Seattle’s once-booming tech industry has reversed course. Mass layoffs are reshaping not just the job market but the city’s economy. Led by Microsoft and Amazon, the industry has cut tens of thousands of jobs, with little indication of a rebound.
The tech sector has long been Seattle’s economic engine. Over the past few decades, Amazon, Microsoft, and their peers transformed the city into a major global hub. But since 2023, Microsoft and Amazon alone have shed more than 46,000 workers, accounting for 85% of local tech layoffs. Redfin, Expedia, and other firms have followed suit.
The consequences extend far beyond the companies themselves. When highly paid tech employees leave the area, so do their paychecks, and the local economy feels the loss. Restaurants and retailers that rely on tech-driven demand are seeing sales decline, especially in shopping districts near Amazon and Microsoft campuses. Across the city, restaurant and retail spending is down, with 450 restaurants (16% of the total) closing in just the first half of 2025. Commercial real estate vacancies are rising, and new construction has come to a halt.
These cutbacks are straining city finances. Fewer jobs and less consumer spending are expected to leave Seattle with a $146 million revenue shortfall from reduced sales and payroll tax collections.
Despite the declining workforce, downtown Seattle’s foot traffic is stronger than in recent years as more companies enforce return-to-office policies. But busier sidewalks haven’t been enough to offset the deeper economic contraction caused by lost jobs and wages.
Signs of an industry bounce back appear bleak. Microsoft is openly investing in AI to replace human roles, while Amazon has warned of further cuts to come.
This post was based on information found on The Wall Street Journal.
