Tech professionals have had it made for years. Software engineers and other tech workers in Silicon Valley have earned hefty total compensation packages. Factoring in stock grants and options, many people who were at the right firm at the right time realized windfall fortunes.
In addition to being exceedingly well-paid, people working at places such as Google, Apple, Meta, Microsoft and Salesforce were pampered with free food, nap pods, massage and yoga rooms, free laundry and shuttle services to and from the office and other amenities that made working in the office feel better than being at home.
The new austerity era, caused by runaway inflation and rising interest rates, has changed the power dynamics. Instead of being catered to, tech workers have been laid off, placed on performance improvement plans and labeled as “subpar” or “low performers,” which are euphemisms for management looking to push you out the door. With nearly 130,00 tech workers getting the ax in 2023, the feelings of fear, uncertainty and doom are pervasive. To a lesser extent, tech talent is facing a “perk-cession,” according to the Wall Street Journal. Workers feel slighted that they’ve lost the lush amenities they have grown accustomed to.
Pretending To Work At “Fake Jobs”
Keith Rabois, a general partner at Founders Fund, known for his big wins in investing in PayPal, LinkedIn and Square at early-stage investment rounds, has called out the “fake work” culture at tech companies.
Rabois contends that many people at Meta, Google and other well-known tech companies were hired unnecessarily. The rate of over-hiring talent was not on pace with the growth rate, but rather a “vanity metric,” according to Rabois. Many of the hires were made because bosses wanted to build a fiefdom around them to feed their egos and brag about how important they are. Rabois asserts that tech giants hoard talent to keep key people from leaving for a competitor or building a startup to compete with the former company. The venture capitalist’s theory is that workers implicitly understood and capitalized on the game. They knew they wouldn’t be fired and could coast throughout the day.
In a swift change, the tech sector woke up to a new, more cost-conscious environment. As borrowing costs skyrocketed, leadership couldn’t continue their profligate ways. This new reality and mindset resulted in thousands of workers losing their jobs in the tech industry.
Google Is Setting Up A Battle Royale Among Workers
At Google, a new policy will make it harder for Googlers to advance within the organization. The staff was told fewer people would be offered senior-level promotions this year.
In an effort to rein in runaway expenditures, the search giant’s decision to bolster fewer workers to senior management is “to ensure that the number of Googlers in more senior and leadership roles grows in proportion to the growth of the company,” according to an email sent to Google staff on Monday.
With fewer promotions available, the tech behemoth is not so subtly pitting workers against each other. Software engineers and other tech professionals must substantially improve their productivity. If they don’t aggressively exceed their manager’s expectations, there may not be a path forward within the company.
In January, Google let 12,000 employees go via a cold email. According to reports, there was no clarity over why people were selected for downsizing. Google workers were not told if it was due to their ratings, compensation or tied to any specific metrics. CNBC reported, “Employees have flooded Dory, the company’s question-asking platform, and set up virtual communities to figure out who’s been laid off and why.”
In a memo to employees, Amazon CEO Andy Jassy ordered his workforce to return to the office at least three days a week. Jassy plans to implement this change effective May 1. In the directive to his staff, the chief executive told his employees that it’s easier to strengthen the company culture and learn from one another when immersed in projects and activities with co-workers. He believes workers will be more engaged when in an office setting together.
Jassy now has the upper hand. Up until recently, the Great Resignation and war for talent raged. It was hard for employers to find and retain top talent. Tech companies needed to do whatever it took to recruit and hold onto them. Professionals in this space are growing concerned. If employees push too hard to remain working remotely, there is a chance they could be next on the list for downsizing. The threat is real and frightening, as Amazon has begun what is being deemed its most significant round of job cuts in the company’s 28-year history. The layoffs are expected to impact more than 18,000 employees.
The remaining Amazon office workers may see a decline in total compensation. Like most tech companies, the online-retailing giant pays its people a salary and a sizable amount of restricted stock units. When the stock price soars, the employees could reap a windfall. However, when the stock price drops, which has happened, it could cause all-in total compensation pay for 2023 to fall between 15% and 50% lower than what Amazon predicted the target prices to be, the Wall Street Journal reported.
This tactic will goad people into leaving by attrition and save the company from paying large severance packages, as Zuckerberg is focused on implementing cost-cutting initiatives. If these measures don’t influence people to leave and seek other opportunities, there may be another wave of layoffs.
In November, Meta cut 11,000 jobs, representing around 13% of its workforce. Getting laid off can be a traumatic event. The loss of a job and concerns about financial insecurity cause stress and anxiety to affected workers and their families. To compound the problem for people in between jobs, prior to layoff announcements, companies like Meta, Salesforce, Amazon, Google and others discussed or encouraged letting go of low performers.
Being deemed a low performer—a pejorative term that has a connotation of not meeting expectations and being considered in the lower end of the workforce—is a red flag signaling you may be selected for the next round of downsizing. The people labeled as low performers are put on performance improvement plans. Others are subjected to the much-debated stack-ranking process. If they are measured as performing lower than their cohorts, they’ll likely be nudged out the door.