How Meta and Google are using slack fears to clean the house

For nearly two decades, high-profile technology companies such as Google and Facebook (now Meta) have been known for their rapid hiring, luxury perksand corporate cultures galore.

But now, with high inflation, the war in Ukraine, and other macroeconomic factors causing marketers to cut their advertising budgets, Big Tech’s work culture is changing. In recent months, Google and Meta . have had Recruitment slowed down dramaticallyreduce perks like Staff travel And the Laundry servicestarted Reorganize the sections. Employees fear deeper cuts in staffing. Some economists say these moves are a sign that we’re heading for “stagnation collar”, Or a decrease in job growth and security for professional workers, not only in technology, but also in other highly skilled industries.

However, there are more such transformations. External economic pressures are real — but it’s also a good excuse for giants like Google and Meta to clean the house.

As Google parent company Alphabet and Meta have grown into behemoths worth $1 trillion and $385 billion respectively, their number of employees has grown to more than 150,000 and 80,000. Now, economic conditions are giving management a chance to reset expectations, put pressure on employees to start working harder with smaller budgets, and show the door to some workers.

“At companies like Facebook and Google, long-term expenses have been unlimited,” said one Meta executive who recently left the company and spoke on the condition of anonymity for fear of professional repercussions. “There was a lot of fat in the organizations. It’s very healthy to cut that fat. … the party’s over.”

It’s not just executives who think some of the big tech companies are getting too bloated, but so are some lay employees. Before 2020 presidential primariesRecode reported that Google and Facebook employees donated the most to candidates like Elizabeth Warren and Bernie Sanders who wanted to break up big tech companies, arguing that making these companies smaller could send them back to the messier and more productive early startup days.

Google and Facebook are still some of the most profitable companies in the world, with annual revenues rivaling those of some countries’ GDP. Unlike smaller tech companies, they can afford payroll and times of economic downturn. But, some industry insiders have said, it may be in the interests of these companies to cut too much to increase productivity and prove that they are financially responsible to shareholders. Meta stock prices are down about 60 percent in the past year, and Alphabet, Google’s parent company, is down about 30 percent in the same time period.

Both Google and Facebook have frankly warned employees that for those who stayed, the company would start demanding more of them. Sundar Pichai, CEO of Google, said in an internal memo at July, reported by CNBC, that Google employees “need to be more entrepreneurial” and work with “more urgency, sharper focus, and greater hunger than we showed on sunny days.” Mark Zuckerberg, CEO of Meta, put it more frankly in a file All Hands Company in Juneaccording to The New York Times, saying, “I think some of you might decide that this place is not for you, and that self-selection suits me… Realistically, there might be a group of people in the company who shouldn’t be here.”

For employees facing this executive pressure, the sense is that overnight, their job security is no longer safe. Although the cuts at Facebook and Google have begun recently, many employees are already feeling the change.

A current Google employee told Recode that just a few months ago, employees attended regular Google meetings, which the company calls TGIFs, with regular questions about whether they would receive raises to match inflation. Now, the employee said, the most common question among employees is whether to lay off workers.

They said, “All talk about compensation goes away because people are afraid.”

One Googler Recode spoke to said that most of their colleagues are accepting of management’s cost-cutting measures.

They told Recode: “People were really understanding.” “Because at the end of the day we still have a lot better than the others.” However, they added, the company’s recent cuts and focus on productivity “created a sense of tension and uncertainty about what we can expect from the company going forward.”

This stress and uncertainty extends to the future job opportunities of the employees as well. Usually, Google employees who are unhappy with their jobs can easily seek an offer from Meta, Apple, or other nearby tech giants vying for talent; These days, most tech companies have slowed down new hires.

“There is definitely a sense of waiting, there might not be a chair at another tech company if the music stops here,” said one Googler.

The fact that in just a few months, the dynamics of the tech industry have been turned upside down, and that employees now have less influence over their employers, represents one of the most significant transformations the sector has seen since the dot-com collapse in the early 2000s.

Ironically, the Google employee mused, even if management talk about productivity doesn’t amount to more actual efficiency, he is Work effectively to get workers to stop paying to get more benefits. It shows shareholders that Google is serious about its stock performance.

Both Google and Meta have seen significant inventory declines in the past couple of years, in large part due to high inflationwar in ukraine, Changes to Apple’s privacy settingsAnd the The growing competition from TikTok.

said Keval Desai, a former Google CEO from 2003 to 2009 who now runs a venture capital firm who founded Shakti. “I think smart companies seize opportunities and make unpopular decisions.”

But unpopular decisions can be difficult to implement. Improving productivity at large companies like Facebook or Google is not as easy as having demanding employees work harder.

Some Googlers Recode spoke to said they believe that in order to be more productive, CEOs should focus on giving teams clearer direction.

“There is a fear that people are not working hard enough, but what I see is that a lot of people are working very hard with unclear work priorities,” said one Googler. “They may not make the best business decisions, but they don’t know it.”

One example: Google seems unclear about how much it wants to prioritize its hardware line. The company appears to be pressing ahead with development of its next portable Pixelbook product until it canceled its latest planned release and disbanded the team working on it earlier this month, Edge mentioned.

And in March Google Lay off 100 Google Cloud employeesgiving them 60 days to find new jobs within the company — which some employees are doing petition againstIt asks for more time. The layoffs came despite the fact that Google Cloud, while still an unprofitable division, is significantly increasing its revenue.

Laszlo Bock, co-founder of workplace software company Humu, who headed Google’s people operations teams from 2006 to 2016, said he agreed with the idea that some of the big tech companies aren’t as operationally disciplined today as they could be, and that it’s possible to time for change.

“I think there is a way for companies to navigate that, although you need a clear set of principles about how and why you want to change.” Bock said.

At Google, the company is increasingly focusing its research efforts on artificial intelligence, and in Meta, the company is prioritizing VR/AR work to support its metaverse plans, as well as its TikTok competitor, Reels.

Google recently Make big discounts to its in-house research lab, District 120, on projects that have not focused directly on AI. Metta has also Reportedly downsizing New Trial Products section to refocus exclusively on reels. On a larger scale, META plans To cut workplace spending by 10 percentThe Wall Street Journal reported recently, in part, that it’s cutting staff — and has quietly begun disbanding some teams, giving employees 30 days to find new positions within the company.

Some Meta employees are trying to find new jobs on Metaverse-related projects, which Zuckerberg made his top priority, said one of the employees who recently left the company.

“Certainly over the past six to nine months, there has been a crazy rush towards [Reality Labs]A former Meta employee who recently left the company said, “Everything else seems to be less secure about the company’s future.”

Some employees and industry experts worry that too much cost cutting could backfire by stifling employee innovation: the very kind of creativity that made these companies great.

“Traditionally, the way you drive productivity is you manage more tightly, you set goals, you lower costs. The way you drive innovation is you give people more freedom, some flexibility, and room to experiment and fail,” Bock said. Increased productivity and increased innovation at the same time.”

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