Business
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.
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.
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.)
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.
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.
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.
“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%.
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.”
Business
Rent-hike ban to protect fire victims ends despite gouging concerns
A rule intended to prevent rent gouging in the wake of the Eaton and Palisades fires has lapsed in Los Angeles County, possibly exposing some renters to hikes.
The executive order that blocked rent increases was issued by Gov. Gavin Newsom amid the devastating wildfires last year. Under the order, landlords couldn’t increase rents by more than 10% above their prefire levels.
The rule, which was supposed to be temporary and was repeatedly extended, ended Friday after a vote to extend it again failed to garner enough votes. Supervisor Lindsey Horvath, whose district includes Pacific Palisades, sounded the alarm in a motion to extend price protections that failed to pass at the Board of Supervisors’ May 19 meeting.
“These price gouging protections continue to be necessary as construction and rebuilding continue, and as thousands of people remain displaced,” the motion said. “Families which signed short-term leases could face drastic price increases of 50% or more without further price gouging protection.”
Los Angeles County is home to more than 1 million rental properties, though not all of them needed protection from the new rule. There are already stricter rent increase caps for many residences, depending on the location, type and age of the building. Despite the rent control in the region, the people of Los Angeles pay among the highest rents in the country.
It is uncertain whether renters will face rapidly rising rents now that the protection has lapsed. But some real estate experts and policymakers said there was no need for the temporary rule that was part of the governor’s state of emergency.
Supervisors Kathryn Barger, Janice Hahn and Holly Mitchell abstained from voting on the motion to extend the protection, while Supervisors Hilda Solis and Horvath supported it.
“I abstained because I did not see sufficient evidence to justify extending this emergency ordinance, nor did I see evidence to eliminate it entirely,” Hahn said.
Barger’s office said she supported allowing the protections to sunset while waiting to see whether new information emerged.
“Market data already shows countywide rents are only about 2% above pre-emergency levels and rental inventory has grown,” Barger representative Helen E. Chavez Garcia said. “The Supervisor is also mindful of the burden these ongoing protections place on small property owners throughout the county.”
Mitchell did not immediately respond to a request for comment.
There haven’t been steep rent hikes in neighborhoods within three miles of the Palisades fire, according to a Times analysis of data from Zillow, the property listing company.
In ZIP Codes within three miles of the Palisades fire, rent increased 4.8% from December 2024 to April 2025. In areas around the Eaton fire, which destroyed swaths of Altadena, rent jumped 5.2% in the same period.
In L.A. County, ZIP Codes farther from the fires saw only about a 2% increase.
A landlords representative, Jesus Rojas of the Apartment Owners Assn. of Greater Los Angeles, told the supervisors during public comment at the meeting that the county’s rent-gouging rules have “long outlived the emergency they were intended to address” and are now being “wrongfully used to harm thousands of rental housing providers throughout the county.”
“There is no proof that multifamily rental housing providers are hugely increasing rents for impacted homeowners,” Rojas said.
Indeed, there are strong signs that the property market in the Los Angeles area has at last begun to cool.
L.A. metro-area rent prices recently fell to a four-year low, with the median rent slipping to $2,167 in December.
Meanwhile, condominium sales had their slowest start of the year in decades. Condo sales in Los Angeles have plummeted to a 20-year low, with fewer than 2,000 units sold in January and February — the worst start to the year since 2005.
Newsom defended the price-gouging protections shortly after they went into effect.
“In the days following the Los Angeles firestorms, we worked quickly to protect Los Angeles survivors from any form of exploitation,” he said in February 2025. “The state has the tools in place to not only block price gouging during this emergency, but also to prosecute bad actors.”
The Los Angeles County Department of Consumer and Business Affairs said it received more than 2,000 complaints after the fires, alleging that retailers and landlords were taking advantage of people put in hardship by their losses, and sent out more than 2,000 cease-and-desist letters to businesses and landlords for alleged price gouging, said Morine Merritt, who oversees department investigations into consumer and real estate fraud.
“Close to 90% of the complaints that we received involved allegations of rent increases,” Merritt said in an interview. Now that the fire-related protections have expired, existing laws and “regular market conditions determine price increases for goods and services, including rents,” she said.
