Management Consulting Services NAICS 541611

May 22, 2025 - Tech Industry Moving Out of Regional Hubs

• The technology industry is slowly moving back to coastal bases of operation as the trend of growing regional tech hubs in cities like Austin, Texas abates, according to a report from venture capital firm SignalFire. Austin in particular, which had been luring California-based tech companies with promises of lower taxes and quality of life improvements, saw tech employment fall 1.6% in 2024 and startup employment fall 4.6%. Other regional hubs including Dallas, Houston, Toronto, and Denver also saw shrinking tech employment, while employment grew in coastal locales of New York City and San Francisco. Return-to-office mandates in regional areas, along with AI-driven businesses increasingly centralized in the Bay Area has employees and employers ditching regional aspirations and moving out. San Francisco saw tech employment increase 1.8% in 2024, while New York City, which grew 2.2%, is luring AI companies seeking to sell to large enterprises.
• A global workplace report from Gallup found that while remote workers are more engaged than their hybrid or in-office counterparts, they feel more work-related stress and are less likely to thrive in their lives. Fully remote workers are 31% more likely to be engaged in work (measured as enthusiasm for their job and attachment to their team/organization), compared to hybrid roles (23%) and on site employees (19%). The freedom of remote work comes with psychological downsides, per the report, with feelings of isolation giving way to overall stress about their jobs, loneliness without the camaraderie of in-person coworkers, too much autonomy leading to time management problems, and frustrations with the technology required to collaborate. The results were consistent across salary ranges. Companies that prioritize addressing these issues have only 38% of employees looking for new job opportunities, building more sustainable and better long-term performance.

• Revenue for management, scientific and technical consulting services rose 7% over the previous year to $424.7 billion, according to the Bureau of Labor Statistics, amidst growing demand for AI and related data technology services. Companies are seeking out expensive consulting help to expand the use of what are fast becoming standard tools such as clould computing, cybersecurity, and AI-based data analytics and automation. Less demands by the US government on private corporations to combat climate change has many firms taking sustainability initiatives into their own hands and increasing demand for management consultants to offer more services in the areas of climate strategy, supply chain transformation, and navigating the ever changing world of regulatory compliance throughout the world. Consulting firms are also expanding into managed IT services as a means to achieve lines of stable, recurring revenue.
• Companies are cutting their middle management ranks to streamline operations and save money, according to a recent survey on employee and employer power dynamics by Korn Ferry. About half of the 15,000 professionals surveyed report middle management cuts in their organization. But removing that layer can make rank-and-file employees feel directionless and forces senior leadership into a more operational role than a strategic one. Accordingly, about 72% of US senior management told Korn Ferry they are, “stretched beyond their capabilities.” The survey also found that employees are not fans of return-to-office mandates, with 64% of professional workers saying they prefer a hybrid model instead. Pay is always a source of tension between employees and management, and while 66% of those surveyed were satisfied with their compensation, 72% feel that cost of living increases in the larger economy will cut into their earnings.