Seattle is witnessing a curious position reversal in its financial narrative. Whereas town lastly beneficial properties floor on perennial challenges like crime and transportation, its conventional development engine — the tech sector and downtown employment — is starting to sputter.
Town has for years been a tech, retail and humanities hub, however its complete downtown jobs peaked in 2019 with greater than 340,000 employees. Because the pandemic, that quantity has been creeping downwards, hitting roughly 317,000 jobs — which is roughly on par with 2018 numbers, in accordance with a new report from the Downtown Seattle Affiliation (DSA).
“We’re going within the incorrect course,” mentioned Jon Scholes, DSA president and CEO, on the group’s annual State of Downtown occasion on Wednesday.
“Over this era the place we’ve seen a lower in jobs, we’ve seen a report enhance in taxes that employers within the metropolis of Seattle are paying — that employers aren’t paying in Bellevue and different cities in our area,” he added. “We now have change into an outlier in relation to the price of doing enterprise in our metropolis.”
These prices embody town’s JumpStart tax, which targets the payrolls of huge employers with excessive‑incomes staff, in addition to final yr’s restructuring of Seattle’s tax on gross income that shifted the burden from smaller companies to giant ones. Additionally on the horizon is the brand new state earnings tax on wealthier people that lawmakers simply handed.
Taxes are taking a variety of the blame, however different main forces are at work as nicely. Throughout the nation, firms are reducing headcount as AI instruments substitute some roles, financial uncertainty lingers, and leaders transfer to trim what they see as pandemic-era company “bloat.”
That mentioned, key elected leaders on Wednesday acknowledged considerations about rising taxes and authorities budgets.
“I very a lot recognize that it isn’t supreme for our tax setting for companies to be wildly out of step with neighboring jurisdictions,” Mayor Katie Wilson informed the packed corridor on the Seattle Conference Heart.
Wilson and King County Government Girmay Zahilay each pledged to scrutinize their governments’ budgets. Wilson mentioned she expects to make “important” cuts and Zahilay plans to construct the county’s spending plans “from the bottom up” moderately than following the mannequin of rolling previous budgets ahead.
The fiscal warning comes whilst town’s social metrics development upward. The 2025 DSA report highlighted a number of vivid spots:
- Crime: Incidents and violent crimes have decreased downtown since a 2021 peak.
- Residential Development: The variety of downtown residents has reached almost 110,000 — an 80% enhance over the previous 25 years.
- Guests: Greater than 15.3 million distinctive guests got here to downtown — a rise from 2019, however flat in comparison with the yr earlier than. Persons are additionally visiting extra ceaselessly.
- Transit: Mild rail boardings at downtown stations jumped 23% over 2024.
And but that residential and customer vitality hasn’t but translated right into a full-scale restoration of the Monday-through-Friday workforce. Regardless of return-to-office mandates, each day employee foot visitors averages simply 145,000 — nonetheless nicely beneath the 226,000 employees on common who crammed downtown streets every day in 2019, in accordance with DSA.
Amazon has helped with the rebound, however a number of rounds of layoffs have dampened the impact.
As soon as Seattle’s largest employer, Amazon not too long ago misplaced that crown to the College of Washington, the Seattle Instances reported. The corporate had a peak of about 60,000 employees within the metropolis in 2020, however that headcount has slumped to lower than 50,000. That determine may dip additional as Amazon this spring is vacating a seven-story, 251,000-square-foot leased house in downtown.
Past the tech giants, the broader business panorama is combating a rising quantity of empty workplace areas. Downtown vacancies reached a brand new excessive of 34.7% within the final quarter of 2025, in accordance with CBRE. Earlier than the pandemic, that quantity was hovering round 8%.
Regardless of these headwinds, the contractions aren’t common. Some corporations are doubling down on town’s core: Impinj not too long ago renewed and elevated its downtown workplace house whereas DAT Options and Docker each took sublease house alongside town’s waterfront.
In an interview after the occasion, Scholes emphasised that the well being of the whole financial ecosystem depends upon these main anchors.
“We’d like huge employers within the metropolis,” he mentioned. “I used to be with some small companies earlier this week, and so they mentioned, ‘You already know, our greatest prospects are huge employers. They’re our lifeblood … In case you’re a restaurant, for those who’re a barbershop downtown, you’re counting on individuals in these higher flooring.”
