A tech hiring slowdown in 2018 in America’s three largest innovation hubs would not have surprised John Barrett, given global economic uncertainty stemming from factors such as trade disputes, slower economic growth in China and Europe, and the UK’s looming exit from the EU.
Instead, the pace of tech hiring in the San Francisco Bay Area, New York, and Boston remained “pleasantly, surprisingly strong” last year, according to the latest quarterly analysis by Barrett, a Boston-area partner with executive recruiting firm ON Partners.
“We do see more [hiring] caution outside of tech, in the other sectors we recruit in,” which include manufacturing, life sciences, and private equity, Barrett says. “Inside tech, it’s not irrational exuberance. It’s not extreme enthusiasm. But it’s certainly equally strong [hiring compared] to the past couple of prior years.”
The Digital Jobs Index spearheaded by Barrett tracks quarterly headcount growth among the leading 100 software companies—primarily in consumer Web, small business software, advertising and marketing tech, and payments—in each of the three metropolitan areas. The report also tracks the percentage of those top-100 companies that increased their local headcount during the quarter. The criteria for inclusion in the analysis include a company’s number of local employees, employment growth, and a subjective assessment of its importance to the local tech cluster, ON Partners says.
The recruiting firm released its full-year 2018 figures this week. The Bay Area’s top tech companies added 26,780 net new jobs in 2018, more than New York (9,420 net new jobs) and Boston (5,540 net new jobs). But New York’s tech group saw the largest year-over-year percentage increase in local tech employment, at 13.4 percent, compared with a 12.7 percent annual gain in the Bay Area and a 9.2 percent annual jump in Boston.
Barrett’s statistics are gathered by searching LinkedIn for the number of locally based employees working for the tech companies. That means the data are not comprehensive—some employees might not update their LinkedIn profiles in a timely fashion, or might not even have one. But Barrett has said his data are usually within 5 percent of official hiring numbers.
The tech job growth in the Bay Area, New York, and Boston came during another monster year for venture capital investing. Venture investors pumped $130.9 billion into U.S. companies last year, the first time since the dot-com era that U.S. startups took in more than $100 billion in a given year, according to the Venture Monitor report from PitchBook and the National Venture Capital Association. California, New York, and Massachusetts received the most VC money last year.
Tech giants Alphabet (NASDAQ: [[ticker:GOOGL]]), Apple (NASDAQ: [[ticker:AAPL]]), and Facebook (NASDAQ: [[ticker:FB]]) led the way for the Bay Area last year, each adding more than 4,000 net new jobs. All three are based in the Bay Area. Google and Facebook also showed up on the list of top-10 tech job creators in New York and Boston last year, but with smaller hiring numbers. (See top-10 lists below.)
WeWork added the most net new jobs in New York’s tech sector last year (1,527), but Seattle-based e-commerce and technology company Amazon (NASDAQ: [[ticker:AMZN]]) wasn’t far behind (1,523 net new jobs in the Big Apple.)
This month, Amazon decided to reverse its decision to build a controversial satellite “headquarters” in New York’s Long Island City neighborhood, a project that was supposed to create 25,000 local jobs. Nevertheless, Barrett points out that Amazon has been on a New York hiring spree for several years, and he doesn’t expect the project’s cancellation to stunt the company’s local job growth rate of the past few years. According to Barrett’s analysis, Amazon has grown from just over 1,000 employees in the New York metro area at the end of 2013 to just under 7,000 local workers at the end of 2018. (Amazon has said it’s got 5,000 employees in New York City and more than 8,000 employees across New York state.)
“I don’t see anything slowing that freight train down,” Barrett says of Amazon’s New York job growth. “I think you’re going to continue to see increases there.”
Amazon was also one of the top tech job creators in the Boston area last year, adding 858 net new positions locally. That figure was surpassed only by Wayfair (NYSE: [[ticker:W]]), a locally based online seller of home goods that added 1,520 net new jobs here in 2018, according to Barrett’s analysis.
Interestingly, Oracle (NYSE: [[ticker:ORCL]])—a Bay Area tech firm that has acquired New England tech companies such as Dyn, Endeca, and Acme Packet in recent years—added the most net new jobs in the Boston area in the fourth quarter: 611, Barrett’s analysis found. For the full year, Oracle’s local employee base increased by 223 people, due to headcount reductions in the first and third quarter, Barrett says. An Oracle spokesperson declined to comment on the company’s local staffing changes.
Barrett says he’s encouraged by the number of “homegrown companies” that made the top-10 hiring list in Boston last year, an indicator of the “health of the ecosystem,” he argues.
“Boston has often relied on [San Francisco-based] Salesforce or Amazon to increase their headcounts” in the local tech sector, Barrett says. “But you’ve got continued increases not only from [locally based firms] Wayfair and HubSpot, but up and comers like Salsify and EzCater.”
Barrett remains upbeat about 2019 hiring, despite some possible signs of trouble. Around 60 percent of the Boston companies on Barrett’s list and about 65 percent of the New York companies grew the size of their local payrolls in the fourth quarter. Both percentages were actually down from the third quarter, meaning a larger number of tech companies in Boston and New York either reduced their headcount or held it steady at the end of the year. But Barrett isn’t alarmed, in part because he says the fourth quarter often brings a hiring dip due to seasonal trends. (More than 70 percent of the Bay Area companies he tracks increased their local staff counts in the fourth quarter, up slightly from the previous two quarters.)
“I just don’t see evidence of a slowdown” in hiring in the three tech hubs, Barrett says. “I think [first quarter data] will tell us a lot in terms of how it shapes up for the rest of the year.”
Here are the tech companies that hired the most people in the Bay Area, New York, and Boston in 2018. The numbers represent net new jobs at each firm.
Bay Area:
1. Google: 6,341
2. Apple 5,105
3. Facebook: 4,100
4. Uber 1,819
5. Salesforce: 1,174
6. Amazon: 1,094
7. Lyft: 855
8. Workday: 652
9. Airbnb: 560
10. Splunk: 442
New York:
1. WeWork: 1,527
2. Amazon: 1,523
3. Google: 1,398
4. Compass: 1,023
5. Facebook: 701
6. Uber: 498
7. Indeed.com: 247
8. Salesforce: 246
9. Spotify: 227
10. Microsoft: 215
Boston:
1. Wayfair: 1,520
2. Amazon: 858
3. HubSpot: 235
4. Google: 228
5. Oracle: 223
6. EzCater: 158
7. CarGurus: 146
8. DraftKings: 134
9. Salesforce: 109
10. Facebook: 107
And here are the tech companies that hired the most people in each city in the fourth quarter.
Bay Area:
1. Uber: 833
2. Facebook: 482
3. Amazon: 363
4. Workday: 337
5. Lyft: 232
6. Airbnb: 201
7. Palo Alto Networks: 135
8. Slack: 116
9. Credit Karma: 105
10. Netflix: 103
New York:
1. Amazon: 649
2. WeWork: 637
3. Compass: 288
4. IBM: 267
5. Google: 224
6. Uber: 156
7. Facebook: 96
8. Pandora: 76
9. LinkedIn: 71
10. Lyft: 67
Boston:
1. Oracle: 611
2. IBM: 267
3. Wayfair: 260
4. Amazon: 173
5. Google: 44
6. CarGurus: 34
7. American Well: 34
8. ZoomInfo: 33
9. LogMeIn: 31
10. Care.com: 30
