CALIFORNIA, USA — After sweeping cuts at Twitter and layoffs at Meta, formerly known as Facebook, some analysts say the fallout could have a far-reaching impact for California.
"That means the Governor and the legislature have two choices, either raise taxes or cut programs. I don’t think they want to do either,” said Steve Swatt, political analyst.
A software engineer, who doesn’t want to be identified, is one of 11,000 Meta employees who received an email this week learning they were just laid off.
"Everyone is anxious because we knew it would happen, but we didn't know when it would happen," the former employee told ABC7.
It all comes as nearly half of Twitter's workforce is now gone after new owner Elon Musk gave out pink slips to thousands of employees Friday.
The billionaire said Twitter is losing $4 million a day. Ad revenue is also down as some major companies temporarily paused advertising on the site; many are waiting to see how things shake out under this new leadership.
RELATED: 'A good chance Twitter will not survive': Musk ends remote work as staff quit, advertisers step back
"The easy thing is buying Twitter; the hard thing is fixing it," Dan Ives, a managing director of equity research at Wedbush, an investment firm, told ABC News.
Swatt warns the problems in Silicon Valley might end up being felt across the state. He said much of the California budget depends on tax revenue from the wealthy.
The California Department of Finance does not deny that these layoffs could be costly.
"Our economists at Finance are obviously monitoring these developments as they continue their work to finalize our economic forecast that will be reflected/incorporated in the Governor's January budget proposal," a Department of Finance spokesperson told ABC10. "Since these tech layoffs have just occurred within the last few days it's too early at this point to estimate with precision the extent to which they may have a revenue impact. Our experts will be analyzing additional data as it becomes available in the coming weeks."
Swatt said when there are layoffs and people out of work, that also makes an impact on taxes.
"At the same time for the first several months of this fiscal year, tax receipts going to the state of California are much lower, about $7 billion lower than expected,” he said.
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