- A trifecta of economics, post-pandemic realities, and political pressure is changing tech culture.
- From Big Tech to Silicon Valley startups, companies push to “do more with less.”
- Leaders aren’t shy about wielding their power and aligning around a hard-driving strategy.
For years, Shopify CEO Tobi Lütke enjoyed a reputation for growing the $125 billion e-commerce company without working the grueling hours expected of startup founders.
“My job is incredible, but it’s also just a job. Family and personal health rank higher in my priority list,” he wrote in a now-deleted X post just before the pandemic, as reported in a Business Insider story. “The only times I worked more than 40 hours in a week was when I had the burning desire to do so.”
This year, even Lütke appeared to change his tune.
“I’m at home for dinner but I work at least 10 or so hours a day and a lot of the weekend,” Lütke wrote on X. He was responding to a user who called him a “counter-example” to a meme suggesting you can’t have work-life balance and a breakthrough startup. “I don’t want people to get misguided by this meme.”
Across tech, the tables have turned for employees as performance pressure and proclamations of “efficiency” and “intensity” replace perks and pampering. Sweeping layoffs have become the norm in an industry that, in recent memory, enjoyed job security. The pressure to dominate in AI has created intense competition, as companies use the technology to do more with fewer workers. Already hard-driving workplaces have become even harder.
While the situation for tech employees has been changing since the pandemic boom ended in 2022, more recent developments include a decidedly different tone from executives. Now, companies aren’t just making these changes, they want to be seen making them.
Meta said earlier this year it was cutting 4,000 employees deemed low-performers as CEO Mark Zuckerberg said the “culturally neutered” corporate world had gotten away from “masculine energy.” Amazon insisted that employees return to the workplace every weekday, a policy some employees say is stricter than before the pandemic.
Other companies have cracked down, too. Microsoft, which was once referred to as a “country club” for its relatively lax culture, cut 2,000 employees as it overhauled its review process to eliminate underperformers more quickly.
Google, which practically invented tech perks like free lunch, started an “efficiency drive.” Its cofounder Sergey Brin, who had stepped away from leading Google but now often shows up to work on the company’s Gemini AI models, recently recommended that employees working on its Gemini tools should work 60 hours a week and go into the office “at least every weekday.” Wall Street has rewarded this rigor, as stock prices of Meta, Amazon, Microsoft, and Google have surged since 2022.
Startups also see a trickle-down effect from Big Tech companies’ pressures. Krish Ramadurai, a partner at AIX Ventures, said he’s noticed a “pronounced shift” toward leaner teams and rigorous performance standards at startups.
Between performance-based cuts, return-to-office mandates, and the stripping of workplace perks, it’s clear that the tech industry is not only done with coddling employees, but companies want to send the message that those days are over. BI interviewed employees from tech giants, including Microsoft, Google, Amazon, and Meta, as well as various tech startups, about the changes. Some spoke on the condition of anonymity since they’re not authorized to speak to the press, though their identities are known to BI.
Meta, Microsoft, Google, and Amazon did not comment. Shopify did not respond to a request for comment.
From comfy to collapsed
For years, fierce competition for tech workers meant companies spoiled employees with astonishing salaries and swanky perks, from free food cooked by fancy chefs to in-office massages.
By 2022, tech companies seemingly couldn’t throw enough money at workers. Early that year, Amazon more than doubled its maximum base salary, and Microsoft gave across-the-board raises to employees up to a certain level of seniority to dissuade them from leaving for competitors.
As the pandemic boom ended, tech stocks plummeted, and interest rates increased through 2022. This prompted an efficiency drive by many companies as investors demanded profitability over growth at all costs.
Also that year, companies watched billionaire Elon Musk’s handling of the Twitter acquisition, in which he cut thousands of employees, plus perks like free lunches, and demanded a commitment to a new “extremely hardcore” vision and “long hours at a high intensity.” At one point, Twitter workers were begging for toilet paper and clean bathrooms on Slack amid Musk’s drastic cost-cutting, as BI previously reported.
As of late last year, Twitter (now called X) was worth about 80% less, according to Fidelity’s estimate, than when Musk bought it for $44 billion in 2022. Still, his approach may have expanded what the tech industry thought possible in terms of workforce and cost-cutting.
“People paid attention because the prevailing wisdom was you couldn’t take out that much of an engineering organization and put that much instability on it and not have it fall over,” Brad Porter, founder and CEO of Cobot, told BI. “It did come close to falling. He pushed right to the edge of it actually falling over, but it didn’t fall over.”
‘Do more with less’
By the end of 2022 and in early 2023, tech giants had conducted unprecedented rounds of layoffs. Meta, Amazon, Google, and Microsoft collectively laid off over 60,000 employees during that time.
