West Coast Jobless Rate Hits 5.2% as AI Spending Fuels Tech Layoffs
Updated
Updated · CNN International · Aug 8
West Coast Jobless Rate Hits 5.2% as AI Spending Fuels Tech Layoffs
1 articles · Updated · CNN International · Aug 8
Summary
California, Oregon and Washington tied for the nation’s second-highest unemployment rate at 5.2% in June, even as many of the biggest AI investors are based on the West Coast.
AI adoption is cutting hiring as companies spend on automation and enterprise tools instead of adding staff, economists said, leaving software, data and other tech-adjacent workers facing fewer openings.
California’s information-sector employment fell to a six-year low in April, and unemployment claims are rising among highly AI-exposed workers, especially advanced-degree holders in the Bay Area.
Major employers have kept shrinking payrolls: Amazon has cut more than 30,000 jobs since October, Microsoft’s headcount fell last month for the first time in a decade, and Intel reduced its workforce to 81,000 from over 130,000 in 2022.
The broader backdrop is also worsening demand: the U.S. lost 23,000 jobs last month, and Iran-war-driven freight and fuel costs are pushing western businesses toward selective hiring.