CNBC’s Jim Cramer on Thursday said that he expects a “tech exodus” from California in the future, with one of the drivers being tech leaders’ dissatisfaction with their employees.
Cramer, who has spent the week in San Francisco, said he’s hearing that “many of the CEOs out here have had it with younger workers who’re telling them what to do and when and where they want to work.”
“They’re tired of the San Francisco workforce, which they think is full of spoiled nitwits who are there one day and gone the next,” Cramer added. He did not name these executives whom he said he talked to off-air.
The “Mad Money” host said that such frustration could end up benefiting other parts of the country, with tech firms “moving to areas of the country where they can hire talented people for way less money — people who will have more loyalty to the business and accountability to the CEO, if only because they’ll have fewer options to jump ship.”
However, Cramer noted that upper management’s issues with their employees are not the only reasons technology companies are planning to relocate away from Silicon Valley. Real estate in San Francisco’s metro area has a hefty price tag, Cramer pointed out, adding he’s “heard Atlanta mentioned several times, Austin is always in the mix, and of course Florida” as potential places to move.
Cramer also said he heard that there will be layoffs in the tech sector, rivaling those since after the dot-com bubble of the mid-to-late 1990s burst. At the time, highly speculative internet stocks helped propel the Nasdaq up more than 500% from 1995 until it all ended in March 2000. The tech-dominated index had traded above 5,000 before it then tumbled by nearly 80% to a multidecade low of 1,108 in October 2002.
Tech stocks tumbled on Thursday along with the rest of the market. The Nasdaq has been mired in a terrible bear market, defined by declines of 20% or more from prior highs. In fact, as of Thursday’s close, the index was down more than 25% from its most recent all-time high back in November 2021.
“Remember, the industry loves to pay people with stock options,” Cramer said. “But that’s not an enticing form of compensation when the stocks keep getting pulverized.”
