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From Silicon Valley to Hollywood, why California’s job market is taking a hit

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From Silicon Valley to Hollywood, why California’s job market is taking a hit

California is among the world’s largest economies, but the engines that drive it haven’t been firing on all cylinders.

The state has been buffeted by a litany of layoffs this year from Hollywood to Silicon Valley — and beyond. Economists cite several explanations, including contraction in the entertainment industry, displacements caused by artificial intelligence and overall uncertainty in the national economy.

This year, thousands of workers at Amazon, Intel, Salesforce, Meta, Paramount, Warner Bros. and Walt Disney Co. have lost their jobs. Even Apple just announced a rare round of cuts.

Seemingly no corner of entertainment and tech has been immune from the cost-cutting that has put workers on edge.

“People are hunkering down because they think a storm is coming,” UC Berkeley labor economist Jesse Rothstein said.

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Through October there were 158,734 layoffs announced in California, compared with 136,661 for the same period last year. That was the most of any state, lagging behind only Washington, D.C., which has been hit hard by federal downsizing, according to outplacement firm Challenger, Gray & Christmas Inc.

Nationwide, the layoffs have topped 1 million so far for the year, the most since the pandemic, according to Challenger.

As in the late 1990s, there’s a disruptive technology at play again — artificial intelligence, which is fueling a Silicon Valley investment boom reminiscent of the build-up to the last tech bust.

AI has been cited in more than 48,000 of the U.S. job cuts this year, with about 31,000 of those taking place in October alone, Challenger said.

“AI is replacing some of the entry-level jobs in tech. And yes, AI is actually replacing some jobs in Hollywood,” said economist Chris Thornberg, founding partner at Beacon Economics in Los Angeles.

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Other factors are at work too. Intel Chief Executive Lip-Bu Tan emailed employees after the company lost $821 million in the first quarter that becoming more efficient was key to a turnaround. “I’m a big believer in the philosophy that the best leaders get the most done with the fewest people,” he wrote.

The layoffs have challenged the notion that engineering jobs are a safe and sure path to success, perhaps in a way not since the first tech bust.

The mood is glum as well in Hollywood, where a succession of challenges from the COVID-19 pandemic, the dual writers’ and actors’ strikes in 2023 and runaway production to other locales has taken a toll — and that was before the current wave of consolidations that is threatening more job losses, with Warner Bros. the latest studio on the block.

The downsizing has contributed to California having the highest unemployment rate in the nation at 5.5% in August, with the exception of Washington, D.C. — though the state’s large farm economy with its agricultural workforce is a big contributor to its persistently high rate, Thornberg said.

The rate is unchanged from July but up from 5.3% a year earlier. (More recent figures have been delayed by the government shutdown.)

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The job insecurity is reflected in the percentage of workers quitting their jobs, which fell to 1.9% in August, a 10-year low.

Yet for all the doom and gloom, there isn’t any consensus that the local, state or national economies are heading into a recession, even with President Trump’s erratic tariff and immigration policies that have whipsawed industries and created economic uncertainty for businesses.

Part of the reason is that job creation has held up, with the most recent report last week showing the economy added 119,000 nonfarm jobs in September, exceeding forecasts, even as the unemployment rate edged up a tenth of a point to 4.4%.

Another significant reason, of course, is the river of money flowing into AI. Last year, private investment in AI totaled about $109 billion in the U.S., with China and the U.K. under $10 billion, according to the Stanford Institute for Human-Centered Artificial Intelligence.

By one estimate, Silicon Valley tech giants will invest more than $400 billion this year in AI data centers. Amazon, which recently announced plans to cut 14,000 corporate jobs, said this week that it would invest up to $50 billion to expand its AI and supercomputing services for the U.S. government.

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Moody’s Analytics estimates AI spending this year has so far added more than half a point to GDP and is helping keep the U.S. out of a recession.

Now, the bigger fear is that the spending is feeding a gigantic stock market bubble that has benefited higher-income consumers — while middle-class and lower-income workers worry more about keeping a job and a roof over their heads.

The volatile market was calmed last week only when AI chipmaker Nvidia reported strong earnings.

The University of Michigan’s consumer sentiment index fell to 51.0 this month, down from 53.6 in October, with a number above 50 indicating a positive sentiment. Survey economists point to persistent inflation and the loss of income.

To put the statistic into perspective, the index is lower than at the height of the Great Recession in 2008, and reflects what is called a K-shaped economy, with higher earners spending and lower earners not.

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The effect has been so profound it’s not just reflected in the growth of luxury sales but in who’s spending at America’s two great consumer bellwethers — McDonald’s and Walmart.

Prices have risen so high at the country’s largest burger chain that sales to low-income customers have fallen while higher-income consumers are spending more. Walmart noted the same dynamic in its own earnings report last week.

