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FUTURE OF WORK
The Great Betrayal: After Callous Layoffs, Workers Are Done With the Full-Time Work Model
On January 20, Justin Moore, a software engineer at Google, woke up to discover his account was deactivated. After over 16 years at the company, this was the only information he received to tell him that he was one of the 12,000 employees laid off.
And he’s not alone. Amidst 130,000 tech layoffs in the last 3 months, 62% of workers said they had lost faith in the safety of full-time employment.
In November we partnered with Pollfish to survey 500 knowledge workers—including those that had recently been laid off—to better understand how the recent wave of layoffs had impacted their sense of security and stability in full-time employment.
Here’s what we found:
- 89% said they would like to have more control and flexibility over their work schedule than traditional full-time employment can offer.
- 74% said that the recent waves of layoffs have made freelance work more attractive than before.
- 66% said that the recent waves of layoffs have made them lose trust in the stability and security of full-time employment.
- 62% said that the recent waves of layoffs have made them feel less secure committing to one employer.
The results reveal what may be a seismic shift in how highly-skilled workers feel about full-time employment.
Over the last year, we saw the Great Resignation, The Great Reconsideration, and Quiet Quitting—now, in the wake of layoffs, we’re seeing signs of a new trend: The Great Betrayal.
CHART OF THE WEEK
Big Tech No Longer Safe From Activist Investors
What’s behind all these layoffs? Many companies claim they over-hired, which is clearly part of the story. But maybe there’s something else going on.
As interest rates go up and valuations come down, stock prices get closer to their actual value—which is precisely when activist investors start circling.
For a decade, big tech was insulated from this threat by low interest rates, investor FOMO, and massive profits. Now things are getting real.
“The whole tech industry of the last 15 years was built by cheap money,” said Sam Abuelsamid, principal analyst with Guidehouse Insights, told the New York Times. “Now they’re getting hit by a new reality, and they will pay the price.”
As Liz Hoffman pointed out in Semafor, “Elliott Management has a multibillion-dollar stake in $156 billion Salesforce, joining fellow activist hedge fund Starboard, which has been there since the fall. Chris Hohn’s TCI has been rattling the cage at Google parent Alphabet, pushing for 37,000 job cuts on top of the 12,000 the company has already announced. Altimeter Capital wants Meta to stop pouring money into its virtual-reality headsets.”
In other words, the sharks were already at the table—now they’re starting to nip.
“Like many other companies in a zero rate world,” Altimeter wrote in an open letter calling for headcount reductions, “Meta has drifted into the land of excess—too many people, too many ideas, too little urgency.”
TCI asked directly for Alphabet headcount reduction in a similar letter in November. For what it’s worth, Alphabet’s C.F.O., Ruth Porat, denied that investors like TCI were behind the layoffs.
Whatever the explanation, the layoffs have burst the dream of big tech job security.
“For a whole generation of elite knowledge workers, FAANG provided the ultimate career exit strategy,” Noah Smith wrote in his Substack. “If your startup failed or you didn’t like academia or you were just looking for a second act in life and were decently good with numbers, Big Tech was there waiting for you with an offer that would land you a nice house in a fancy coastal city, a bunch of brilliant and friendly co-workers, and a comfortable retirement.”
Not anymore.
Investors are forcing companies to tighten their belts and reduce headcounts. That in turn is eroding the already endangered sense of stability that used to come with a big tech job.
MISSION MUST-READS
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Freelancers Are Happier With Their Pay Than Everyone Else
Feeling underpaid? More Americans are finding financial satisfaction and professional autonomy in freelance work.
PARTING TWEET
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