Compared to what came before, 2022 hit like an earthquake to the thousands of people who made their names and fortunes working in Silicon Valley—a shocking wake-up call that the party is ending, if not over, and that the industry’s bosses are in the process of overhauling the social contract in a way that best befits themselves.
Over the preceding decade, a tech-friendly economic environment, stemming from the low interest rates meant to pull the country out from the financial crisis, had presented a clear opportunity to develop countless numbers of billion-dollar companies and stack life-changing amounts of wealth. It seemed, at times, as if the tech industry had been granted a blank check to fund dreams, providing Silicon Valley with the financial runway to think big for now and about profit later.
With the preciousness of the moment clear, those in power began a battle to hire (and then keep) the workers they needed to make those dreams a reality. And so, they kowtowed to the people beneath them, raising salaries, promising future riches in the form of stock-based compensation and otherwise creating an environment that said their company was the place to be. Raucous parties, on-tap kombucha, free laundry, and the like became the norm, and the workers were told all but they could do no wrong.
This was not a matter of kindness so much as competition, one undertaken never entirely comfortably by the bosses, who gave hints here and there that they were cultivating a coddled workforce that had begun to expect, not appreciate, the, say, in-office chefs and masseuses.
And so, when the good times began to end this year and the sector entered what The Atlantic’s Derek Thompson has labeled “a software recession,” first via a series of carefully leaked corporate messages and then through retrospectively inevitable layoffs, it was hard to see the shift as corporate belt-tightening alone. It was, and is, a matter also of reclaiming power—an admission, of sorts, that they had ceded too much ground during the boom times of the 2010s and wanted to pull the pendulum back in their favor. Publicly, the bosses often said it was their fault, that they had over-optimistically overhired under the wrongheaded assumption that the COVID-19 pandemic had changed the world, pushing it forever further online.
“I got this wrong, and I take responsibility for that,” Meta CEO Mark Zuckerberg said as he laid off 11,000 people last month. What went unstated in that message and elsewhere was that he had begun a cultural reset months earlier, around when his lower-rung henchmen began to write things like, “If a direct report is coasting or a low performer, they are not who we need; they are failing this company.”
Meta got rid of the free laundry, dry cleaning, and Lyfts and reduced the food budget and wellness benefits, and others followed a similar blueprint. Google, for example, decided to only allow “business critical” trips and reduced swag budgets. The decisions led workers to question CEO Sundar Pichai, asking why Alphabet, Google’s parent company, was “nickel-and-diming employees.”
“I remember when Google was small and scrappy,” he said. “We shouldn’t always equate fun with money.” But it wasn’t only about tightened budgets. Alphabet also implemented a new system that required 6 percent of its workforce receive a negative performance review, much more than the 2 percent it previously required.
Alphabet’s move was so similar to those of other companies that it started to look more like a playbook than anything else. Snap, Snapchat’s parent company, told its own managers that they had to put at least 10 percent of staff on performance-improvement plans early in the summer, a first step toward layoffs, which it undertook in late August. Salesforce reportedly asked managers “to update a ranking of their bottom 10% of employees.” Netflix, for its part, shifted its hiring focus to younger (read: cheaper) workers and limited the amount of corporate merchandise it would hand out.
This was not a matter of kindness so much as competition, one undertaken never entirely comfortably by the bosses, who gave hints here and there that they were cultivating a coddled workforce that had begun to expect, not appreciate, the, say, in-office chefs and masseuses.
And so, when the good times began to end this year and the sector entered what The Atlantic’s Derek Thompson has labeled “a software recession,” first via a series of carefully leaked corporate messages and then through retrospectively inevitable layoffs, it was hard to see the shift as corporate belt-tightening alone. It was, and is, a matter also of reclaiming power—an admission, of sorts, that they had ceded too much ground during the boom times of the 2010s and wanted to pull the pendulum back in their favor. Publicly, the bosses often said it was their fault, that they had over-optimistically overhired under the wrongheaded assumption that the COVID-19 pandemic had changed the world, pushing it forever further online.
“I got this wrong, and I take responsibility for that,” Meta CEO Mark Zuckerberg said as he laid off 11,000 people last month. What went unstated in that message and elsewhere was that he had begun a cultural reset months earlier, around when his lower-rung henchmen began to write things like, “If a direct report is coasting or a low performer, they are not who we need; they are failing this company.”
Meta got rid of the free laundry, dry cleaning, and Lyfts and reduced the food budget and wellness benefits, and others followed a similar blueprint. Google, for example, decided to only allow “business critical” trips and reduced swag budgets. The decisions led workers to question CEO Sundar Pichai, asking why Alphabet, Google’s parent company, was “nickel-and-diming employees.”
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