The Slack baristas, the CEO, and the tension over coronavirus job cuts

On Thursday morning, Cara Bergman feared she had, unknowingly, worked her last shift at Slack.

For nearly three years, she'd been making high-end coffees at the messaging company's downtown San Francisco office. But just before the usual staff happy hour a week earlier, on March 5, Bergman and the rest of the staff were suddenly sent home. The office was closed the next day as the coronavirus outbreak grew, along with offices for many other large tech companies.

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"They said that somebody maybe had contact with the virus," said Bergman, 35. "I honestly thought that we'd go back on Monday."

Instead, she and four other Slack baristas employed through a staffing firm called Premier Talent Partners were notified by cryptic late-night text messages and weekend phone calls that their jobs would end after their contracts expired on March 27. Four of the baristas told Protocol they were unaware that they had contracts up for renewal.

At first glance, the layoffs seem like a prime example of the economic panic that has ensued as markets plummeted and new cases of COVID-19 spread this week in tech hubs like Silicon Valley and Seattle. But the reality is more complicated, crystallizing a moment of intense anxiety when it is unclear how many people are sick, whose jobs might be at risk and what prolonged turmoil might mean for everyone.

"The moment that this company is shutting down their offices for a month, they just kind of let us loose," said Carly McCarthy, a 29-year-old barista who had worked at Slack for just over a year. "We're already feeling like we don't know what's going on, and we're all scared."

A spokesperson for Slack said the virus was only part of the equation. Rather, the company had already been planning to end the contracts as part of an effort to alter its vendor management systems and "improve the options for the contractors."

But that was before a global pandemic was declared and before those contractors decided to get organized.

Job market limbo

The stock market continued its free fall on Thursday to lows not seen since the 1980s, before rebounding on Friday. Economists and executives are grappling with whether this is the beginning of a recession. Labor groups are sounding the alarm about the precarious position of contractors and service workers. Tech companies are responding with commitments to keep paychecks coming, though details are hard to come by, and some contractors are still going to work as employees log in remotely.

Recruiters say it's too soon to tell what the lasting impacts will be. Some companies are hiring — for now — either because their services are in demand due to the coronavirus, or to keep up with the whiplash of a rapid shift to remote work.

"A client called us saying, 'Do you have temp workers that can be basically assistants to organizing large-scale video conferences?'" said Stephanie Wernick Barker, president of tech recruiting firm Mondo, which has offices in 10 cities across the U.S.

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"People are uncertain," said Glassdoor Senior Economist Daniel Zhao. "The key here is really for employers to stay ahead of the curve and keep employees informed."

The turmoil comes as tech grapples with familiar questions about the sustainability of massive funding rounds and rapid growth. Even before COVID-19 captured global attention, Glassdoor charted a 31% decline in tech and internet job postings this February compared to the same time last year. It's a big shift from the bull market and unicorn valuations that have defined recent years, but maybe not cause for mass unease — yet.

"The tech job market is still very, very competitive," Zhao said. "That's relevant even as we enter this outbreak."

For tech recruiter Wernick Barker, this year was off to a strong start with more clients hiring full-time direct employees. Prolonged "hysteria" over the virus, however, could complicate the picture.

"If we can have a strong economy that only needs to recover from an illness," she said, "that's a lot better than something fundamentally being wrong."

A surprise offer

In the case of Slack and its baristas, interviews and emails provided to Protocol show that the company's position on job cuts has been erratic as the situation with COVID-19 develops. At first, contract baristas said they were told that their jobs, pay and health benefits would end on March 27.

But early this week, their former co-workers at Slack began circulating a GoFundMe for "Healthcare for the coffee team," which raised more than $15,000. On Thursday, as the baristas spoke to the press and prepared to send an open letter to CEO Stewart Butterfield, Slack granted their demands for 90 additional days of severance and health benefits.

More than $15,000 was raised earlier this week to provide health care for workers whose jobs were in limbo. But then Slack changed course.Screenshot of the GoFundMe page

"You will not be expected to work at Slack during that time," an email to the baristas sent on Thursday afternoon said, "and may instead devote your time to a new engagement."

A few hours later, the company changed course again. The situation has "changed dramatically as a result of COVID-19," the spokesperson said. As a matter of fact, he said, Butterfield wanted to give the baristas full-time jobs. Another email sent to the baristas, also late Thursday, said that Butterfield "became aware of the situation" and wanted to assure the workers that "no matter what, you will have the option of returning to Slack."

"We're all stunned. It's unreal," said Alicia Brown, a 34-year-old barista who has worked at Slack for 18 months. "We're overwhelmed. This is beyond a good outcome for us."

The organizing effort came as advocates for gig workers and contract tech workers warn that non-full-time employees are particularly vulnerable to the turmoil surrounding the pandemic, with less paid sick leave and less comprehensive or nonexistent health care.

"We're in the service industry," said Phet Sayavong, a 33-year-old barista who has worked at Slack since late 2018. "Everybody knows it's going to be the hardest hit."

She and others said the confusing chain of events highlighted nagging divides between themselves and full-time employees. In the last year, Bergman and McCarthy said contractors were given green badges that made them stand out, and were no longer allowed in company-wide meetings. Slack did not answer detailed questions about changes to its contractor programs, or the potential for other shifts in hiring at the company that currently lists dozens of open positions.

"I was told from day one I was just like everybody else at the company. I was one of them," Bergman said. Around the time the company went public, though, "I just got a badge that's a different color," she said. "I remember people kind of apologizing for it."

Sayavong was initially reluctant to take a job at a tech company. But the people were nice, and the pay was $25 an hour or more, better than most service jobs even with tips. There was also health care. Soon, she learned that Butterfield's favorite drink was a cortado.

"I would be very nervous to make it for him, but very proud," she said. On Thursday, after going up against his company, she had the same emotion in a very different context: "We're definitely very proud of the fact that we know now that organizing and talking about relevant issues works."