<img height="1" width="1" style="display:none;" alt="" src="https://px.ads.linkedin.com/collect/?pid=1401428&amp;fmt=gif">
Skip to content
tech workers at desks
Erik HaydenAug 3, 2023 11:43:40 AM7 min read

Silicon Valley’s latest job gains show we’re “poised for liftoff” as tech sector reverses downsizing

The word is out, and the numbers back it up: Silicon Valley’s tech sector is finding its footing again after undergoing a reset over the past 18 months. For the first time since the start of last year, the number of tech layoffs in the Bay Area last quarter was less than in the previous three months, according to California Employment Development Department data. Better yet, the net change in the region’s tech headcount was positive 800 jobs from April through June after being negative 14,900 in the first quarter of 2023, suggesting that the industry has “turned the corner,” Russell Hancock, president of think tank Joint Venture Silicon Valley, told The Mercury News.

Although companies’ expansion plans continue to be challenged by high interest rates and inflation, many large employers have lately taken a “much more positive macro view of the economy,” Jeff Bellisario of the Bay Area Council Economic Institute told the Mercury News. Rising tech stocks, falling inflation, and the S&P 500 experiencing five straight months of gains all offer reasons for optimism, as does a CBRE report published last month that says the Bay Area continues to have the nation’s single largest tech talent labor pool and the highest number of tech roles of any U.S. market.

The region’s tech sector mainly used the first half of this year to reset after overhiring became prevalent during the height of the pandemic. Some in the industry are also in the midst of pivoting to artificial intelligence and machine learning. Others are making their first forays into developing green energy vehicles and batteries. In all of those cases, many tech companies continue to hold on to their engineering talent, CBRE’s Chris Shepherd, a member of the real estate brokerage’s tech and media practice, is quoted as saying in the Mercury News. Most of the layoffs that have impacted the Bay Area’s tech sector since the start of last year have affected non-tech roles such as marketing, finance, and recruiting, Shepherd said, according to the Mercury News.

Signs of stabilization in the local tech scene reflect an improving situation nationwide, the newspaper reported. Tech job cuts across the board were down 79.5 percent from a year ago in June, with layoff announcements in just the western United States down 69.5 percent, Bank of the West’s Scott Anderson told the Mercury News, citing data compiled by consulting firm Challenger, Gray & Christmas.

As the rate of layoffs slows, the idea of tech job growth resuming during the next 12 months is much more plausible now than at the start of 2023. OpenAI’s launch of the ChatGPT chatbot at the end of last year sparked a frenzy among investors, businesses, and the public for all things artificial intelligence, as the Silicon Valley Business Journal put it. San Jose and San Francisco have four times more AI companies, job postings, and job profiles than the next 13 U.S. metro areas, according to a recent report by the Brookings Institution think tank. If the inflation rate remains on a downward trend and the Fed begins loosening its restrictive monetary policy, it’s almost certain that the Bay Area’s largest tech companies, many of whom recently reported strong quarterly earnings, will ramp up hiring efforts in an effort to grab more market share in the artificial intelligence and machine learning landscapes, propelling the rest of the industry into its latest “boom” cycle.

As Joint Venture’s Hancock put it to the Mercury News, “We’re poised for our next phase of innovation and reinvention. People who have lived in Silicon Valley long enough have seen this movie before. Stay here awhile and you’ll see it all over again.”


Important Disclosures

The contents of this communication: (i) do not constitute an offer of securities or a solicitation of an offer to buy securities, (ii) offers can be made only by the confidential Private Placement Memorandum (the “PPM”) which is available upon request, (iii) do not and cannot replace the PPM and is qualified in its entirety by the PPM, and (iv) may not be relied upon in making an investment decision related to any investment offering by an issuer, or any affiliate, or partner thereof ("Issuer").

All potential investors must read the PPM and no person may invest without acknowledging receipt and complete review of the PPM.

With respect to any performance levels outlined herein, these do not constitute a promise of performance, nor is there any assurance that the investment objectives of any program will be attained. All investments carry the risk of loss of some or all of the principal invested. Assumptions are more fully outlined in the Offering Documents/ PPM for the respective offering. Consult the PPM for investment conditions, risk factors, minimum requirements, fees and expenses and other pertinent information with respect to any investment.

