The clothing company Gap says they will eliminate 500 corporate jobs in San Francisco and New York. The news has many concerned about a possible recession.
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SF-based clothing company Gap confirms they will eliminate 500 corporate jobs in San Francisco and New York.
RELATED: Gap slashes 500 corporate jobs in SF, NY as it looks to reduce expenses
"There's legitimate worry because companies are making decisions about the cost of labor, where they can get access to labor," said Brian Kropp, vice president of research at Gartner.
Last week, American Airlines said that more than 400 flight attendants from the Bay Area would be relocated to other states.
Tech insiders say Google, along with Facebook's parent company META are slimming down and restructuring some departments.
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"In the old days they called it layoffs, now they call it restructuring," said ABC 7 News insider Phil Matier. "COVID is over but now we have uncertain economic times. I don't care whether you're tech, airlines, or clothing, it all spells the same thing, tighten your belt and get smart on where your money is and your workers."
But the news is not all bad. If California were its own country, the state would have the 5th largest economy in the world and is now challenging Germany for the 4th spot, according to a UCLA study out Wednesday.
RELATED: Dreamforce conference returns to San Francisco, convention attendees acknowledge city challenges
Kropp says the overall economy may have slowed down but, "The reality is, the labor market as a whole is still really healthy and strong in comparison to any sort of historical norm outside of the great resignation time period."
Kropp says the Bay Area is no longer the stand-alone tech hub and is now competing with smaller cities like Austin, Boston, and Boise.
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Stanford's Lee Ohanian told us last week that housing affordability in California is having a major impact on our local economy and the decisions made by companies.
"What we really need to do to move the needle is reduce regulatory barriers that are constraining housing supply and new construction," said Ohanian. "Sadly the weather and the beaches only get you so far companies are looking to make a profit."