CNBC Jim Cramer On Thursday, he said he expects a “tech exit” from California in the future, with one driver being tech leaders’ displeasure with their employees.
Kramer, who spent the week in San Francisco, said he’s heard that “many of the CEOs here have lived it up with younger workers telling them what to do, when and where they want to work.”
“They are tired of the workforce in San Francisco, which they think is full of spoiled clothes who were there one day and gone the next,” Kramer added. He didn’t mention the names of those executives he said he spoke with on air.
The “mad money“The host said such frustration could end up benefiting other parts of the country, with tech companies moving to areas of the country where they can hire talented people for less money — people who will have more business loyalty and accountability to the CEO, just because they have Fewer options to jump ship.”
However, Cramer noted that senior management’s issues with their employees aren’t the only reason tech companies plan to move away from Silicon Valley. Kramer noted that real estate in the San Francisco metro area is expensive, adding that he “heard Atlanta was mentioned several times, Austin is always in the mix, and of course Florida” as potential places to go.
Cramer also said he’s heard there will be layoffs in the tech sector, rivaling those that occurred after the dotcom bubble burst in the mid-to-late 1990s. At that time, highly speculative Internet stocks helped push Nasdaq Over 500% from 1995 until it all came to an end in March 2000. The tech-dominated index had been trading above 5000 before then dropping 80% to a multi-decade low of 1108 in October 2002.
Technology stocks fell on Thursday with rest of the market. The Nasdaq has plunged into a terrible bear market, defined by drops of 20% or more from previous highs. In fact, as of Thursday’s close, the index is down more than 25% from its all-time high in November 2021.
“Remember, the industry likes to pay people with stock options,” Kramer said. “But this is not a tempting form of compensation when stocks are constantly deteriorating.”