Young Silicon Valley workers are in for a rude awakening as industry giants make major job cuts and ditch ambitious projects for the first time in their careers
Stephen Lam/Getty Images
- The days of endless employee perks at Big Tech, like free laundry and private concerts, are coming to an end.
- Workers now fear layoffs after tech companies that hired thousands of workers with high pay face a slowing economy.
- "Winter is coming in the tech world," said one analyst.
The days of Big Tech excess are coming to an end.
Amid a streak of disappointing financial results, inflation, and international turmoil leading to battered tech stocks, companies like Meta, Google, and Microsoft are looking to rein in runaway costs.
For years, Big Tech companies have competed on pay and perks to lure workers in a tight labor market. Now, the endless hiring and allotments for employee travel, free food, and company swag are being replaced by budget cuts, new performance mandates, and even layoffs.
It's a first for many tech workers, an entire generation of whom have known nothing but non-stop growth and a bull market. To these employees, recent changes are "straight up heresy," as Bill Gurley, a veteran venture capitalist, put it in June. "During this rate-induced boom, competition for employees created a Disney-esque set of experiences/expectations in high tech companies."
There was something of an outcry at Meta, for example, when the company earlier this year decided to limit the timing for free meals at offices and took away the laundry service it offered to workers. Within two months, the company froze hiring. Now, employees are worried about it cutting headcount by as much as 20%, as managers warn workers of impending cuts, Insider reported.
Over at Google parent Alphabet, CEO Sundar Pichai told investors he is reviewing spending and projects "at all scales pretty granularly." The company has also put in place a hiring slowdown. In August, Pichai told employees there are "real concerns that our productivity as a whole is not where it needs to be for the headcount we have." Earlier, the company told managers not to approve employee travel and team offsites unless they are "business critical." Back in April, workers were getting a private concert by Lizzo just for returning to the office.
"It is a poorly kept secret in Silicon Valley that companies ranging from Google to Meta to Twitter to Uber could achieve similar levels of revenue with far fewer people," Brad Gerstner, CEO of Altimeter Capital, wrote in a recent open letter to Meta, asking that the company cut costs, especially in its metaverse pursuit. "I would take it a step further and argue that these incredible companies would run even better and more efficiently without the layers and lethargy that comes with this extreme rate of employee expansion."
This week, Elon Musk, known to be a demanding and mercurial manager, is expected to take over Twitter and make sweeping cuts to headcount. Anonymous employees at the company thought an open letter making a list of "demands" was something that could help them in their endeavor to remain employed. Instead, the company's chief privacy officer sent a companywide email informing workers of the "risks" associated with signing the document. All links to it quickly disappeared from company Slack channels, an employee told Insider.
Bucco Capital, a popular Twitter account that comments on tech and financial markets, called the Twitter letter "delusional," adding it may be "the true and final swan song of the decade long bull market."
Younger tech workers don't just have to fear losing perks. Their jobs may be on the line as well. Companies like Netflix, Microsoft, Oracle, Salesforce, and Snap have all laid off workers recently.
"Silicon Valley is seeing layoffs across the board for the first time since 2008," said Dan Ives, a tech analyst at Wedbush. "Winter is coming to the tech world."
Contributer : Business Insider https://ift.tt/7RJCe0z
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Friday, October 28, 2022
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