Raul Anaya, co-head of business banking for Bank of America and president of its Greater Los Angeles operations, said that while layoffs by large companies are drawing attention, the bank’s recent survey of small and medium-sized business owners shows they are cautiously optimistic about the economy.

The survey, conducted in September, found that 74% think their revenue will increase in the next 12 months, though they would like to see a stabilization of tariff policies and a reduction in inflation and interest rates. Only 1% expected to lay off employees, while 43% said they expected to hire more workers.

“That’s fairly consistent with what I’m hearing from CEOs that I’ve been spending time with either over lunch or dinners that I regularly host throughout the last several months,” he said. He noted the Los Angeles region in particular is benefiting from the growth of aerospace and defense.

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“There are those companies that are serving some of these growing industries that continue to build a greater presence in Southern California or L.A. They’re part of the supply chain ecosystem of these broader industry concentrations,” he said.

In another positive sign, venture capital investments in the region more than doubled to $5.8 billion in the second quarter, compared with a year earlier. Costa Mesa-based defense tech company Anduril received the most funding, raising a $2.5-billion funding round, according to research firm CB Insights.

That kind of money has spurred a hiring spree among scores of aerospace and defense tech companies, many of which were started by former employees of SpaceX, which has large operations in Hawthorne.

A report this year by the Los Angeles County Economic Development Corp. found the county’s aerospace and defense industries added 11,000 jobs between 2022 and 2024, with an average wage of $141,110.

And while high, the county’s unemployment rate of 5.7% in August is lower than a year earlier, when it was 6.1%.

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Vast, a Long Beach company building a space station, started in 2021 with just a few dozen employees. A few months ago the figure was close to 1,000 and they were working in a recently expanded 189,000-square-foot headquarters complex — to cite just one example.

“There’s a lot of mixed readings out there. If you look at one set of indicators, you’ll see one economy. You look at the other set, you’ll see a different economy,” Thornberg said. “This is the strangest economy I have seen in 25 years I have been in this business.”

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Waymo reports teen riders for bad behavior and delivers them to the police

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Waymo reports teen riders for bad behavior and delivers them to the police

Robotaxis could be turning into robocops.

A self-driving Waymo reported two teens to San Mateo, Calif., police on Monday after they were found drinking alcohol and shooting toy guns in the back of the vehicle.

According to a social media post from the San Mateo Police Department, officers detained two 15-year-olds after the Waymo they were riding in contacted the department and stopped in a parking lot until law enforcement arrived.

“Parents do you know where your teens are?” the San Mateo Police Department wrote on Facebook following the incident. “Waymo does!”

Officers removed both teens from the vehicle and determined they were using toy guns to shoot Orbeez out the windows. Orbeez are small, water-absorbing beads sold at toy stores.

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“Toy guns, water guns, and BB guns all pose real dangers, especially to an untrained eye,” the Police Department said. “The simple handling of them can cause fear in [passersby].” “

A video posted on Facebook shows at least five officers and a police dog responding to the scene and approaching the Waymo with their weapons raised.

Waymo did not immediately respond to a request for comment.

Waymo vehicles have internal cameras and microphones that may be used in an emergency or to “promote safety and security,” according to Waymo’s online support page.

The cameras are also used to ensure the vehicles are clean and to help find lost items, according to the support page.

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The company said it does not use facial recognition or other biometric identification technologies to identify individuals.

“In more urgent circumstances, support may access live video during a trip,” the Waymo page said.

The San Mateo Police Department’s Facebook post has garnered nearly 60 comments, with one user accusing Waymo of “snitching.”

“At least they got a designated driver?!” one user commented.

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Commentary: How right-wing anti-transgender attacks led to a Supreme Court ruling upholding sex discrimination

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Commentary: How right-wing anti-transgender attacks led to a Supreme Court ruling upholding sex discrimination

At the Supreme Court, the unfounded fear of boys masquerading as girls in youth sports rolled the clock back on gender equality.

On the surface, the Supreme Court’s June 30 opinion upholding state laws barring transgender girls from women’s and girl’s sports teams looks like a victory for women’s rights.

The 6-3 opinion by Justice Brett M. Kavanaugh certainly presents itself that way. “Females and males have inherent physical differences relevant to athletic performance,” Kavanaugh wrote. “Therefore, in contact sports, forcing female athletes to compete against males can create significant safety risks.” He also asserted that “forcing female athletes to compete against males can undermine competitive fairness.”

The ruling applied to prohibitions enacted in Idaho and West Virginia against “biological” males’ participation on women’s teams in public schools. Federal judges in both states overturned the bans. The Supreme Court majority restored them. The ruling essentially upholds similar bans enacted in 25 other states.

There was no record of any transgender person participating in school sports in the State, let alone any ‘problem’ with transgender students … creating unfair competition or unsafe conditions.

