Bay Area and California lose jobs in September, but South Bay gains workers
- PUBLISHED: October 16, 2026 at 11:48 AM PDT
| UPDATED: October 16, 2026 at 1:02 PM PDT - Categories:Business, Latest Headlines, News, Technology
Google Bay View campus on Crittenden Lane in Mountain View, seen in a drone view in March 2025. (Jane Tyska/Bay Area News Group)
While the Bay Area and California saw a decline in jobs in September, the South Bay continued to be a bright spot in an otherwise murky employment market, a new state government report shows.
Adjusted for seasonal volatility, the Bay Area lost 1,000 jobs last month, while California shed 9,300, the state Employment Development Department reported Friday.
The South Bay, however, added 1,100 jobs,
The South Bay, however, added 1,100 jobs, a slowdown from gains of 4,300 in July and 4,400 in August
“The Bay Area and Silicon Valley remain the innovation and growth engines for California’s economic expansion,” said Scott Anderson, chief U.S. economist for BMO Capital Markets.
The East Bay lost 2,800 jobs in September, the primary factor behind the region’s hiring setbacks.
The San Francisco-San Mateo metro area gained 200 jobs, the EDD reported.
In the North Bay, Marin County and Solano
In the North Bay, Marin County and Solano County both added 300 jobs, Sonoma County gained 100, and Napa County lost 200.
The statewide jobless rate was 5.1% in September, unchanged from August.
“The September numbers are tepid by Silicon Valley standards, and that might be because AI isn’t going to be the same kind of job generator that we saw with our previous waves of innovation,” said Russell Hancock, president of Joint Venture Silicon Valley, a San Jose-based think tank.
The tech industry in the Bay Area is in turmoil as it attempts to ride the wave of opportunities offered by artificial intelligence even as it scouts for the optimal employment levels needed for the fledgling sector.
AI is eliminating jobs at the same time
“AI is eliminating jobs at the same time that it is creating jobs,” Hancock said.
The tech industry added 2,100 jobs during September, according to seasonally adjusted industry statistics provided by Beacon Economics.
Over the 12 months that ended in September, the Bay Area gained 35,900 jobs, a 0.9% increase in employment totals during that period. The San Francisco-San Mateo region gained 10,200 jobs, a 0.9% rise, and the East Bay lost 200.
The South Bay outperformed all regions during
The South Bay outperformed all regions during the one-year period ending in September with an addition of 20,900 jobs, a 1.8% jump.
During the same one-year stretch, California added 129,300 jobs, a 0.7% increase.
“This is the last jobs report before the November election and shows the job world that California’s next governor will be inheriting,” said Michael Bernick, an employment attorney with law firm Duane Morris and a former director of the state EDD.
The employment picture in California appears to have turned darker of late.
Over the six months that ended in March 2026, California produced an average increase of 23,450 jobs a month. However, over the half-year period that ended in September 2026, the state lost an average of 1,900 jobs a month.
Job growth has slowed significantly over the past
“Job growth has slowed significantly over the past six months and shows signs of continuing to slow through the rest of the year,” Bernick said.
The employment picture in this region could be headed into a period of sluggish hiring as the AI revolution continues to erase jobs even as it creates more positions.
Put another way, the economy might surge, as expressed by soaring stock prices, profits and more valuable tech companies. That might not mean a hiring boom, however.
Strong national-leading economic growth is not translating into
“Strong national-leading economic growth is not translating into a vibrant labor market with rapid job creation like it has in the past,” Anderson said.
The new economy in the Bay Area might look quite different from the old economy, or even today’s economy.
“The low hire and low fire labor market is firmly in place in the Bay Area, even though the region and Silicon Valley in particular have been able to grow jobs a little bit faster over the past 12 months,” Anderson said.