These investment opportunities have not been registered under the Securities Act of 1933 and are being offered pursuant to an exemption therefrom and from applicable state securities laws. All offerings are intended only for accredited investors unless otherwise specified.

Past performance are no guarantee of future results. All information is subject to change. You should always consult a tax professional prior to investing. Investment offerings and investment decisions may only be made on the basis of a confidential private placement memorandum issued by Issuer, or one of its partner/issuers. Issuer does not warrant the accuracy or completeness of the information contained herein. Thank you for your cooperation.

Real Estate Risk Disclosure:

- There is no guarantee that any strategy will be successful or achieve investment objectives including, among other things, profits, distributions, tax benefits, exit strategy, etc.;
- Potential for property value loss – All real estate investments have the potential to lose value during the life of the investments;
- Change of tax status – The income stream and depreciation schedule for any investment property may affect the property owner’s income bracket and/or tax status. An unfavorable tax ruling may cancel deferral of capital gains and result in immediate tax liabilities;
- Potential for foreclosure – All financed real estate investments have potential for foreclosure;
- Illiquidity – These assets are commonly offered through private placement offerings and are illiquid securities. There is no secondary market for these investments.
- Reduction or Elimination of Monthly Cash Flow Distributions – Like any investment in real estate, if a property unexpectedly loses tenants or sustains substantial damage, there is potential for suspension of cash flow distributions;
- Impact of fees/expenses – Costs associated with the transaction may impact investors’ returns and may outweigh the tax benefits
- Stated tax benefits – Any stated tax benefits are not guaranteed and are subject to changes in the tax code. Speak to your tax professional prior to investing.

Opportunity Zone Disclosures

- Investing in opportunity zones is speculative. Opportunity zones are newly formed entities with no operating history. There is no assurance of investment return, property appreciation, or profits. The ability to resell the fund’s underlying investment properties or businesses is not guaranteed. Investing in opportunity zone funds may involve a higher level of risk than investing in other established real estate offerings.
- Long-term investment. Opportunity zone funds have illiquid underlying investments that may not be easy to sell and the return of capital and realization of gains, if any, from an investment will generally occur only upon the partial or complete disposition or refinancing of such investments.
- Limited secondary market for redemption. Although secondary markets may provide a liquidity option in limited circumstances, the amount you will receive typically is discounted to current valuations.
- Difficult valuation assessment. The portfolio holdings in opportunity zone funds may be difficult to value because financial markets or exchanges do not usually quote or trade the holdings. As such, market prices for most of a fund’s holdings will not be readily available.
- Capital call default consequences. Meeting capital calls to provide managers with the pledged capital is a contractual obligation of each investor. Failure to meet this requirement in a timely manner could elicit significant adverse consequences, including, without limitation, the forfeiture of your interest in the fund.
- Opportunity zone funds may use leverage in connection with certain investments or participate in investments with highly leveraged capital structures. Leverage involves a high degree of financial risk and may increase the exposure of such investments to factors such as rising interest rates, downturns in the economy or deterioration in the condition of the assets underlying such investments.
- Unregistered investment. As with other unregistered investments, the regulatory protections of the Investment Company Act of 1940 are not available with unregistered securities.
- It is possible, due to tax, regulatory, or investment decisions, that a fund, or its investors, are unable realize any tax benefits. You should evaluate the merits of the underlying investment and not solely invest in an opportunity zone fund for any potential tax advantage.

The above material cannot be altered, revised, and/or modified without the express written consent of Urban Catalyst.


Erik Hayden

Responsible for developing more than $3.5 billion in real estate projects, including over 2,300 residential units in the California Bay Area, Mr. Hayden has experience in acquisition, contract negotiation, due diligence, risk assessment, financing, construction, and disposition of multifamily, single family and large mixed-use and master planned developments. He maintains relationships with a broad network of property owners, enabling him to identify and acquire prime investments. Mr. Hayden also has expertise in navigating projects through the entitlement process by working with elected officials, community groups, and political organizations to gain support and get projects approved.