Despite thousands of job losses throughout California during February, the Bay Area saw a hiring upswing fueled partly by tech industry gains in the South Bay and Peninsula, according to the latest employment figures released by the state.
Adjusted for seasonal volatility, employers added 3,000 positions in the Bay Area in February, while California overall lost 19,900, the state Employment Development Department reported.
The California unemployment rate in February was 5.4%, unchanged from January and below previous highs of 5.5% from June 2025 through December 2025.
The Bay Area has experienced job gains for eight straight months, a trend at odds with the rest of the state.
“The headlines for the past year have been screaming layoffs,” said Russell Hancock, president of San Jose-based think tank Joint Venture Silicon Valley. “The water cooler and cocktail party conversation has been about whether AI is eliminating jobs. The actual numbers are telling a completely different story, one of sustained growth and remarkable resilience.”
In February, the South Bay added 2,000 jobs, the San Francisco-San Mateo region gained 1,100, and the East Bay added 600, according to the EDD. In the North Bay, Marin County and Napa County each added 300 jobs, while Solano County lost 500 and Sonoma County shed 800.
“The results are particularly encouraging for the South Bay, which saw an increase in the labor force as well as jobs in the past year,” said Steve Levy, director of the Palo Alto-based Center for Continuing Study of the California Economy.
The South Bay numbers are in contrast with California and the rest of the U.S., which have experienced hiring declines due to retirements and deportation policies, Levy said.
Over the one-year period that ended in February, gains in the South Bay greatly outpaced the rest of the region and state.
“Silicon Valley isn’t going gangbusters, not by any stretch, but what is happening is remarkable in its own way,” Hancock said. “It shows this is an economy fueled by an innovation engine that’s running extremely hot right now.”
The South Bay has been able to absorb thousands of layoffs yet still avoid a worsening of the jobless rate in the region, Hancock noted.
“Hiring has revived,” said Michael Bernick, an employment attorney with law firm Duane Morris and a former director of the EDD. “This has been due in good part to the artificial intelligence boom.”
However, the encouraging hiring trends in the Bay Area may not continue, Levy said.
“It is still appropriate to be cautious as inflation is increasing,” Levy said. “Immigration, critical to the Bay Area, continues to decline, and housing supply and affordability remain a challenge here.”
During the 12 months ending in February, the South Bay added 18,200 jobs, a 1.6% increase; the San Francisco-San Mateo area added 8,000, a 0.7% increase; and the East Bay gained 4,200, a 0.4% rise.
The Bay Area added 33,900 jobs, an increase of 0.8% during the same one-year period. Over the same 12 months, California gained 120,500 jobs, a 0.7% increase.
“Silicon Valley is home to companies that are growing across the nation and growing internationally, while at the same time adding jobs here at home, in one of the most expensive places you can add jobs,” Hancock said. “As important as it is to watch the job numbers, it’s even more important to watch our housing numbers.”
Sturdy hiring in the tech industry, along with strong job growth for the hotels and restaurants sector, along with health care, helped to power employment gains in the Bay Area during February, according to seasonally adjusted industry numbers that Beacon Economics derived from the official EDD monthly report.
The Bay Area added 500 tech jobs in February, bolstered by a gain of 700 in the San Francisco-San Mateo region and another 500 in the South Bay. The East Bay, however, lost 500 tech jobs and Sonoma County shed 200, the Beacon report determined.
The Super Bowl might have given the Bay Area’s hotel and restaurant industry a lift in February.
The Bay Area added 2,300 hotel and restaurant jobs during the month, the Beacon estimates show. Hotels and restaurants added 1,100 jobs in the San Francisco-San Mateo region, 500 in the South Bay, 300 in Sonoma County, 200 in the East Bay, 100 in Solano County, and 100 in Napa County.
Health care employers added 2,100 jobs in February, according to Beacon Economics. The sector gained 800 jobs in the East Bay, 600 in the South Bay, 500 in the San Francisco-San Mateo metro area, and 100 each in Solano County and Napa County.
“We continue to have an economy most people would envy,” Hancock said. “But we have significant challenges.”
Silicon Valley’s economy might strand middle- and lower-income workers while in-demand tech workers land high-paying roles in the AI sector, Hancock said.
“Our dynamism is mostly creating opportunity at the high end of the spectrum,” Hancock said. “That feeds into our high housing prices, making it difficult for the rest seeking opportunity here.”