San Francisco’s tech industry, long a beacon of high-paying jobs and innovation, is grappling with an unexpected downturn that’s hitting its white-collar workforce hard. As of April 1, 2025, what some are calling a “white-collar recession” has taken root, with software engineers, managers, and other professionals facing shrinking opportunities and fiercer competition in a city once synonymous with limitless growth.
Take Zach Pretzell, a software engineer laid off from a space tech firm in late 2023. After eight months of fruitless job hunting—despite a robust resume and dozens of applications in the Bay Area—he finally landed a gig, but not as an engineer. Instead, he’s now a sales rep at a fledgling AI startup. “I went into tech for the stability,” Pretzell said. “Seeing friends who had cushy roles now grinding out 10-hour days just to hang on—it’s a wake-up call.”
The numbers tell a broader story. While official unemployment in the region hovers around 5%—far below the double-digit peaks of the Great Recession—the job market feels tighter than ever. Big Tech’s mass layoffs, which kicked off three years ago, have cooled a once-overheated sector. Back then, low interest rates fueled a venture capital frenzy, bloating payrolls in anticipation of blockbuster IPOs. Now, the “Magnificent Seven”—Apple, Microsoft, Google, Amazon, Meta, Tesla, and Nvidia—are slashing jobs and tightening belts, leaving mid-tier managers and engineers in the lurch.
This shift has a ripple effect. According to labor analytics firm Lightcast, unique job postings for software developers in San Francisco remain above early pandemic levels, suggesting opportunities still exist. Yet, the reality on the ground is grimmer. “When over 100,000 computer science grads hit a wall each year, it’s fair to say the industry’s promise is fading,” said economist David Zhao. “The Bay Area sold itself on accessible, lucrative jobs—now companies are barely hiring beyond replacing turnover.”
For the management class, the squeeze is even more pronounced. Corporate ladders are flattening, pushing former directors into lower roles with slimmer paychecks. Lexi Lewtan, CEO of Leopard.FYI, a network for women and nonbinary engineers sees an opportunity amid the chaos. “If tech’s rejecting managers, it’s time to flip to founder mode,” she said. That’s exactly what Julia Hu did after her 2023 layoff from Eventbrite, where she was a software engineering director. She co-founded an AI brand strategy firm, sharpening her skills over the past year. Now back on the job hunt, she’s leveraging that experience. “It’s a résumé booster,” Hu said. “It’s opened doors I didn’t expect.”
Still, the broader outlook is uncertain. The dot-com bust took over a decade to recover from, per Bureau of Labor Statistics data, but today’s tech market is arguably more resilient. Growth persists, albeit slower, and AI innovations promise new frontiers—though not enough to offset the current contraction. Zhao cautions against fixating on the tech giants’ woes. “The economy’s bigger than the Mag 7,” he said. “Workers often overlook how transferable their skills are.”
For San Francisco, the stakes are high. The city’s identity and economy remain tethered to tech, and this white-collar recession is testing its adaptability. Pretzell, for one, is adjusting to his new reality. “It’s not what I signed up for,” he admitted, “but you roll with it—or get left behind.”