— Justice Sonia Sotomayor, demolishing the Supreme Court’s argument in favor of banning transgender girls from girl’s sports

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Kavanaugh, like Donald Trump and others in the anti-transgender camp, maintained that one’s gender is an immutable fact of life, established even before birth.

Anything else, Trump stated in an executive order he issued on inauguration day 2025, could only be the product of “gender ideology extremism.” The U.S., his order stated, recognizes “two sexes, male and female. These sexes are not changeable and are grounded in fundamental and incontrovertible reality.” That’s a “biological truth,” he declared.

In his own version of this overconfident and factually insupportable conclusion, Kavanaugh wrote: “As all agree, females and males have inherent physical differences relevant to athletic performance.”

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Science recognizes that some people are “born with sex traits that don’t fit into typical male or female patterns,” to cite a discussion on the Cleveland Clinic web page on the topic “intersex.” The condition “may involve chromosomes, hormones, reproductive organs or genitals.”

From a psychological standpoint, medical science recognizes “gender dysphoria” as a real condition often requiring counseling and medical intervention such as the use of puberty blockers and hormones to stave off the development of secondary sex characteristics until the condition can be resolved.

No one disputes that there are physical differences between the sexes. Few would dispute that on average or even at the median, males may be bigger and more powerful than females, or that in certain contact sports the difference may be telling and on occasion dangerous.

But that’s not the same as asserting that the physical differences between males and females invariably mean that men will invariably prevail over women in all competitions or that their participation will endanger women.

The International Olympic Committee — in a policy statement Kavanaugh cited incompletely — says that in “most running and swimming events,” males have a 10% to 12% advantage over women. That’s a range that would accommodate the full spectrum of outcomes — transgender females win, cisfemales win, they tie. (The “cis” prefix denotes those living consistent with their birth gender.)

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West Virginia and Idaho addressed this ambiguity by banning transgender women from all girls’ teams. So under their rules transgender girls can’t play football or soccer with cisgirls. But what’s the argument in favor of banning them from the 100-yard dash, or cross-country track, or diving, or archery?

But something else is going on here. The Supreme Court’s ruling was almost preordained, given the years-long campaign by conservatives to demonize transgender individuals as if they’re members of an alien species.

It will be recalled that during his presidential campaign, Trump spun a despicable fantasy in which children were kidnapped in school and secretly subjected to sex-change operations.

Trump’s executive order wiped out policies aimed at protecting transgender adults from discrimination. He moved to outlaw gender-affirming medical therapies for anyone under 19 by cutting off federal funding for healthcare institutions that provide such care.

He banned transgender individuals from serving in the military and ordered federal prison officials to move transgender inmates into the general populations consistent with their birth genders, which exposes them to physical assault. (Federal Judge Royce Lamberth of Washington, D.C., has blocked the government from transferring three transgender women into the male prison population or terminating their hormone treatments.)

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I wrote during Trump’s first term, when his anti-transgender policies were still gestating, that the goal was to show that “one can target any community, as long as it doesn’t have a strong political voice or political power. These are the actions of bullies and cowards, pretending to be strong.”

Last year, the Supreme Court struck its first blow against transgender rights by upholding a Tennessee law banning transgender care, including puberty blockers and hormone therapy, for minors. Similar laws have been enacted in 25 other states. The majority in that ruling by Chief Justice John G. Roberts Jr. was identical to the one in the June 30 ruling — Roberts, Kavanaugh, and Justices Clarence Thomas, Samuel A. Alito Jr., Neil M. Gorsuch and Amy Coney Barrett.

Who are the targets of this ideological campaign? They number only about 1.6 million U.S. adults, or one-half of 1% of the U.S. population. About 300,000 adolescents ages 13 to 17, or 1.4%, identify as transgender, according to a study by UCLA School of Law.

In West Virginia, as Justice Sonia Sotomayor observed in her dissenting opinion, “there was no record of any transgender person participating in school sports in the State, let along any ‘problem’ with transgender students … creating unfair competition or unsafe conditions.”

In endorsing the flat bans directed at transgender women in Idaho and West Virginia, Kavanaugh argued that any attempt to implement case-by-case judgments of students’ requests to join sports teams inconsistent with their biological gender would create “an enormous practical and administrability problem.”

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Is that so? That wasn’t the case in Maine, where the annual K-12 population is more than 170,000. There, a committee was charged with determining whether a student’s participation in a sport consistent with their gender identity but inconsistent with their biological sex would “result in an unfair athletic advantage” or present a risk of injury to others. The committee held 56 hearings from 2013 through 2021, or an average of seven per year. During the entire time span, only four involved transgender girls. (The outcome of those hearings couldn’t be learned.)

