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.
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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.
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.
