Relentless recruiting and a corporate culture of abundance have long characterized American tech giants like Google and Meta (the parent company of Facebook and Instagram). Free and all-you-can-eat buffet of organic and local products at any time of the day, laundry and clothes ironing service, gym, company crèche, valet… For years, working for the kings of tech included , in addition to the best salaries in the market, to benefit from advantages with which other companies simply could not compete.
At most tech giants, employee well-being has been a way of life for ten years. Not without economic ulterior motive: the more an employee is well paid, motivated by bonuses, and pampered by benefits that make his life easier, the more he will get involved in his work without counting his hours, and the more he will be loyal to the company. company, which is crucial in a context of talent wars.
Thus, one sometimes feels in an amusement park when one visits the “campuses” of Google or Meta in Silicon Valley, with their alleys dotted with shops, ATMs and restaurants. Same impression in San Francisco while strolling through the corridors of the magnificent ultra-design headquarters of Twitter, Salesforce or Airbnb, which designed each space by drawing inspiration from the culture of a different region of the world.
Falling valuations, end of recklessness
But all of this could soon become history. The trigger: the end of the stock market euphoria for the tech giants. Since the beginning of the year, investors seem to have come to their senses and corrected their excessive valuations, which had exploded post-Covid. The return to Earth is violent: -34% for Google, -14% for Apple, -33% for Amazon, -30% for Microsoft, and a spectacular -60% for Meta.
With the exception of Meta, which recorded the first drop in turnover in its history in the second quarter, none of these other digital giants is on the decline, quite the contrary. And even for Meta, the decline is, for now, very relative. These five companies remain in the top 10 of the world’s most valuable companies. They are even more profitable than ever, and their turnover remains higher than the GDP of many small countries and that of the French CAC 40 as a whole.
In other words, the Gafams still have ample means to maintain the lifestyle that has made them famous and attractive to talent. However, the party seems to be over. All are taking advantage of the situation to slash their workforce and reduce the wing in the lifestyle of employees. The objective: to show the markets that tech companies also know how to be resilient when the economy is less flourishing. Reassure on the proper use of cash. And standardize in their management of human resources by putting pressure on employees to produce more with fewer resources.
Job cuts and a new, more economical mindset
For example, Google CEO Sundar Pichai said in an internal memo last July that Googlers “ must be more enterprising » and work with « greater urgency, sharper focus, and more hunger “than during the days” sunnier “. In other words, reconnect with the startup spirit of hard work to innovate, all with less comfort. Even if it means generating new stress among employees.
The CEO of Meta, Mark Zuckerberg, formulated this same idea in an even more brutal way last June in front of his employees: “ I think some of you might think this place is not for you anymore. Natural selection agrees with me… Realistically, there’s probably a bunch of people in the business who shouldn’t be here “said the boss, according to the American press.
” For a very long time, spending was unlimited. There was a lot of fat in the organizations, but it is very healthy to reduce this fat. The party is over a Meta executive told US site Recode. The social media empire, which claims more than 80,000 employees worldwide, has announced to its employees a 2023 budget ” very tight and a hiring freeze until further notice. “ Lots of teams will shrink so we can reallocate our energy to other areas “Warned Mark Zuckerberg during the presentation of the financial results for the second quarter. Not all departures will be replaced, and the group would provide, depending on the wall street journalto reduce spending by 10% in 2023, with cuts in employee benefits perceived as too costly.
For its part, Google had already shocked last March by laying off 100 employees of its Google Cloud division, which is growing very strongly year after year, including in the current context.
Invest in strategic technological projects
Both companies have also refocused their capital expenditures on a few strategic projects and technologies. At Google, we put the package on artificial intelligence. At Meta, we are refocusing investments on the construction of the metaverse, therefore on augmented and virtual reality.
If Meta and Google have clearly assumed with their employees that the party is over, many tech companies have decided in recent months to freeze their hiring or even reduce their workforce. Thus, at the end of August, Snap announced the elimination of 20% of its workforce, or nearly 1,300 positions, while Amazon, which employs nearly 1.5 million people worldwide, reduced the airfoil by 100,000 positions. in the second trimester.
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How Google and Meta (Facebook) are using the crisis to “cut the fat”
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