As Elon Musk proves once again on Twitter, Big Tech has always had problems with layoffs.
In fact, Big Tech has always struggled to come to terms with a reality in which it is not a deity basking in the glow of the California sun, somehow impervious to the ordinary difficulties of current affairs.
But now, as the facade crumbles and industry shortcomings are laid bare, it is ultimately tech employees who are bearing the brunt. The rose-colored glasses are off and workers can finally see past the rhetoric and marketing materials that lured them to the so-called promised land of Silicon Valley to the reality that ultimately even tech companies don’t. have only one audience to appease: Wall Street.
While there are, of course, some anomalies, the firing strategies Big Tech has taken to date seem to oscillate between two extremes: cringe-worthy or Disney villain-level. Many have even resisted using the term layoffs to avoid sending a signal to investors that their company is in trouble – a reality anyone could see just by taking a quick look at the stock market.
But the industry has always been ruthless when it comes to layoffs. While it’s easy to forget given the growth of the tech industry over the past two decades, the dot-com boom has left tens of thousands of people out of work. Even today’s stalwarts like Microsoft have had to lay off thousands of workers at times under the guise of business continuity. And it’s not uncommon for a company to lay off employees shortly before or right after big fundraisers or record sales quarters.
Massive layoffs aside, Big Tech consistently shows it’s struggling to manage its people. There’s rampant sexism and racism that continues to plague even the most “inclusive” cultures, like Salesforce. Even in an industry known for offering big salaries, compensation has always been a challenge, especially at places like Amazon, where employees have alleged discrimination based on pay. And it’s clear that companies like Google that consider themselves bastions of free speech seem to be throwing that value out the window when it comes to criticizing their company, opting instead to try to silence critics by failed layoffs that end up dominating the headlines.
The past few months should be a lesson for tech workers not to believe the hype being peddled by so-called luminaries who have somehow convinced themselves that they are making the world a better place by pushing largely useless technology onto customers. and consumers.
It’s easy to be swayed when companies, especially private startups, offer lucrative compensation packages — filled with stock options and crowned with a fancy new headline — that promise to make employees rich if they stick around long enough.
It’s a Silicon Valley fairy tale. But it’s a fantasy that can be very easily shattered. Look at Stripe. To CEO Patrick Collison’s credit, his recent memo announcing layoffs at the payment processing platform was far more considerate than Russian roulette from Musk’s inbox. But that doesn’t change the fact that for years, despite heavy pressure, Collison resisted an IPO. Now that public markets are likely closed until 2023 due to economic uncertainty, it’s the employees who have been looking forward to their paydays — not Collison, with a net worth of $8 billion — who won’t miss out. not to suffer.
Part of the challenge is that most tech workers, especially younger ones, have only experienced boom times. Even during the economic recession of the late 2000s, the sector remained largely resilient and used the time to invest heavily in growth.
That’s no longer true now, as the sugar rush that propelled the growth of so many Silicon Valley startups and giants suddenly evaporates, leaving behind bloated companies that have markedly high employee numbers. greater than existing sales can bear. And instead of growth at all costs, investors are in their “show me the money” phase, forcing companies to take drastic measures like layoffs in a bid to finally post profits after, in some cases more than a decade of operation.
But it’s also a reflection of the fact that, in the minds of tech CEOs, it’s the sun all the time. Yes, leaders have adopted a more austere tone lately as fears of a recession grow. But listen to the earnings call of any software vendor, especially one that just posted below-average results, and you’ll feel like you’re in a different reality. Twilio, for example, is clearly facing a huge challenge, as it finally seems to be turning profitable. But you would never know until you hear CEO Jeff Lawson speak to investors.
“Despite all the macro going on, I’ve never been more excited about the opportunity ahead,” Lawson said during the company’s earnings call on Thursday.
Laying off workers will never be an easy task for business leaders. But they’ve only made it harder after spending the last decade pretending the golden age of tech would last forever.
It is unfortunately too ambitious to expect the top brass of companies beholden to investors to act differently. But if there’s one positive outcome to all these layoffs, it’s that tech workers can finally see their industry with clear eyes.
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