(Bloomberg) -- Job cuts at Amazon.com Inc. and Microsoft Corp. are the latest blow for the Seattle region, which is still struggling to recover from a pandemic-era decimation of the commuter economy that, as in many cities, is the lifeblood of America’s second-largest tech hub.

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The number of jobs lost—at least 28,000 globally between the two companies—may seem minor for a region that employs more than 2.1 million. But it’s a psychological blow that will make investors hesitant to start new projects and businesses even more reluctant to re-open or expand.

Before the pandemic, cranes building new office towers dotted the skyline, and Seattle’s biggest problem was finding enough room for all the tech industry transplants. The city consistently ranked among the fastest-growing in the country, adding more than 128,000 people from 2010 to 2020. Now a growing glut of empty office space downtown suggests things will likely get worse before they get better.

In a potentially ominous sign, Amazon plans to vacate a 28-story office tower on 8th Avenue when the lease expires in April and relocate 2,000 employees. The company said the job cuts haven’t affected its real estate decisions and that it’s cutting space because more people are working remotely.

“This downturn in tech is going to be devastating for Washington, and the long-term effects will be quite profound,” said Jeff Shulman, a marketing professor at the University of Washington. “Tech companies have fueled so much growth and change that when they tap on the brakes and go in reverse, it puts everything else in peril.”

After 2010, Amazon singlehandedly transformed Seattle’s South Lake Union neighborhood from a hodgepodge of warehouses and garages into a ritzy district of bars, burger shops, apartments and salons. The company quickly filled the available space and marched closer to downtown with new office towers and an architectural statement: biospheres that resemble massive Christmas baubles, filled with plants and trees where employees can relax.