It was Maine’s policy, one might recall, that provoked a confrontation between Trump and Maine Gov. Janet Mills at the White House last year, when Trump threatened to withhold federal funding from the state unless it barred transgender students from competing on women’s sports teams. “We’ll see you in court,” Mills snapped.

Whether the Idaho and West Virginia laws genuinely protect girls from unfair competition is questionable. (The Idaho law is styled the “Fairness in Women’s Sports Act.”) In practice, the laws may subject women in public schools to “invasive sex verification procedures,” as educational expert George Theoharis of Syracuse University wrote after the court ruling.

They’re also based on a retrograde view of women as fragile creatures needing men’s protection, Theoharis wrote — “the same logic that has historically been used to justify excluding women from making their own healthcare decisions and girls from rigorous math and science; that physically demanding work is simply beyond them.” (There don’t appear to be any state laws barring transgender women from competing in men’s sports.)

Becky Pepper-Jackson, the plaintiff in the West Virginia case, in which she is identified only as B.P.J., is the only transgender girl who sought to join girl’s teams — track and cross-country — in the state. That was in 2021, just after West Virginia passed its law and she was about to enter sixth grade. She didn’t appear to pose any competitive risk to others on the track and cross-country teams she applied to join — her lawyers told the Supreme Court that on those no-cut teams, she “came in near the back.”

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Anyway, she had not gone through male puberty, which theoretically might have endowed her with a competitive advantage, because she had been taking puberty blockers and female hormones.

Thanks to the court’s ruling, Sotomayor observed in a dissent joined by Justices Elena Kagan and Ketanji Brown Jackson, West Virginia can deny Becky access to school sports “because it thinks they have an inherent athletic advantage, even if the facts show that they do not.”

B.P.J., Sotomayor wrote, “cannot practice on girls’ teams, even if she would not take anyone’s spot in an eventual competition, even if everyone who tries out for the team makes it, and even if having the chance to participate could aid immensely in treating B. P. J.’s gender dysphoria.”

So whose interest was really protected by the Supreme Court?

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Orange County real estate investor pleads not guilty in $100 million bank fraud case

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Orange County real estate investor pleads not guilty in 0 million bank fraud case

An Orange County real estate investor accused of criminally defrauding an Arizona bank of nearly $100 million pleaded not guilty Monday and remains in custody.

Mahender Makhijani, 44, of Corona del Mar — who also was ordered by an arbitrator to pay $1.34 billion in a separate civil fraud case — was arraigned in Santa Ana federal court on two charges.

He is accused of bank fraud and making a false statement to a bank in a June 8 case involving a $100 million real estate loan made by Phoenix-based Western Alliance Bank. He was taken into custody on June 10.

Makhijani is accused of providing bogus collateral for the October 2024 loan now in default. In a civil lawsuit, Western Alliance said the outstanding balance as nearly $99 million.

Prosecutors say he falsified title insurance policies that showed the bank would have a first lien on the underlying collateral if the loan went bad, when in fact it did not.

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A trial was set for August 11 before U.S. District Judge David O. Carter in Santa Ana.

Michael Schachter, his criminal defense attorney, did not respond to messages seeking comment.

In the civil case, an arbitrator in May ordered Makhijani to pay Laguna Beach real estate mogul Mohammad Honarkar $1.34 billion after ruling he had fraudulently induced him into a 2021 joint venture — and then wrested control and lost to creditors more than two dozen properties Honarkar had owned.

Makhijani has not been criminally charged in that case, but prosecutors alleged in an affidavit in support of the bank fraud charges that he used “force and threats” in his dealings with Honarkar and others — including taking over the landmark Hotel Laguna in 2023 that Honarkar was renovating.

Prosecutors sought to hold Makhijani without bail after his arrest.

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The affidavit noted he is a legal Indian immigrant with a home and bank accounts in that country, has access to private jets and threatened to “run away” if caught in a difficult situation.

The request was denied and he was granted $500,000 bail.

However, Makhijani remains in custody after a hearing sought by prosecutors last month before Magistrate Judge Autumn Spaeth.

The judge declined to accept a $450,000 cashier’s check submitted by a Makhijani associate for the bail, finding insufficient proof the source of the funds was legitimate, according to court records.

Makhijani is not prominent outside Orange County real estate circles, but he established a thriving distressed-assets business over the last decade that attracted prominent Southern California real estate investors.

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Prosecutors said it paid for a lifestyle that included two multimillion-dollar homes in Corona del Mar, a luxury apartment in Newport Beach and various luxury vehicles.

As of last month, prosecutors had not fully traced his assets, which they believe are not held in his name and some of which may be in India.

The businessman employed an array of shell companies and strawmen to sign documents on his behalf, and to stand in for him as operators of his companies, according to the affidavit.

Makhijani told an associate he took extra precautions because wanted to insulate himself from litigation and that “they were sharks in the distressed world who took advantage of people,” the affidavit stated.

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