Unemployment in California rose to 8.7 percent in July, according to the Bureau of Labor Statistics, as growth slowed in the state’s tech sector.
The Los Angeles Times reports:
The announcement Thursday that Silicon Valley giant Cisco Systems, which sells networking and telecommunications equipment, plans to cut 4,000 jobs is the latest sign of a slowdown that has sucker-punched high-tech firms.
After a remarkable six-year boom set off by the introduction of the first iPhone in 2007, tech companies of all shapes and sizes are finding growth slowing, and even contracting in some cases.
In recent months, tech earnings have plummeted as tech companies have reported slower growth or declines. Venture capital has fallen almost 7% this year. Tech mergers and acquisitions have tumbled. And tech stocks have lagged the broader stock market this year. As of early August, the S&P 500 was up 19.68%, but tech stocks in the index were up only 11.1%, one of the lowest-performing categories.
The economic slowdown in California is already renewing the state’s budget crisis after a boon from one-time fiscal cliff related tax revenue and a Federal Reserve fueled real estate boom saved the state last year. According to the State Controller’s July report, revenues are already 6 percent below expectations for the first month of this fiscal year.