Why Google and Meta are cleaning house by capitalizing on concerns about the economy

For more than two decades, top-tier digital firms such as Google and Facebook (now Meta) were known for their rapid hiring, lavish benefits, and diverse corporate cultures. Still, as a result of marketers’ cutting their advertising spending due to the extreme in Ukraine, adding prices, and other macroeconomic enterprises, Big Tech’s work culture is changing.

Google and Meta have significantly reduced recruiting in recent months, reduced employee benefits like laundry and travel, and started restructuring divisions.

Workers worry about further labor force reductions. Some judges claim that these developments indicate the beginning of a “white-collar recession,” or a reduction in job security and growth for professionals across all high-profile disciplines, not just technology.

Still, there’s more to these changes. The demands from the outside of frugality are true, but it’s also an excellent defense for companies like Google and Meta to purify their staff.
Alphabet, the parent firm of Google, and Meta have expanded their workforces to approximately 150,000 and 80,000 employees as they have become global corporations with respective values of $1 trillion and $385 billion. The current economic climate is giving management the chance to reevaluate expectations, put pressure on staff to start working harder with fewer resources and fire certain employees.

For a long time, spending at businesses like Facebook and Google was limitless, according to a recent departing Meta executive who requested anonymity out of concern for his or her career.

Certain rank-and-file employees believe that some big tech businesses have grown overly fat as well, not just their leaders. According to a Recode investigation, Google and Facebook workers gave the most money to politicians like Elizabeth Warren and Bernie Sanders, who supported breaking up Big Tech. They said that doing so would allow these businesses to revert to their more nimble and productive early startup days.

The periodic income of Google and Facebook, two of the most successful businesses in the world, is similar to several nations’ entire GDP. They can go to work to make payroll and repel profitable downturns, unlike lower software enterprises. Still, according to some business experts, it can be profitable for these companies to make further cuts than needed to boost productivity and prove to shareholders that they’re managing their finances responsibly. In the last month, the value of Meta’s shares has dropped by nearly 60 percent, while Alphabet, the parent company of Google, has seen a decline of roughly 30.

Employees have been openly advised by Google and Facebook that the corporations would start to expect more of them if they stay on. In a July internal message, Google CEO Sundar Pichai stated that employees “need to be more entrepreneurial” and approach their job with “more urgency, sharper concentration, and more appetite than we’ve exhibited on brighter days.” The New York Times quotes Meta CEO Mark Zuckerberg as stating, “I think some of you could decide that this location isn’t for you, and that self-selection is alright with me,” during a corporate all-hands meeting in June.

Employees who are subject to this executive pressure may feel as though their employment security has suddenly changed. Many employees at Facebook and Google already see the difference, even though the layoffs only recently began.

According to a current Google employee, doubts about whether they will receive increases to keep up with inflation were often brought up during the company’s regular all-hands meetings, or TGIFs, just a few months ago. Now, the employee claimed, the subject of layoffs is one that staff have more frequently. Recode met with a Google employee who said that the majority of their coworkers support management’s cost-cutting initiatives.

They told Recode that “people have incredibly understood” and that “we still have it so much better than other folks at the end of the day.” They nonetheless said, “This has produced a sense of worry and uncertainty about what we may anticipate from the organization moving ahead.”

These fears and uncertainties are also reflected in the workforce’s future employment prospects. Former Google workers had the option to accept a job offer from Meta, Apple, or other local tech companies that were vying for their expertise. However, most of these businesses have stopped hiring new employees in recent years.

There is undoubtedly a feeling that if the music stops here, there might not be a chair at another tech business, according to a Google employee. One of the biggest changes the IT sector has seen since the dot-com crash of the early 2000s is the fact that, in only a few months, the dynamics have changed completely and that employees now have less power over their employers.

That Google employee remarked cynically that although management’s claims of productivity don’t translate into increased efficiency, they are nonetheless successful in preventing employees from demanding greater perks. Additionally, it demonstrates to investors that Google takes its stock performance seriously.

Google and Meta have both had significant stock drops over the past two years, largely as a result of price increases, the Ukrainian crisis, changes to Apple’s privacy settings, and escalating competition from TikTok.

According to Keval Desai, a former Google executive from 2003 to 2009 who now heads the venture capital firm he created, SHAKTI, “I think these organizations that are extremely effectively run see it as an opportunity to simplify things internally when recessions come along or when things are softening.” “I do think that smart businesses seize opportunities and make unpopular choices,” you said.

