On May 14, American technology companies were once regarded as a comfortable place for employees. However, after years of rapid growth, Facebook and twitter began to reduce the recruitment scale, and many technology companies and investors began to change their investment strategies. About two weeks before Elon Musk's successful acquisition of twitter, Keith rabis, a Silicon Valley venture capitalist and entrepreneur, released a story about Musk's startup.
He mentioned that musk once noticed a group of interns wandering around idly while waiting in line to buy coffee in SpaceX.
This normal thing seems to musk to be an insult to productivity. According to rabois, Musk's response is that if this happens again, he will fire all interns and ask the company to install cameras to regulate order.
Of course, in addition to threatening to fire everyone, musk can also cancel the tea break or buy another coffee machine for the company. As we all know, musk will sleep directly in the office when facing production problems, and will relentlessly threaten to fire people with different opinions. But these two options are not Musk's style, nor is it the style of today's Silicon Valley.
After nearly 15 years of prosperity, the technology industry has now entered a tightening mode. Since October last year, the stock price of newly listed technology companies has fallen by about 60%. Technology investors are beginning to worry that some Unicorn companies and overvalued start-ups may not be able to raise additional funds, so they must cut costs sharply.
Earlier this month, Facebook's parent company meta announced a slowdown in recruitment to cut costs. Late Thursday, twitter announced a hiring freeze. Even Uber, a car Hailing service company that has been burning money for business growth, has issued a serious memorandum on "unit economics" to its employees.
Until recently, investors turned their attention to layoffs. Marc andreesen, a venture capitalist who provided $400 million for Musk's acquisition of twitter, wrote on Twitter: "excellent large companies have twice as many people as before." "It's terrible. Large companies have four or more times as many people as before."
Julia Pollak, chief economist at recruitment website zipprecruiter, said the slowdown in recruitment at some companies showed that executives had become more risk averse and "less willing to trade all costs for growth". "Many of these companies have grown very fast before; maybe they have gone a little too far."
Recruitment changes in the technology industry have worried some employees, who said on recruitment websites such as LinkedIn that they are worried about being laid off or unable to find a job. Many technology companies say they want to do more to reduce spending. Meta, Facebook's parent company, said last week that the size of its employees has more than doubled since 2018 and will significantly slow down recruitment.
On Thursday, twitter CEO Parag Agrawal told employees in a memo that the company would suspend recruitment and reassess the job invitation it had issued. Agrawal said twitter plans to reduce spending on outsourcing, consultants, employee travel, marketing and so on.
Dara khosrowshahi, chief executive of Uber, also told employees this month that the company would "regard recruitment as a privilege" and would be more cautious about when and where to recruit. Kosrosasi said that the sentiment of the market and investors has changed, and the company needs to focus on improving profitability.
Some companies that developed in the early stages of the epidemic also ran into trouble. Carvana, an online car dealer, announced that it would cut 12% of its workforce; Peloton, a fitness equipment manufacturer, said in February that it would cut 2800 jobs, including about 20% of the company's jobs.
Venture capitalist Vinod Khosla says smaller companies and start-ups may be more cautious because it may not be easy to raise large amounts of money quickly. 'This may lead some executives to have different ideas about whether to add new positions or expand the team, 'he said.
"Smart entrepreneurs must be cautious," kosra said. "When capital is cheap, they burn money," he said. "They spend a little more money to gain an advantage over their competitors or expand the size of the market."
In contrast, now "less money will improve efficiency," kosra said.
Maria colacurcio, CEO of syndio, a compensation data analysis platform, said that many topics among entrepreneurs have recently turned to how to save money. "Everyone is turning to cash hedging," krakursio said. "I don't want to raise money in this environment," which is something many peers are talking about. "
While many people are worried about the economic trend, Pollack said that the actions of well-known technology companies may attract attention and have a huge impact on the mood of the job market. "People are nervous," she said. "They are looking for signs and signals of what will happen in the future."
In any case, the shift is dramatic. Over the years, paying high salaries and doting on talented engineers have been regarded as a pride by the scientific and technological community. Eric Schmidt, former CEO of Google, once boasted of his efforts to retain "genius". He believes that bosses should listen to "smart creative people" who are difficult to get along with. Facebook has vigorously promoted the company's "charging" plan to encourage employees to take 30 days off every five years. Twitter's vacation policy was originally very abundant, and during the epidemic period, it added "rest days" to improve mental health throughout the company.
Such benefits are now the object of ridicule. A few days after musk announced its acquisition of twitter, David sacks, a technology investor and Musk's old friend, said that the failure of Twitter's operation was not caused by Jack Dorsey, its former CEO, but by the company's employees who doted too much.
"It really feels like Twitter employees are running the company," Sachs said He warned that executives were "pushed and bullied by employees". The answer, he said, was to fire: "Twitter has about 8000 employees, and no one knows what they are doing." He said musk could fire up to 6000 people.
Fortunately, Musk's actual plan seems to be much milder. A report leaked to investors shows that he will lay off less than 1000 employees and eventually recruit thousands of employees, which is far from the idea of sacks and Anderson to lay off 75%.
In addition, although the valuation of technology companies has been declining, it is unclear whether employees have lost their influence. The labor market is still very tight, and large companies are forced to compromise on returning to the office, allowing employees to work at home indefinitely and raising wages sharply. Just three months ago, Amazon doubled its base salary ceiling due to a fall in its share price. Perhaps it is these developments, as well as complaints about employees, that have led Silicon Valley investors into a tightening model.
Due to limited growth prospects and no signs of slowing employee compensation, the transformation of investors is more meaningful from a financial point of view. No matter what VCs say, it usually comes down to money. (Chen Chen)