How Meta and Google are cleaning house amid recession concerns.
Top-tier digital firms like Google and Facebook (now Meta) were renowned for their quick recruiting, lavish benefits, and abundant corporate cultures for nearly two decades.
However, as a result of marketers cutting their advertising spending due to the war in Ukraine, rising inflation, and other macroeconomic concerns, Big Tech's work culture is changing. Google and Meta have significantly reduced hiring in recent months, reduced employee benefits like laundry and travel, and started reorganizing departments. Employees worry about further personnel reductions. Some analysts claim that these developments indicate the beginning of a "white-collar recession," or a reduction in job security and growth for professionals across all high-skilled industries, not just technology.
However, there is more to these changes. The demands from the outside economy are true, but it's also an excellent justification for companies like Google and Meta to purge their staff.
Alphabet, the parent firm of Google, and Meta have expanded their workforces to over 150,000 and 80,000 employees as they have become global corporations with respective values of $1 trillion and $385 billion. The current economic climate is allowing management the chance to reevaluate expectations, put pressure on staff to start working harder with smaller budgets, and fire certain employees.
One Meta executive who recently left the business and spoke anonymously out of concern for career consequences stated, "At organizations like Facebook and Google, for the longest time spending were infinite." "The organizations were very bloated. Cutting that fat is highly healthy. The gathering is over.
Some rank-and-file employees believe that some Big Tech businesses have grown overly fat as well, not just leaders. According to a Recode investigation, Google and Facebook employees gave the most money to candidates like Elizabeth Warren and Bernie Sanders who supported breaking up Big Tech. They claimed that doing so would allow these businesses to revert to its more nimble and productive early startup days.
The annual revenue of Google and Facebook, two of the most successful businesses in the world, is comparable to several nations' entire GDP. They can afford to make payroll and withstand economic downturns, unlike smaller software enterprises. However, according to some business experts, it can be advantageous for these companies to make more cuts than necessary in order to boost productivity and prove to shareholders that they are managing their finances responsibly. In the last year, the value of Meta's shares has decreased by nearly 60%, while Alphabet, the parent company of Google, has seen a decline of roughly 30%.
Some staff members and industry professionals are concerned that excessive cost-cutting may backfire by suppressing employee innovation—exactly the kind of creativity that made these businesses great.
"Traditionally, tighter management, goal-setting, and cost-cutting have been the methods used to increase productivity. Giving employees more freedom, flexibility, and space to try and fail is how you spur innovation, according to Bock. I'm not sure how you can boost innovation while still increasing productivity.