Seattle, once known primarily as the birthplace of a major coffee chain, Boeing and grunge music, has undergone accelerated transformation in recent decades due to the growth of Microsoft and Amazon, turning it into one of the leading tech hubs in the United States. However, this positive cycle is now starting to shake.
Amazon and Microsoft, together with Boeing, are the largest private employers in the state of Washington. The two tech giants employ almost 40 percent of the local tech workforce in the Seattle area. For comparison, Google and Meta, two major tech companies in the San Francisco Bay Area, account for nearly 15 percent of the tech workforce there. Seattle ranks second after San Francisco in the percentage of software developers and other tech workers employed in the industry, according to CBRE, a company specializing in analyzing US employment data.
Despite this, under the leadership of Amazon and Microsoft, companies across Seattle have gone through round after round of layoffs in recent years, releasing tens of thousands of employees. For the first time in 2024, Amazon laid off more employees than it hired in Washington State, while Microsoft added only 3,000 employees across the US since 2022, despite almost doubling its market value in that period.
Together, the two companies have laid off more than 46,000 employees since 2023, according to Layoffs.fyi, which tracks workforce reductions. This represents 85 percent of tech layoffs in the Seattle area. “For a long time, we simply thrived,” said a former tech industry executive in Washington. “The state thrived, Seattle thrived. It was not always meant to last. When it reversed, it was a very significant blow.”
The tech employment cutbacks are felt across Seattle’s economy. Spending in restaurants and retail has dropped in popular areas, commercial real estate occupancy is at a low as offices built for the tech boom stand empty, home prices are stable, and home sales are frozen, although the tech sector is not the only factor.
The expansion of Seattle’s tech industry has driven a strong real estate market since 2012. That trend is now shifting. In King County, which includes Seattle, the average time a home remains on the market has doubled since 2022, and the number of homes for sale in August rose 31 percent compared to the previous year, according to state data.
The restaurant sector, which benefited from tech employees visiting local businesses, was also hit significantly. In the first half of 2025, about 450 restaurants closed in Seattle, roughly 16 percent of the total.
Despite the gloom in the labor market, central areas of Seattle feel more vibrant than they have in years, as companies return employees to offices.
Foot traffic in downtown in June reached its highest point since 2020. Amazon enforced a five-day workweek in the office, while Microsoft recently increased its office requirement to three days.
The future looks uncertain for many tech workers, as companies turn to tools that improve team efficiency, including artificial intelligence. Microsoft’s CEO noted that the company is relying more on AI for coding and other tasks that were previously performed by humans. In June, Amazon announced plans to reduce its workforce even further.
Some laid-off employees have started their own companies. One former worker founded a tool, toy, and baby equipment rental company as a backup while still employed at Microsoft. This is now his main source of income. Others, even those with high-paying development roles, submit resumes for minimum wage jobs in cafes to make ends meet, hoping the tough period will pass and they can return to their profession in the city they love instead of moving across the US to find a tech job.
Seattle’s story is a reminder that even thriving tech areas are not immune to economic cycles and technological shifts, and when the giants falter, the tremors are felt across every corner of the urban fabric.