Tech companies are laying off workers after years of spoiling them

• The tech sector has already cut nearly 100,000 jobs this year.
• Those who have identified with their big companies and their high salaries take it badly.
• Industry insiders said the workers were being brought back to Earth.

Layoffs at big tech companies have caused an identity crisis for many affected workers.

“If you identify with your salary, which a lot of people do, and if you identify with working for a glamorous company like Microsoft or Google or Meta, then your identity takes a hit,” Laurie Swanson, a career coach and recruiter at InspiHER Tech, said.

The root of it all lies in the notion of technological exception: when companies like Google, Facebook and Salesforce grew into the giants they are today, they seemed to defy gravity – earning money by hand, even pampering their employees. with perks that seemed too good to be true, like massages, ping-pong tables, and free food.

Now things are changing, and the world of swanky perks and exorbitant salaries that zealous investors used to back is coming to a halt. Companies have already laid off about 100,000 employees this year, more than half of what they lost in 2022, according to Layoffs.fyi, a website that tracks layoffs in the tech sector. Companies like Google, Meta, Microsoft and Amazon cut more than 50,000 jobs in total, with all companies saying they were overhiring at the height of the pandemic.

From a business and investor perspective, this market correction is probably long overdue. But for tech workers who have been sold on the glamorous lifestyle these companies have provided over the past few decades, it’s a blow to their self-image. Technology looked like the solution to so many things that it produced in some employees a mindset that it was the exception to the rules of capitalism.

“The feeling was that it was so exceptionally, incredibly, out of this world,” said Reyhan Ayas, senior economist at labor intelligence firm Revelio Labs. “I feel like it was brought down to earth.”

The arms race to give the best advantages

Understanding how Silicon Valley culture spawned a certain kind of abused tech worker starts with a history lesson.

Vijay Govindarajan, a professor at Dartmouth College’s Tuck School of Business, told Insider that as early as the 1980s, tech companies were aiming for an open and more informal office culture, to better drive innovation. Part of this approach was to create strong social bonds between employees. Open-office floor plans, communal kitchens, and freebies like food and coffee encouraged employees to come together and share ideas. He effectively turned lunchtime and coffee breaks into working hours.

It has also become a recruitment tool. When companies wanted to attract and retain parents, they began offering maternity benefits, on-site childcare, and lactation rooms. To recruit young professionals fresh out of college, companies have tried to mirror college dorms, said Michael Malone, a tech historian and author who recalls seeing Pilates balls and video games at the University. former search engine giant Yahoo.

“Your private life and your professional life started to slide into each other. It was a bit cynical of these companies in the sense that ‘we expect you to live here,'” said Malone.

Office design and benefits eventually turned into an arms race as companies competed not only for the most talented people, but those who wouldn’t mind putting in the long hours. If one company provides free food, the other must raise the bar, Govindarajan said.

Google has become famous for its commuter buses, rock climbing wall, on-site gym, and in-house massage therapists or massage chairs, according to the campus. Microsoft paid for its employees’ health care. Apple began hosting Beer Bashes where the company offered employees beer, food, and free concerts from popular artists such as Maroon 5. Meta installed dental and health care on-site, as well as dry cleaning services and a bicycle repair shop. And Apple and Meta are paying part of their employees’ egg freezing costs to win over mothers-to-be.

These benefits also came with increased salary expectations.

Fresh graduates had a desire to become the next Mark Zuckerberg as they watched “The Social Network” in 2010, watched his company raise $1.5 billion in venture capital in 2011, and then watched him realize his IPO in 2012.

Google raised the salary for entry-level positions up to $20,000, The New York Times reported, to maintain its pipeline between the university and the company. Across the industry, companies have moved from offering restricted stock units in less than half of all compensation packages to units that are a major employee benefit.

The pandemic fueled the frenzy before the crash on Earth

The recent layoffs in the tech sector came after a period of robust hiring that occurred during the pandemic-induced shift to digital work in 2020 and 2021. The industry and its eager investors were convinced that Home Orders had accelerated the country and the world into its digital future.

Tech professionals have benefited as it has spurred demand for their skills and increased their compensation. The Big Quit, where people quit en masse in favor of better-paying opportunities elsewhere, also reinforced the idea that there was job security in the sector.

Young tech workers took to TikTok to show off their offices, benefits, and the lifestyles they offered with high entry or junior salaries. The videos attracted hundreds of thousands, if not millions, of views and furthered the narrative that tech was the “it” industry.

Reality sets in for the tech industry

Then reality set in as the economy began to deteriorate.

“He went from negotiating a salary like crazy and complaining that they had to work after 4 p.m. or whatever, to realizing that working in technology does not make them so exceptional and that they are also at the thank you for potential layoffs,” Ayas said of the breaking point.

Spending so many years in the comforting embrace of technology and then the harsh awakening of reality has confused and upset many, whether it affects them or not.

An ex-Googler who was given a virtual pink slip told Insider she was “mourning” the loss of her job and that the layoff felt “un-Googley” to her. A fired Meta recruiter said she felt “hurt”. Those still on the payroll have been left with feelings of guilt and survivor anxiety about whether they are next.

It’s unfortunate, Govindarajan said, but he added that these tech companies have disrupted other industries like photography, automotive and department stores.

“There are many industries that the tech sector has disrupted where people have been laid off. But now it’s the turn of the tech sector itself,” he told Insider.