Implementing unpopular decisions, however, may be challenging. Furthermore, increasing productivity at large organizations like Facebook or Google requires more than just making workers work harder. Some Google employees Recode talked with believed that management should concentrate on providing teams with greater clarity to be more productive.

There is a concern that employees aren’t working hard enough, but a Google employee remarked, “What I see is a lot of individuals working hard with unclear business goals.” They may not be making the finest business judgments, but they are unaware of this. One such is the seeming ambiguity over Google’s desire to emphasize its hardware business.

Additionally, in March, Google let go of 100 Google Cloud employees, offering them 60 days to find other positions with the firm. In response, several employees filed a petition requesting an extension of the search period. Even though Google Cloud is currently an unprofitable sector and is significantly increasing its income, layoffs nonetheless occurred.

Laszlo Bock, a co-founder of Humu and former director of Google’s People Operations teams from 2006 to 2016, agreed that some large tech businesses aren’t currently operating with the same level of operational rigor as they could be and that it could be time for a change.

In contrast to Google, which is increasingly focusing its research efforts on AI, Meta is prioritizing VR/AR development to further its metaverse aims as well as those of its competitors, TikTok and Reels. Google’s research center, Area 120, which works on projects unrelated to artificial intelligence, has just announced substantial changes.

According to reports, Meta has narrowed the focus of its brand-new experimental product division to only reels. More generally, Meta has started secretly disbanding several teams while giving staff 30 days to find other jobs inside the company. According to a recent Wall Street Journal report, Meta is making an effort to cut workplace costs by 10%, including by making layoffs of employees.

According to a recent departing employee, several Meta workers are looking for new jobs on metaverse-related projects, which Zuckerberg has prioritized. A former Meta employee who just departed the business stated, “There’s been a crazy race toward [Reality Labs] over the past six to nine months, and notably among the metaverse product division.” ” It appears that nothing else is as secure for the future of the organization.”

Some staff members and assiduity professionals are concerned that inordinate cost-slicing may backfire by suppressing hand invention—exactly the type of imagination that made these businesses notorious. Traditionally, tighter operations, thing-setting, and cost-slicing have been the styles used to increase productivity. Giving workers less freedom, inflexibility, and space to try and fail is how you goad creativity, according to Bock. I am not sure how you can boost innovation while still adding productivity.

Google gave its employees “notice periods” to find other jobs or quit.

In response to the economic slump, Google and Facebook’s parent firm, Meta, is reportedly cutting workers and placing some of them on conventional “lists” of 30 to 60 days to find a new position or quit. According to the Wall Street Journal, Meta has a standard “30-day list” of employees whose positions are being removed and expects to reduce expenditures by at least 10% in the upcoming months.

The parent company of Google, Alphabet, apparently adopted a different strategy, offering employees 60 days to look for a new job if their positions are about to be eliminated. According to those familiar with the plans, Facebook’s parent company is looking to cut expenses by at least 10%, while Google has forced certain employees to apply for new jobs. Employees whose functions are deleted by Meta are vulnerable to termination under a “long practice” if they are unable to get a new position within a month.

At the end of the second quarter of this year, 83,553 people were employed by the Mark Zuckerberg-led business. According to the source, “Google normally offers employees 60 days to seek new roles in the firm if their employment has been terminated.” More than 50 employees at Google’s incubator Area 120 were let go last month, and the firm offered them an additional 30 days to find work inside the business.

According to a Google spokeswoman, approximately 95% of employees found new jobs throughout the notice period. Alphabet and Google CEO Sundar Pichai hopes to make the firm 20% more efficient, implying job cuts, after recently cancelling projects at its research and development (R & D) branch named Area 120.

When addressing the audience at the Code Conference in the US this month, Pichai stated that the company is growing more uncertain about the macroeconomic climate. “Macroeconomic performance is connected to advertising expenditure, consumer spending, and so on,” he told the gathering.

If expectations are not met, Google has allegedly stopped employing new workers and urged some current workers to “shape up or ship out.” The Insider obtained a corporate letter from Google Cloud sales leadership in which they threatened employees with an “overall evaluation of sales productivity and productivity in general” and that “there will be blood on the streets” if the next quarter’s performance “doesn’t look up.”Zuckerberg stated in July that the company’s strategy is to gradually restrict staff growth over the coming year as big tech businesses lay off workers and halt new hiring.

After admitting that the social network has entered a profitable regression that would have a significant impact on the digital advertising assiduity, Zuckerberg stated that numerous “brigades are going to drop so we can move attention to other areas inside the establishment.”

Edited by Prakriti Arora