The vast majority of those startups are Web/Mobile/Social/Gaming startups. Take 100 startups with $500k in the bank looking for one two three (web/mobile/flash) developers and you have a rough idea of what the hiring market is like in SF. Add Facebook, Linked In, Twitter, Yelp and Google starting to compete more heavily for engineers, and you'll start to see why recruitment is going to get a lot tougher in the next year or two for startups.
From Mountain View South to San Jose and in the East Bay, the startups have traditionally been more hardware/silicon oriented. Those industries have been consolidating a lot, and those companies have been laying off people. It's people that come from those industries that have gotten laid off.
The 60 minutes episode talked about the San Jose area, and if you read the article , it primarily talks about older workers who were in PR, office managers, personnel, etc...
All that to say, is that after we get funded, we're going to be staying in San Jose. Office space is cheaper, housing is cheaper. It's a lot easier to get around by car. There's parking for less than $20/3 hours. And, there's a lot of experienced talent that's looking for work.
In general terms, it's my impression that the days of the US VC funded, high capital requirement hardware startup are over with the closing of the IPO window.
Lots of HN style consumer internet companies can hope to get bought by Google, Facebook, Twitter, whatever, or just thrive on organic growth since their up front capital costs are relatively modest.
As I keep asking, who's going to be able to create the next thing like FPGAs? (As least in the US.)