Crackdowns on fire-related rent gouging have been rare, said Chelsea Kirk of the activist organization the Rent Brigade, which analyzed L.A. County’s rental market in the year after the fires. It reported 18,360 potential examples of price gouging in listings but said that few lawsuits had been filed by authorities so far.
Last week, Rent Brigade announced what it said was the first private civil lawsuit brought by a family that claimed to be rent-gouged in the aftermath of the wildfires. Plaintiffs Randall and Candy Renick, whose Altadena home was damaged, said they were charged nearly three times the maximum permitted rate for nearly 10 months. They seek restitution of $96,000 plus civil penalties and attorneys’ fees.
The rental market has probably stabilized since the fires, Kirk said, but other families may still be “locked into illegal rents” that they agreed to pay when they were in a rush to find housing after they were displaced.
Business
Read Nick Bilton’s Letter to Scott Pelley
Dear Mr. Pelley:
I meant what I said in my letter last week to the 60 Minutes team: joining 60 Minutes is the honor of my career and I am grateful to be working alongside the people who have contributed to the most important television journalism brand this country has ever produced. While I’m new to 60 Minutes, I’ve devoted my career to investigative journalism and storytelling. I started this job excited to collaborate and to benefit from the wisdom and experience of the 60 Minutes veterans, with you among them. For that reason, one of the first things I did in my new role was call you to talk and invite you to dinner. It is a profound disappointment that you rejected that overture and chose ambush instead. Yesterday, you hijacked my first meeting with staff to disparage me, my qualifications, and my intentions with remarkable incivility and contempt. I welcome a diversity of viewpoints and respectful debate among the team, but this was nothing of the sort. Yesterday’s performative display of hostility enacted in front of the staff instead of in a civil, private conversation-demonstrated that you have no interest in contributing to the future success of the show, or approaching my new tenure with a mind open to collaboration and progress. I am here to deliver first-in-class news programming, not to make headlines about newsroom drama. I am eager to work alongside those who share this goal.
Despite yesterday’s misconduct, I had hoped that in sitting down with you today we could find a path forward together. You made clear that you are not interested in such a path.
Your antipathy to the future of the show has come through loud and clear. And I have heard you. I therefore write on behalf of CBS News, Inc. (“CBS”) to inform you that your employment with CBS is terminated for cause effective immediately. Enclosed is your formal termination letter.
Sincerely,
Nick Bilton
Executive Producer, 60 Minutes
Business
Aspiration co-founder sentenced to 14 years for fraud
The co-founder of Aspiration, Joseph Sanberg, was sentenced to 14 years in prison on Monday after defrauding investors and lenders of over $248 million.
The startup, an eco-friendly digital banking company boasting fossil fuel-free investments, carbon offsets for gas purchases, and a debit card with cash-back benefits for shopping at clean companies, was founded by Sanberg and Andrei Cherny. Cherny left the company in 2022 and has not been charged.
Sanberg, an Orange County native, pleaded guilty to wire fraud in October after being arrested in March last year. Aspiration subsequently filed for bankruptcy and liquidated all of its assets by July.
Sanberg and venture capitalist Ibrahim AlHusseini, who also faces charges, together forged a series of bank statements in order to obtain loans. From 2020 to 2021, the pair forged AlHusseini’s bank statements to show millions of dollars in assets in order to obtain millions of dollars from lenders.
Additionally, they forged a letter from their audit committee stating that $250 million in funds were available, when in reality Aspiration had less than $1 million. The amount of loans defrauded exceeded $248 million.
In 2021, Sanberg artificially inflated Aspiration’s 2021 revenue by $44 million by recruiting 27 fake customers to sign letters of intent pledging tens of thousands of dollars per month for tree planting services. Sanberg himself funded the contracts and used the inflated revenue numbers to obtain more loans.
The charges sparked an NBA investigation into salary cap allegations due to Aspiration’s connections with Clippers owner Steve Ballmer.
Ballmer personally invested $60 million in Aspiration, all of which was lost. He is now the target of a civil lawsuit alleging his participation in the scheme. Ballmer denies the allegations.
The team announced a $300-million sponsorship deal with Aspiration, and Clippers player Kawhi Leonard signed a four-year, $28-million marketing contract with the company, which reportedly performed no duties. The issue has raised concerns about how players are circumventing the NBA’s salary cap.
The team lost the $300-million sponsorship deal and an additional $20 million paid for carbon offset purchases.
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