Tech giants have begun laying off blue-collar contractors: report

Tech giants have begun to cut their blue-collar contractors in the food service and transportation industries amid the surging pandemic, a move that could leave them without health care, according to a report obtained by The Washington Post.

Big tech companies were among the first in the country to allow their white-collar employees to work from home indefinitely when the pandemic hit. And, following backlash about the impact that would have on blue-collar workers, some firms also pledged to continue to pay them as well, according to the newspaper. 

However, several Bay Area firms, including Electronic Arts, LinkedIn, Salesforce and Nvidia, have terminated contracts with transportation providers in recent months, while Yahoo cut more than 120 cafeteria jobs at its Sunnyvale, Calif., facility.

In a report released Thursday, the labor advocacy group Silicon Valley Rising projected up to 12,000 workers could find themselves without health coverage if the trends continue on their current trajectory.

The report found the loss of such jobs would exacerbate the region’s racial disparities, noting that about 63 percent of blue-collar workers at tech companies are Latino or Black and that about 12.1 percent of Latino men in Silicon Valley are employed in the service, security or janitorial sectors.

Nearly 9,000 tech service subcontractors in the Silicon Valley have joined unions in the last five years, the report notes.

Due in large part to these organizing efforts, the tech sector is one of few where blue-collar workers largely have quality job-based health insurance. About 93 percent of unionized tech cafeteria workers are insured through their employer, according to the report.

“If tech companies make the decision to permanently lay off those workers — perhaps replacing them with new, lower-paid contractors when campuses eventually re-open — the region may see long-term, even permanent increases in racial income disparities, housing access, and potentially acceleration of the already severe displacement crisis,” the report states.

The news of layoffs comes as the work-from-home model for white-collar workers in the tech industry and beyond could outlast the pandemic, lessening the need for blue-collar workers in large office spaces.