Layoffs have remained at a steady drip across the industry since. Such cuts have become so frequent at Google, for example, that employees have taken to crowdsourcing information on layoffs in an internal Google Doc.
Employees told BI about the pressure across the industry to “do more with less.” “There’s lots of uncertainty,” one longtime Amazon employee said, “and lots of pressure to perform the jobs of multiple people at the mercy of ruthless middle management.”
Tech companies are also culling middle management layers. Amazon announced last September a plan to increase the ratio of individual contributors to managers by 15% by the end of this month. In December, CEO Sundar Pichai told staff that Google had cut vice president and manager roles by 10% as part of its efficiency drive. Microsoft also monitors what it calls “span of control,” tracking the number of reports per manager.
Performance pressures
Amid the cuts, employees across the industry say companies are dialing up the performance demands.
Meta told staff in January that it would eliminate roughly 5% of its workforce, or about 4,000 employees, to “raise the bar on performance management,” as Zuckerberg wrote in an internal memo.
Google also increased pressure on employees. Perhaps most telling was Pichai’s December comments attempting to clarify what “Googleyness” means for a modern Google. Once a squishy and vague philosophy for the search giant’s corporate culture, Pichai said he believed it now meant, among other things, being “mission first.”
“There is more pressure for individuals to be better in their roles, and there is much more aggressive performance management happening these days,” said a longtime Google manager.
“We’re being asked to do more for less,” said another current longtime Google employee.
That same Google employee said Silicon Valley has been moving toward more ruthless, efficient workplaces for a while, and the current political climate “gives them the green light to do it openly.” Google has been making changes to become more efficient since chief investment officer Ruth Porat joined the company as CFO from Morgan Stanley in 2015, “but now the masks are off,” the person said.
Microsoft was once referred to as the tech industry’s “country club,” meaning a place employees would go after they were done working hard in their careers and wanted to coast before retirement. A change this year shows how far Microsoft has shifted when it fired 2,000 employees deemed low performers without severance and ended their health benefits the same day. This kind of performance-based mass cut showed a shift for the tech giant.
One longtime Microsoft senior-level employee said they felt that the “culture shifts toward firmer performance expectations” at peer tech companies like Google, Meta, and Amazon made it more acceptable for Microsoft to do the same.
At TikTok, the pressure to perform jumped last year after the company directed managers to deliver more low scores in performance reviews, leading to PIPs and eventual exits. At the same time, six current and former employees told BI their goals had become much harder to hit. One staffer called the goals “unattainable.”
The company has also recently heightened RTO requirements for some teams. In February, it told its US e-commerce workers that in addition to being in the office five days a week, they would physically need to be in the building for eight hours a day. Ten current and former workers told BI that burnout has become common, leading to some going on mental health leave to get a break. TikTok did not respond to a request for comment.
“You feel like if you’re not hitting a target, even if it’s a moving target, you’re in trouble,” a former staffer who went on leave for mental health reasons told BI. “For me, it was just feeling like a failure, like I couldn’t do anything right.”
It’s gotten hardcore in ‘the valley of death’
The increasing pivot to performance has even made it to already hard-charging startups.
Startups have a time-honored tradition of an always-on, work-first lifestyle. Early employees are expected to put in grueling hours of coding and customer support during this critical phase, known as the “valley of death,” when startups are flush with initial funding but not yet profitable.
The free-money era tested this tradition of hustle and thriftiness. Investors heaped money into small startups when interest rates bottomed out, and the blitz scaling that followed set off an arms race of perks to help startups attract top talent. Employees could work from home and set their own schedules. They pocketed wellness stipends and trotted the globe on extravagant off-sites. The tech startup Bolt gave many employees Fridays off.
“I think many individuals — founders included — lost sight of the true goal of a company. It is to make money,” Mang-Git Ng, founder of Anvil, a paperwork automation company, told BI.
Now, the executives who had lavished high salaries and fancy perks on their employees are resetting expectations, winding down remote work, and cutting head count.
“Everyone who comes into our office at Decagon has opted into working with a team that’s here because we want to do big things and see bigger and better results,” said Jesse Zhang, the founder of Decagon, who now badges into the office six days a week. “There’s no such thing as a rocketship that doesn’t have a certain level of intensity to fuel its trajectory.”
Call it the Big Tech trickle-down effect.
“Founders aren’t sugarcoating it,” said Natan Fisher, who runs a recruiting firm, SingleSprout, that specializes in hiring technical talent. “I’ve had a few cofounders tell employees they aren’t working hard enough, and ‘if you’re not all in, no hard feelings, we can give severance, but we can’t slow down.’ Late nights, weekends, even people crashing at the office, it’s real.”
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Emma Cosgrove, Eugene Kim, and Pranav Dixit also contributed to this report.
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