Despite the recent downturn, several local economists said they remain optimistic about the future of Austin’s tech industry, pointing to its low unemployment rate of 3% and new job openings.
By the numbers
According to layoff-notice letters from the Texas Workforce Commission, nearly 4,000 technology jobs have been slashed in the Austin region this year, and with some companies failing to file notices, it’s likely that number is higher.
Here is a running list of companies impacted so far:Bumble and Indeed did not file notices with the TWC and neither company was able to confirm how many Austin employees were affected.
Across the board, companies announced plans to downsize their teams and cut costs.
Among the layoffs, companies such as Rooster Teeth and Arkane Studios shuttered their Austin-based operations completely.
The reasons
While Austin’s reputation as a technology hub was established decades ago with the combined presence of Dell Inc. and The University of Texas at Austin, the pandemic brought a new wave of remote-working talent and venture capital interests from outside the state, Austin Technology Council CEO Thom Singer said.
From 2018 to 2023, over 30 tech companies opened shop in Austin and employment in the industry boomed, increasing nearly 31% according to data from Opportunity Austin, a nonprofit that works with business leaders and startups across Central Texas.
“These tech companies really amped up on hiring and in many situations, possibly over-hired. We were on a really fast growth trend, so they hired to be able to deliver, and now things are stabilizing,” said Stacy Schmitt, the senior vice president of communications for Opportunity Austin.
State economics analyst Mark Sprague echoed the sentiment saying “what goes up must come down,” and attributing the recent wave of layoffs to a broader trend in the tech industry nationally.
The bigger picture
Since 2023, tech giants like Google, Dell, Meta, Amazon and Microsoft have slashed tens of thousands of jobs. With heightening interest rates and inflation, Sprague said it was only a matter of time that the trend reached Austin’s tech sector as well.
When it comes to smaller tech companies leaving the city, Paul O'Brien, the CEO of startup incubator MediaTech Ventures, said he believes some were misled about local investment appetites.
“It's misleading to say we are the next Silicon Valley or the next big startup hub. We're not good at everything, no one can be," O’Brien said. "'Tech’ is too generic a word. It includes everything from software and fintech to semiconductors. A lot of people that came here thinking Austin was great for ‘tech’ are now considering, ‘is my business actually appropriate in Austin?’”
O’Brien pointed to the recent example of the software company Oracle announcing the relocation of its headquarters from Austin to Nashville, noting that as the company becomes more prominent in the healthcare technology sector, Nashville is a better place to be than Austin.
Singer said in the coming years, he expects UT Austin's investments in artificial intelligence programs could lead to yet another boom in Austin's tech sector.
“We're not seeing an exodus, by any means, of tech companies moving out of Austin. In fact, we are still seeing many companies move into Austin,” Singer said. “We're seeing a little bit of a slowdown in growth, but I think that growth will continue over the next decade.”
