It’s hard to feel sorry for Silicon Valley tech workers. From high salaries and generous stock options to nap pods and unlimited time off, they’re among the most privileged class of employees in the world. Conversely, there’s no denying that these pampered staffers engineered a technology revolution that’s brought untold economic and social value to the entire planet.
Yet there is a category of people who may lament the coldhearted approach to workforce cuts that have torn through the sector over the past few months: The CEOs who fired them.
Almost 100,000 positions have been eliminated this year alone, according to Layoffs.fyi, which tracks the data. At some point in the next few years, those job vacancies will return. We’re on the cusp of an artificial intelligence boom, network speeds continue to get faster, cars will be driving themselves, and there’ll be more data collected and stored than big tech will know what to do with. Recruiters and hiring managers will be begging those same staff to return.
For the better part of two decades, the FANGs — Facebook, Amazon.com Inc., Netflix Inc. and Google — epitomized success for a young engineer or a career-climbing manager. (Facebook is now called Meta, and Google became Alphabet). Add in Microsoft Corp. and Apple Inc. — let’s call them the MAFANGs — and you have US$7.3 trillion ($9.72 trillion) of market capitalization, even after a 25% plunge in major stock indexes. More importantly, though, they are among the most valuable names an employee can put on their resume.
These companies pride themselves on measuring, benchmarking and rewarding performance. But rightly or not, they’ve recently presented to the world a sense of who they really are: Callous companies who dump people in the middle of assignments or business trips with little explanation, no opportunity to farewell colleagues, and no recognition that they have needs that extend beyond salaries and free lunches to a sense of dignity and appreciation.
We shouldn’t kid ourselves into believing that companies ought to display some kind of family values, as they’ve often pretended to do. But there’s a reason why perks like on-site masseurs and free yoga classes are deployed — they help attract and retain the brightest and most creative minds, those needed to inspire new products and solve seemingly insurmountable technical challenges.
See also: Meta to cut 10,000 jobs, eliminate 5,000 more vacant positions
The MAFANGs were seen as a stepping stone to something better — your own startup, a job at a venture capital firm, a leadership role at a smaller, faster-growing tech company.
Corporate leaders needn’t be concerned if their companies are merely a rung on an employee’s career ladder. They should be worried if they’re not.
Instead of hiring talent with drive and entrepreneurial flare who have dreams of something better, they could find themselves facing an even worse scenario: Workers see them not as a place to start or build a career, but instead somewhere to retire to, where they can live out their days safely navigating company bureaucracy until the next cycle of job cuts hands them a fat payoff. A repository for those who have nowhere else to go, and no desire to even look.
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What no technology CEO wants today is to become the next International Business Machines Corp. or General Electric Co., once high-flying bastions of innovation and power that became symbols of corporate morass and low morale.
While tech workers have taken the brunt of firings this time, their counterparts in finance are also feeling the squeeze. Goldman Sachs Group Inc. said it plans to cut 3,200 jobs, Morgan Stanley around 1,600 and Bank of New York Mellon Corp. approximately 1,500 as a slowdown in public offerings and mergers hits earnings.
But now, having botched their downsizing programs in an attempt to appease activist investors, technology firms risk being forever remembered not as the companies that brought pop stars to the annual party, but the corporations who fired women on maternity leave in the dead of night.
This approach may boost the bottom line in the short term, and assuage shareholders who crow about corporate bloat. But in a few years they’ll be competing in the hiring market with a new crop of technology names, many of which popped up during the pandemic and downturn. For the established leaders, size and legacy will be less an attraction and more like an albatross that hangs around their necks.
Sure, the MAFANGs will still be able to attract fresh graduates and experienced hands. But not as many, and not the best. And that’s going to hurt. - Bloomberg