It’s hard to feel sorry for Silicon Valley tech workers. From high salaries and generous stock options to naps and unlimited time off, they are among the most privileged class of employees in the world. On the other hand, there is no denying that these pampered employees created a technological revolution that brought incalculable economic and social value to the entire planet.
However, there is one category of people who might bemoan the cool approach to workforce cuts that have plagued the industry in recent months: the CEOs who fired them.
Nearly 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 openings will come back. We are on the verge of an artificial intelligence boom, network speeds continue to increase, cars will be driving themselves, and there will be more data collected and stored than big tech will know what to do with. Recruiters and hiring managers will beg those same employees to come back.
For nearly two decades, FANGs – Facebook, Amazon.com, Netflix and Google – have symbolized success for a young engineer or manager on the rise. Add Microsoft and Apple – let’s call them MAFANGs – and you have $7.3 trillion (roughly Rs. 6,02,75,750 crore) market capitalization, even after a 25% drop in major stock indices. 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 wrongly, they have recently presented the world with a sense of who they really are: callous companies that dump people in the middle of assignments or business trips with little explanation, no opportunity to say goodbye to colleagues, and no acknowledgment that they have needs that go beyond paychecks and free lunches to a sense of dignity and appreciation.
We must not fool ourselves into believing that companies must exhibit some kind of family value, as they have often pretended to do. But there’s a reason perks like on-site masseuses and free yoga classes roll out — they help attract and retain the brightest, most creative minds needed to inspire new products and solve seemingly insurmountable technical challenges.
MAFANGs were seen as a stepping stone to something better — their own startup, a job at a venture capital firm, a leadership role at a smaller, faster-growing tech company.
Corporate leaders need not worry that their companies are just a stepping stone in an employee’s career. They should be worried if they aren’t.
Instead of hiring driven and enterprising talent who dream of something better, they may be faced with an even worse scenario: workers see them not as a place to start or build a career, but as a place to retire, where they can live out their days safely navigating company bureaucracy until the next cycle of job cuts brings them a big payoff. A repository for those who have nowhere to go and no desire to look.
What no tech CEO wants today is to become the next International Business Machines or General Electric, once bastions of innovation and power that have become symbols of the corporate swamp and low morale.
While tech workers have taken the brunt of layoffs this time around, their counterparts in finance are also feeling the pinch. Goldman Sachs said it plans to cut 3,200 jobs, Morgan Stanley about 1,600 and Bank of New York Mellon about 1,500 as a slowdown in public offerings and mergers hit profits.
But now, having failed in their downsizing programs in an attempt to appease activist investors, tech companies risk being forever remembered not as the companies that brought pop stars to the annual party, but the corporations that laid off women on maternity leave in the dead of night.
This approach can boost short-term results and assuage shareholders who brag about corporate bloat. But in a few years they will be competing in the hiring market with a new crop of tech names, many of whom emerged during the pandemic and recession. For established leaders, size and legacy will be less of an attraction and more like an albatross around their necks.
Of course, MAFANGs will still be able to attract both recent graduates and experienced hands. But not so many, and not the best. And it will hurt.