California now has one of the nation’s worst jobless rates, with the Bay Area and state both losing thousands of jobs during June, according to a new report.

Employers slashed a net total of 6,800 jobs in the Bay Area last month, the state Employment Development Department reported Friday.

“The Bay Area labor market continues to deteriorate, losing jobs and struggling to create any new ones,” said Scott Anderson, chief economist with BMO Capital Markets. “The net job losses last month were widespread across the region and surpassed the job losses seen at the state level.”

Other metro regions in California added jobs, offsetting some of the impact of the setbacks in the Bay Area. San Joaquin County, Orange County, and Los Angeles County each gained 800 jobs in June, while the Riverside-San Bernardino region added 1,000 jobs.

According to Friday’s EDD report, California as a whole had a net loss of 6,100 jobs in June.

“What stands out from today’s state jobs report is how California is falling further behind other states in terms of employment and job growth, and how the Bay Area is not serving as the main engine of job growth in the state,” said Michael Bernick, an employment attorney with law firm Duane Morris and a former director of the state EDD.

The Bay Area’s recent job losses mark two straight months of employment declines in the region, according to the EDD.

The South Bay lost 3,300 jobs, while East Bay employers slashed 2,900 positions, and the San Francisco-San Mateo area lost 700 jobs, according to the EDD report. All numbers were adjusted for seasonal volatility.

In the North Bay, Sonoma County gained 400 jobs, Marin County lost 100 positions, Solano County lost 200 jobs, and Napa County experienced no change in its totals during June.

The tech industry accounted for well over half of the Bay Area’s job losses, according to estimates that Beacon Economics derived from the official EDD seasonally adjusted numbers.

In June, the industry lost 4,700 jobs with 1,800 affected in the San Francisco-San Mateo metro region, 1,700 in the East Bay and 1,300 in the South Bay, Beacon estimates show.

Those estimates also show that hotels and restaurants lost 100 jobs.

Construction, however, boomed in the Bay Area in June, adding 2,800 jobs. They increased by 1,000 in the South Bay, 1,000 in the San Francisco-San Mateo region, and by 700 in the East Bay, Beacon estimates show.

“The Bay Area economy continues to struggle against several factors,” said Steve Levy, director of the Palo Alto-based Center for Continuing Study of the California Economy.

Levy added that these factors include “tech layoffs, the impact of tariffs on ports, jobs and visitors, lack of housing and affordability, high long-term interest rates and declines in federal funding.”

Russell Hancock, president of San Jose-based think-tank Joint Venture Silicon Valley, said internal factors have impeded the region’s employers in a significant way as well.

“There are also very significant factors that are internal, and we have to own them,” Hancock said. “Our driving industries in the tech sector have become cautious and incremental, disinclined to invest in this turbulent environment, bent on an efficiency-led approach to profitability. So far that approach is working.”

The Bay Area’s cost of living is also coming into play.

“In former times our employers would grit their teeth and add to the local workforce despite the high cost,” Hancock said. “Today, it’s possible to be a Silicon Valley company but to grow your workforce across a network of locations, and patch it all together with the communications tools that we invented.”

The California unemployment rate worsened to 5.4% in June, an increase from the 5.3% rate in May, the EDD reported. The state tied Nevada with the highest rate among the 50 states, this news organization’s review of information posted by the U.S. Bureau of Labor Statistics shows.

In sharp contrast, Florida reported an unemployment rate of just 3.7%, while Texas posted a 4% jobless rate.

During the first half of 2025, California lost 21,300 jobs, according to an analysis by this news organization of EDD job statistics. The Bay Area lost 25,300 jobs during the same period.

Over the first six months of 2025, the San Francisco-San Mateo metro area lost 10,200 jobs, the East Bay shed 8,300 positions, and the South Bay lost 6,100 jobs.

“In the past, we always waited for that next wave of innovation to create another Silicon Valley boom,” Hancock said. “That new wave has arrived, and it’s artificial intelligence, but this time it isn’t a job creator. It creates economic growth, but it doesn’t necessarily create jobs.”

Employment declines have hounded California and the Bay Area with regularity this year.

“A high cost of living and waning job prospects are threatening to hobble Bay Area consumers and the region’s economy,” Anderson said. “The Bay Area labor market is now seriously lagging the state’s performance and is even further behind the nation’s.”