Is Austin's Tech Job Market on the Verge of Collapse? Here's What You Need to Know

As the Tech industry experiences layoffs, experts predict that Austin's diversified economy will help shield it from an economic meltdown.

The current job market in Austin is a bit confusing as sizable layoffs are happening, but other companies are in expansion mode.

Security contract firm Security Specialists Inc. and Israeli-based software company Wix.com are cutting jobs in Austin as they deal with economic uncertainty. Retail giant Walmart has shut down its Central Texas technology development office. Austin has been affected by layoffs at a number of major technology companies, though the exact number of local jobs that have been lost is uncertain.

Despite these challenges, Austin's unemployment rate stands at about 3%, compared to 3.6% nationally. The Austin Chamber of Commerce reports that Austin added 71,000 jobs, a growth of 5.8%, in the 12 months ending in January, making it the third-best performing among the top 50 metros.

Many believe that Austin is well positioned to weather the downturn, suggesting that Austin will feel the pain of tech layoffs initially, but will recover quickly.

The diversity of the Tech sector in the area also helps to cushion swings. Furthermore, state government and the University of Texas are sources of stability and, in the case of UT, ongoing expansion. All of these factors tend to benefit the Austin area, as does the rapid expansion in the overall area, and the ongoing expansion of tourism activity, such as South by Southwest.

Texas factory activity declined in February for the first time since May 2020, according to business executives responding to a recent Federal Reserve Bank of Dallas report. However, Austin could be an exception to the slowdown in factory production. Central Texas is experiencing a manufacturing boom, led by automaker Tesla, which opened a $1.1 billion facility in southeastern Travis County last year. In addition, tech giant Samsung is building a $17 billion semiconductor manufacturing facility in Taylor.

As of February 2023, there were over 40,000 unfilled job postings in the Austin region, according to data on Labor Insight. This number is up 1,500 from January.

While the tech industry in Austin is facing layoffs, the city's diversified economy, ongoing expansion and growing job market suggest that it is well positioned to weather the downturn. The Tech sector in Austin, along with the state government and the University of Texas, will likely benefit the area in the coming years, making Austin one of the best-performing regions in the country.

So in conclusion "No", Austin's Tech Job Market is not on the verge of collapse.

Good news indeed!