CNBC Jim Cramer On Thursday, he said he expects a “tech exodus” from California in the future, with one driver being dissatisfaction among tech leaders with their employees.
Cramer, who spent the week in San Francisco, said he hears “a lot of CEOs here have had it with young workers telling them what to do and when and where they want to work.”
“They’re tired of the workforce in San Francisco, which they think is full of spoiled morons who are there one day and gone the next,” Cramer added. He didn’t name those executives he said he spoke to off the air.
There “mad moneyThe 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 a lot less money – people who will be more loyal to the company and accountable to the CEO, if only because they will have fewer options to jump ship.”
However, Cramer noted that senior management’s issues with their employees aren’t the only reasons tech companies are considering moving away from Silicon Valley. Real estate in the San Francisco metro area is priced high, Cramer pointed out, adding that he “heard Atlanta mentioned a number of times, Austin is still in the mix, and of course Florida” as potential places to to relocate.
Cramer also said he heard there would be layoffs in the tech sector, rivaling those since the dot-com bubble burst in the mid to late 1990s. speculation 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 falling nearly 80% to a multi-decade low of 1,108 in October 2002.
Tech stocks fell on Thursday with the rest of the market. The Nasdaq has been mired in a terrible bear market, defined by declines of 20% or more from previous highs. In fact, as of Thursday’s close, the index was down more than 25% from its most recent all-time high in November 2021.
“Remember, the industry loves to pay people with stock options,” Cramer said. “But that’s not a tantalizing form of compensation when stocks continue to slump.”