Bay Area loses jobs in March as California sees gains overall

The Bay Area lost thousands of jobs in March, a hiring slump that contrasts sharply with sturdy hiring reported throughout California during the same month.

The latest report from the state Employment Development Department is a reversal of February’s results, which saw the Bay Area gaining jobs while the state overall shed positions.

“Welcome to the new Bay Area. We’re volatile and unpredictable,” said Russell Hancock, president of San Jose-based think tank Joint Venture Silicon Valley. “Some sectors like healthcare are growing, but our driving industries in tech are going to be skittish for a while.”

Adjusted for seasonal volatility, the Bay Area lost 3,500 jobs in March, the EDD reported. In February, the region had gained 1,400.

Employment declines in the region snapped a streak of eight consecutive months of employment gains.

“The Bay Area job loss numbers were a surprise, given the area’s job growth in recent months, and the positive job impacts of artificial intelligence,” said Michael Bernick, an employment attorney with law firm Duane Morris and a former director of the state EDD.

California added 28,700 jobs in March, a rebound from losses of 18,800 in February, according to the EDD.

The EDD initially had estimated that California lost 19,900 jobs in February.

“California's payroll jobs increased in March, partially driven by the end of a major strike at Kaiser Permanente,” Beacon Economics reported in a new analysis. “The strike had weighed on February's figures, but March showed a rebound as people went back to work.”

The statewide unemployment rate in March was 5.3%, an improvement from 5.4% in February, the EDD reported. Both are below peaks in the statewide jobless rate that had climbed to 5.5% during 2025.

Among losses in the region in March, the South Bay lost 300 jobs, the East Bay shed 2,400 positions, and the San Francisco-San Mateo region lost 2,800 jobs, according to the EDD.

The North Bay’s metro areas all produced solid job gains in March, the EDD report showed. Sonoma County added 700 jobs, Solano County gained 700 positions, Marin County added 400, while Napa County gained 200 jobs.

Weakness in the tech industry was a contributing factor behind the slump in Bay Area hiring. Tech companies are seeking to rightsize their job totals as they grapple with the turmoil unleashed by the artificial intelligence revolution.

“This is a time for caution,” said Steve Levy, director of the Palo Alto-based Center for Continuing Study of the California Economy. “Silicon Valley faces massive headwinds.”

Adding to that caution are complications with the economy nationwide, according to Levy, including tariffs, the Iran war, and inflation uncertainties. Deportations also have caused the labor force to dwindle, he said.

Regional challenges include high housing costs and fiscal challenges for local government agencies and school districts.

In March, the Bay Area lost 1,400 tech jobs, according to seasonally adjusted estimates produced by Beacon Economics that the company derived from the EDD’s official monthly report.

The industry’s employment decline was primarily due to a loss of 1,300 tech jobs in the San Francisco-San Mateo region, Beacon estimates determined.

The South Bay lost 200 tech jobs, while Sonoma County gained 100, according to Beacon.

The construction, retail, and healthcare industries were key sources of strength for the Bay Area job market in March.

The region gained 600 construction jobs, 500 retail positions, and 300 healthcare role, Beacon determined.

Over a longer-term basis, the South Bay job market appears to be far stronger than is the case with the Bay Area overall, California, and the United States, this news organization’s analysis of figures produced by the EDD and the U.S. Bureau of Labor Statistics shows.

During the 12 months that ended in March, nonfarm payroll job totals jumped by 1.5% in the South Bay.

Those gains far outstripped the increase of 0.8% in California, 0.7% in the Bay Area, 0.5% in the San Francisco-San Mateo region and 0.2% in the United States. East Bay job totals were virtually unchanged.

It could take some time for analysts to assess the state of the Bay Area job market.

“It is difficult to get a good read on the health of the Bay Area labor market,” said Scott Anderson, chief U.S. economist with BMO Capital Markets. “The monthly jobs data have been volatile and prone to large revisions.”

A clearer picture might not emerge until sometime this summer.

“We’ll look toward the April and May data to better understand if this is a one-month blip in the region's growth or the start of the region's employers reconsidering their hiring plans,” said Jeff Bellisario, executive director of the Bay Area Council Economic Institute.

The tech industry might remain especially volatile as the year advances, experts said.

"The up-and-down swings in tech reflect deeper structural change, and yes, that most certainly has something to do with AI,” Hancock said. “Hold onto your hats, people. It’s about to get choppy.”

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This story was originally published May 1, 2026 at 11:50 AM.