Big Tech’s facade is crumbling
Good morning! Market rot is chipping away at Silicon Valley’s once-alluring veneer, proving that not even Big Tech will be spared from the downturn.
It’s a hard-knock life
This week, Amazon executives were upbeat as they unveiled a slew of new hardware devices: “We want customers to enjoy the here and now — and I can tell you it’s working,” said division vice president David Limp.
The mood is less optimistic behind the scenes. Amid a broader effort to cut down on spending across Amazon, hiring in the device unit has slowed dramatically. Now, new hires can even have their offers revoked or opt for a job elsewhere in the company, like advertising, Protocol has learned.
- Publicly, Amazon has tried to present a more optimistic tone: “Like all companies, we continually adjust our hiring strategies. As part of this, we occasionally reprioritize the roles we need to fill and offer similar roles to candidates with pending offers,” the company told Protocol in an emailed statement.
- Privately, sources say the environment has changed noticeably across the company, with a clear focus on cost-cutting.
- And Amazon isn’t alone. Across tech, budgetary cuts are becoming more severe as companies brace for what could be a prolonged period of economic constriction.
- Meta is freezing hiring, and Alphabet is doing the most Google thing ever: killing off projects. And overall, the industry is bleeding jobs. Most of those efforts are, naturally, geared to improving cash generation, a new demand from investors after over a decade of burn.
The once-impenetrable fortress of tech is falling. And the crumbling is forcing employees to take new stock of their sector. Workers are finding out jobs they thought they had aren't there, beloved perks are on the chopping block, and money that was once earmarked for early retirement is now gone.
- It might be hard to remember what it was like before in-office ping-pong tables, but corporate life wasn’t always so glamorous. Yes, there were respectable amenities, like big cafeterias and workout centers. But employees weren’t getting massages, napping in pods, or swilling Kombucha on tap.
- Then Silicon Valley came along and changed the paradigm. The can-do, entrepreneurial vibe was matched with enviable perks that helped make a job in tech the decade’s hottest LinkedIn accessory.
Now, industry leaders are left to grapple with the beast they created. And it’s somehow a surprise to them that after decades of insane perks, employees are pushing back on efforts to curtail those benefits.
- “‘We shouldn’t always equate fun with money,” Sundar Pichai now-infamously told employees. Ironic given that Google is the poster child for lavish worker benefits: former HR exec Laszlo Bock even wrote a book on it.
Tech workers of a certain caliber still hold a lot of sway. But one of the tried-and-true routes to potential riches in the industry is evaporating; even in-demand technologists could soon find it hard to get a job.
- The IPO market is largely closed. As startups aim to preserve cash to hold out for better market conditions, many are going to have to pull back on the extravagant packages they once used to lure people away from places like Amazon and Google.
- And the biggest companies are getting more hesitant about approving big compensation packages — if not stopping hiring entirely.
There will always be tech roles available; perhaps increasingly so for people who specialize in growing fields like machine learning. But many in the industry, especially those early in their careers, have never experienced such an intense downturn in the market.The side dishes that helped make working in Big Tech a sustainable feast are increasingly off the menu. For some, it may even be time to take the jump to the stern, more responsible, East Coast brother of tech: finance. Time to bust out your suit, Silicon Valley.
A MESSAGE FROM ALIBABA
Alibaba — a leading global ecommerce company — is a particularly powerful engine in helping American businesses of every size sell goods to more than 1 billion consumers on its digital marketplaces in China. In 2020, U.S. companies completed more than $54 billion of sales to consumers in China through Alibaba’s online platforms.
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A MESSAGE FROM ALIBABA
Using economic multipliers published by the U.S. Bureau of Economic Analysis, NDP estimates that the ripple effect of this Alibaba-fueled consumption in 2020 supported more than 256,000 U.S. jobs and $21 billion in wages. These American sales to Chinese consumers also added $39 billion to U.S. GDP.
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