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The clear view
This was the month when Big Tech got smaller. The leader in the downturn was a troubled Twitter led by a new owner who, after trying to repay its $44 billion pledge to buy the company, has plunged into the task of solving the problems. Job One was getting rid of half of the workers behind the money-losing platform. But Twitter was far from the only one to strip employees of their salaries, health plans and email addresses. Stripe, which was only recently seen as the gold standard for emerging deca unicorns, cut 14 percent of its workforce. Intel has chipped 20 percent. Robinhood has started up nearly a quarter of its employees. Lyft has cut 13 percent of its workforce from roles. Shopify has discounted a tenth of its 1,000 employees. Snap disappeared a fifth of its people. The most unfriendly cut of them all, at least volume wise, came from Meta. Mark Zuckerberg gave 11,000 employees the chance to share the “badge posts” that departing employees write as they leave the Frank Gehry-designed building. Apple and Amazon have just announced the employee freeze.
The number of newly unemployed techs from this recent purge is probably well into the six figures. But numbers don’t tell the whole story. The most valuable asset in a technology company is talent. I’ve experienced endless diatribes at events for potential founders, like Y Combinator’s Startup School, where peach moguls a quarter of a generation behind them instill in people that the biggest mistake you can make is to hire the wrong person, and that glory comes to those. who resist filling posts with anything less than superstars. That mantra applies not only to the smallest startup in a garage, but also to industry goliaths. Anyone who has ever applied for a job at a hot tech company, or even a lukewarm one, knows that there is a brutal obstacle course between applying and orientation. Candidates often have to endure weeks of interviews, coding tests and CIA investigations of their past. At one point, Google, whose hiring was personally overseen by co-founder Larry Page, would sift through college applicants’ transcripts with a comb so fine it could pick up lice. Why did you get a C for that subject? Unless you had a good excuse – “Um, my mom died that semester?” – forget those free meals at the Googleplex cafeteria.
Given that ordeal, you would think that actually getting a Big Tech job would earn you made man status in the Cosa Nostra. But this week’s message is that when the bottom line finds a new bottom, or dark clouds gather on the economic horizon, companies are willing to write off that investment in talent and kick their most valuable assets onto the street. In tech, the only untouchables are those at the top. Mark Zuckerberg may say he’s responsible for the inflated staffing that led to the massive layoffs he ordered, but getting the paychecks of 11,000 people caused Meta’s stock price to soar 7 percent a day, raising Zuck’s bank account. swelled up several extra billions.
In any case, Zuckerberg has signed his letter explaining the layoffs. The email telling Tweeps that half of them would lose their jobs was signed, simply Twitter. No blue check mark!
But here’s the irony. As the economy fluctuates reliably between boom and bust, and valuations rise and fall at the whim of Wall Street, the technology itself is only going in one direction. Connection speeds are getting faster, chips are getting more capacity and rocket ships are becoming more reliably reusable. Generative AI models don’t degenerate because advertisers are skittish or creepy equity people who impose themselves on a company’s board of directors. They just get smarter and scarier.