018-19. Private, venture capital-backed tech firms accounted for about one-fourth of tech industry leasing last year or about 5.5% of the U.S. total and are highly concentrated in San Francisco, New York City, Boston and Los Angeles, where the largest share of tech jobs losses are expected to occur.
The tech industry appears well-positioned to weather the economic storm and lead the next growth cycle by capitalizing on new business and consumer preferences with further innovations that facilitate the “new normal.”
U.S. Job Losses by Industry Since COVID-19: Tech Less Impacted
Rate of job losses in March and April for tech and office-using industries