(The Center Square) – Seattle has lost some of its economic luster in the form of a slew of recently announced tech layoffs, pushing regional unemployment higher than the national average.
Whether this tech sector gloom is a mere course correction or a harbinger of a more serious economic downturn remains to be seen.
But there can be no doubt that the Emerald City has taken some economic hits in this new year.
On Wednesday, Seattle-based Amazon announced it is laying off approximately 16,000 corporate employees globally as part of its restructuring efforts to streamline operations and reduce bureaucracy.
Amazon had also previously announced it is closing all its Amazon Go and Amazon Fresh physical stores, with operations ceasing by Sunday. The closures affect nearly a dozen Amazon-branded stores in the Seattle region. The company plans to focus on delivery and its subsidiary, Whole Foods.
Expedia Group, the Seattle-based travel technology company, will lay off 162 employees from April 1 through April 19, according to a working adjustment and retraining notification, or WARN, filing posted by the state Employment Security Department on Wednesday.
According to a WARN filing earlier this month with the state, Meta – the multinational technology conglomerate and parent company of Facebook – will lay off 331 employees across the greater Seattle area, including Bellevue and Redmond, effective March 20. The layoffs primarily affect the company’s Reality Labs division and are part of a broader 10% workforce reduction there.
The Center Square reached out to the Seattle Metropolitan Chamber of Commerce for comment on the layoffs and what it could mean for Seattle, but was told that “Joe and most of the leadership team are on a delegation trip to India through next week…”
Joe Nguyen, a former state senator, is the president and CEO of the Seattle Metropolitan Chamber of Commerce.
“I am very nervous about what’s happening,” Nguyen told KIRO 7 about the job losses. “I think there’s a lot of uncertainty, we’re competing globally, and we don’t have an environment right now where I think the political community and the business community are working very well together.”
Patrick Connor, Washington state director for the National Federation of Independent Business, worries that Seattle-centric policies – specifically high taxation, strict regulations and potential statewide expansion – are negatively affecting Washington’s economic climate.
He noted that “Seattle’s economic wounds are almost entirely self-inflicted,” and worried that “the spread of these Seattle-centric policies to the rest of Washington state … is already showing similar, dire economic trends throughout our state.”
The contrast between the national small-business climate and the Seattle-area economy is stark, according to Connor.
“In most of the rest of the nation, small-business owners are largely optimistic,” he said. “Their biggest problem is finding enough qualified applicants to fill job vacancies. Conversely, jobs are fleeing the Seattle area, and state economic forecasters expect a zero-growth rate for job creation over the next year or two.”
Data from late 2025 and early 2026 indicate a significant decline in Seattle’s job market, with the metro area experiencing the second-worst drop in job postings in the U.S., down 35% since 2020, according to Metaintro.
Connor singled out Seattle’s JumpStart tax, enacted in 2020, as a problem.
The payroll expense tax rates range from 0.746% to 2.557%, depending on company payroll size and employee compensation levels. The tax applies to businesses with annual payroll expenses of $129,634,413 or more, targeting compensation of $194,452 or more per employee.
“Seattle’s JumpStart tax on jobs has employers leaping across Lake Washington to relocate workers to the Eastside,” Connor said. “Bills to impose a similar tax statewide will have a similar effect: forcing employers to move their operations to states with friendlier tax and regulatory climates.”
House Bill 2100 in the Washington State Legislature, sponsored by Rep. Shaun Scott, proposes a 5% payroll excise tax on large Washington employers for employee salaries exceeding $125,000 annually.
Democrats in the Legislature are also working on a “millionaire’s tax” that would result in a top marginal rate of more than 18% for high-income earners in Seattle, based on the combined effects of several state and local tax layers, making it the highest in the nation.
“The tech side layoffs are caused by AI and normal downsizing; however the tech companies are certainly looking at other states to relocated employees to,” Mark Harmsworth, director of the Small Business Center at the Washington Policy Center think tank, emailed The Center Square. “I suspect we will continue to see small layoff batches this year (quiet quitting) and at some point something more significant if Olympia continues to pursue the head, wealth and income tax direction.
“If they pass an income tax, I expect to see a significant investment by one of the big companies in a different state. They will have to hedge the bets on what comes next by moving the most valuable resource (employee tech skills) to a new location to protect against an employee exodus from WA. Once the brain drain reaches a point where there are other markets that have significant tech jobs (look at CA and the drain to WA) – it will accelerate.”
In the Seattle-Tacoma-Bellevue region, the jobless rate climbed to 5.1% in November, according to the U.S. Bureau of Labor Statistics, topping the national unemployment rate of 4.5%.
