- Over the past two years, tech workers have taken on new clout as the company has flourished.
- That power may be fading away as the economic turnaround rattles even companies like Meta and Google.
- If skilled workers change jobs, take pay cuts or even lay off workers, they could face lower pay packages.
In the early days of the pandemic, tech employees were among the most sought after. Now they are losing influence.
Recruiters from Facebook, Google, Microsoft, Amazon and Twitter have struggled for the past two years to hire enough staff to keep up with demand for online products as the pandemic keeps people at home. Web3 products like cryptocurrencies and non-fungible tokens are exploding. Even entry-level tech workers can essentially set their terms of employment, including high pay, flexible work schedules, and the freedom to work from home or anywhere.
It ended abruptly. Over the past three months, tech companies from Google to Twitter have sharply slowed hiring or frozen hiring altogether. Dozens of layoffs have been made, and as many as 30,000 tech workers have lost their jobs this year at companies like TikTok and Oracle, according to a running count by Insider. external tracker, layoffs.for reference onlythe number of technical layoffs in the industry this year exceeded 60,000.
For the average tech worker, that means the good old days of multiple offers, massive grants of restricted stock units, generous raises and retention bonuses may be over. Salaries for more than half of the industry’s general skills have fallen over the past three months, according to a new report from tech industry consultancy Foote Partners.
Even Facebook, now known as Meta, is widely expected to start laying off workers based on new job expectations after aggressively hiring and offering generous compensation packages throughout the pandemic.
“The pendulum has definitely swung to the other side,” said Aalap Shah, managing director of Pearl Meyer, who advises tech companies on compensation strategies, of the recent tech worker market. Last year, he added, companies had higher demand for workers, Even hire people with less experience or knowledge than the position requires, hoping that these employees will grow into their roles.
“There’s austerity all over the place right now, and companies are looking to focus on the best talent,” Shah said.
Salary cuts may be coming
Equity grants may now not be committed in some cases in tech worker employment agreements. Boards are starting to shrug off the idea of offering big offers and bonuses to keep top talent. For workers who are looking for work, they shouldn’t expect pay packages like they have been in the past two years, Shah said.
“So many companies are trying to look at their compensation structures and equity structures and look at how to realign them,” Shah said.
At the same time, total compensation for workers who kept their jobs fell as their stock options and restricted stock units fell in value due to the sudden pullback in tech stocks.
Some even speculated that a pay cut could be imminent. Jason Calacanis, a media entrepreneur and tech investor known for his early bets on Uber and Robinhood, recently said on the “Oddlots” podcast that he “100%” expects to “100%” expect a clear pattern of companies slowing or freezing. Hiring with pay cuts, cancellations of offers and layoffs will follow. Even Meta, Amazon, Apple, Netflix and Alphabet (aka FAANG) and other seemingly unshakable tech companies could be affected, he said.
To avoid traditional layoffs, the companies are doing things like ending remote work and asking employees to return to the office. When employees fight, the company might say, “Okay, so you don’t want to work here anymore,” Calacanis said.
“What they do is fire a bunch of people. Then they turn their wages down and rehire people,” Calacanis said on the podcast. “It’s a de facto pay cut.”
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