Employees who switched jobs during the pandemic received salary bumps and permission to work remotely. Those perks are now under threat.
Tech workers used to asking for the moon are starting to hear an unfamiliar word as startups and giants such as Google and Microsoft MSFT 0.54%▲ get more cautious: No.
For much of the pandemic, tech companies big and small went on hiring sprees where would-be employees could name their price and expect rich, work-from-anywhere perks. Now, as fears of a recession loom, more employers are scaling back or freezing hiring, rethinking how many of their positions should be remote and in some cases even rescinding job offers.
Microsoft Corp. this week said it would lay off a small percentage of its staff, following earlier layoffs at Netflix, Coinbase Global Inc. COIN 0.60%▲ and Twitter Inc. Alphabet Inc.-owned Google’s CEO Sundar Pichai also told employees this week the company would slow the pace of hiring for the rest of the year. And the head of engineering at Meta Platforms Inc., parent of Facebook, told his managers to identify and report low-performing employees to manage them out.
One tech worker, 40-year-old Lindsey Collins Guest, said she experienced these shifting expectations firsthand. In she was laid off from Bolt Financial Inc., a payments-focused financial technology company, and during her search prospective employers floated base salaries that were an average 30% lower than what she had been making. She finally accepted a job with a live-streaming shopping startup that met her minimum salary requirements.
The current gap between salary expectations and reality is, in part, due to how high compensation got in 2021, says Howard, chief talent officer for the venture firm that has invested in Dropbox, GitHub Inc., and Snap Inc. The 2021 increase “was outrageous” and “unseen before,” Ms. Howard says.
Candidates who want to go into an office may have an edge over those seeking remote arrangements, according to venture capitalists and recruiters. Ms. Howard said executives now tell her they prefer to hire candidates who are enthusiastic about being in the office. “Now, not all of them will say that out loud,” she says.
Some venture capitalists have been less shy about broadcasting their preference for companies who call workers back: Keith Rabois, a partner with Founders Fund, tweeted in May how he was looking to fund “IRL”—or “in real life”—startups. Josh Wolfe with Lux Capital last month tweeted his support of Elon Musk’s office mandate for Tesla employees.
“Remote work works in remote cases,” Mr. Wolfe wrote, adding that “In tough times + coming people will need rapid face to face body language communication and camaraderie and signal commitment.”
Bill Gurley, a partner at Benchmark Capital and early backer of Uber Technologies Inc. and Grubhub Inc., tweeted that the ultralow interest rate era created competition for workers that led to “a Disney-esque” set of experiences and expectations.
“For employees that have only known this world, the idea of layoffs or cost reduction (or being asked to come into the office) is straight up heresy,” he tweeted. “This is not their fault. Excess capital led to excessive showering of employee benefits and heightened expectations.”
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