Shulou(Shulou.com)11/24 Report--

Silicon Valley falls into layoff panic "It's like a sword of Damocles, waiting for a long time and finally falling down. After learning the news (of being laid off), my heart was at ease. In fact, the company has been circulating for a long time before, and I also know that our group must be the most ruthless. "said one Meta hardware employee who learned of his layoffs.

Although the autumn sun in Silicon Valley was still warm and sunny, in many people's hearts, it was now a cold winter. Not long ago, they were working for rich technology giants, with enviable high-paying jobs and perfect human welfare benefits, but now they are unemployed at home.

Over the past two weeks, Silicon Valley has fallen into a panic during the layoffs as Twitter, Strip, Salesforce, Meta and other giants have announced layoffs. Some Chinese programmers report peace in friends and respond to questions from relatives and friends; some have set up mutual help WeChat groups, hoping to help unemployed compatriots find new jobs as soon as possible in the job market that has entered winter through recommendation and information exchange.

For some of the unemployed, the reality is especially harsh. Some hold H1b work visas and must find the next job extension visa within 60 days, otherwise they must leave the United States; some buy millions of dollars of real estate in Silicon Valley at the peak of the housing market, bearing a heavy burden of repayment, and the value of their shares and options has shrunk sharply; some are both laid off at the same time, and the original double protection of dual workers has become double risk.

A Meta programmer who learned of the layoff said helplessly that it was already the end of the year and companies were freezing recruitment, although there were still some interview opportunities, which were probably passive water (that is, they would not really offer). I am ready to spend half a year or more looking for a job, and I am ready for a big reduction in my salary package in the future. "At the end of this year, I don't know what I can do except brush the questions. "

However, even if there are no layoffs in this round, it does not mean that the job is safe. Meta will conduct annual performance reviews early next year and may also lay off some higher-paid employees because it is too expensive to lay them off now, according to a Silicon Valley HR employee. At that time, if the performance is not up to standard, there is no need to give high redundancy compensation.

Programmers are still ruminating that Google will be the next tech giant to lay off employees, and have even hired the same consulting firm that helped Meta lay off employees. At an analyst meeting following Google's earnings release last month, Google acknowledged a hiring freeze and re-evaluated human resources needs across departments, but also hinted at the possibility of layoffs.

100,000 jobs may be laid off this year. The Silicon Valley job market is no longer where tech giants wave checks, offer high salaries and compete for talent. In Silicon Valley programmers 'parties and WeChat groups, chat topics always revolve around where to recruit again, who gets a big package, and where to change houses after the stock surge.

The past two years seem to have been the best time in Silicon Valley in more than a decade. Tech companies are reporting strong earnings, expanding aggressively in response to expected business growth and laying out new technology areas for the future.

Not long ago, the giants were expanding massively. Google CFO Porat said Google hired 12,800 employees in the third quarter and currently has a total of 186,800 employees worldwide, up nearly a quarter from a year earlier. Meta's global workforce at the end of the third quarter was 87,000, up 30% from a year earlier. Salesforce revealed in its August earnings report that its headcount had increased 36 percent over the past year.

However, it only takes six months to go from dog days to 39 days. In the past six months, everything seems to have stalled, the stock prices of the giants have fallen sharply, earnings are lower than expected, the most expensive personnel costs have become the first budget cuts, and the hot recruitment market has turned into a cold winter.

Within months, Netflix, Intel, Stripe, Twitter, Meta, Salesforce, Lyft, Twilio, Docusign, one tech company after another announced layoffs. A wave of layoffs swept through Silicon Valley, and the richest tycoons were also affected. Even Google, Apple and Amazon, which have yet to announce layoffs, have frozen hiring. Perhaps under the impact of this wave of layoffs, they are also brewing the next cost-cutting move.

According to Layoffs.fyi, a San Francisco-based technology layoff statistics website, 100,000 jobs may have been lost this year. According to Roger Lee, founder of the website, recruitment, human resources and sales teams were the most laid off, and engineering staff were relatively safe. But he also stressed that no one knows how long this wave of layoffs will last.

Boots are falling one by one. The new wave of layoffs in November came from Social networks. On November 5, Twitter fired more than half of its employees at one time, leaving more than 3700 people without jobs. Musk wanted to give up the sky-high acquisition in the downturn, but under Twitter litigation pressure, he was forced to complete the deal at the original price of $44 billion, of which $13 billion came from bank loans.

Musk must turn Twitter into a profit as soon as possible, and use Twitter's profits to repay the repayment pressure of more than $1 billion a year. Twitter lost $221 million on revenue of $5.1 billion last year and another $270 million in the second quarter of this year. Cutting labor costs is the direct reason Musk can't wait to make big layoffs. However, the brutal layoffs without communication and the stingy compensation standards also make Twitter a negative example of layoffs in Silicon Valley.

Four days after zuckerberg's edict, silicon valley has seen its biggest layoff storm. On Nov. 9, social networking giant Meta announced more than 11,000 job cuts, or 13 percent, and a hiring freeze until the first quarter of next year. This is Meta's first significant contraction in its 18-year history.

The layoffs were also expected. Zuckerberg warned employees in July that the company was going through the worst of times; Meta froze hiring in September and hired consulting firm Bain to develop layoff plans; Zuckerberg repeatedly hinted to employees and investors in October to cut costs, and the human resources department had prepared a list of layoffs. Even the timing of layoffs and compensation standards were revealed in advance.

Compared to Musk's minimum of two months 'severance pay when Twitter laid off employees (signing a waiver of power plus one month's salary), Zuckerberg was obviously much more generous, and the layoff standard exceeded the average level in Silicon Valley. Meta employees who are laid off will receive 16 weeks of pay, plus two more weeks for each year they work, and their and their families 'insurance will be extended for six months.

However, even if employees and the outside world had been mentally prepared for Meta layoffs, when Zuckerberg himself announced the layoffs of 13%, it still brought unprecedented impact to Silicon Valley. After all, 11,000 people will lose their jobs as a result, three times the number of Twitter layoffs last week.

When Zuckerberg, 38, officially announced the layoffs, he admitted that he took full responsibility for these decision-making mistakes and admitted that he had been too optimistic about the growth prospects, resulting in too fast growth. But he also said he had to make the hardest decision and was deeply sorry for all affected employees.

Before the outbreak in March 2020, Facebook had only 48,000 employees. In Silicon Valley layoffs after the outbreak, Facebook announced a high-profile plan to hire 10,000 people (mainly product and engineering teams) that year and continue to recruit 10,000 in the coming years. But just two years later, Meta now has 87,000 employees.

The layoffs will spread across Meta's multiple business units. According to Sina Technology, recruitment and business development departments have become the departments with the highest proportion of layoffs, and hardware departments such as watches and Portal video chat screens will also be cut directly. These departments with no output returns have been abandoned by Meta Strategy.

The safest divisions in Meta Group are social advertising, which makes money, and Short Video, which Zuckerberg hopes to compete with TikTok. It is worth mentioning that the team of the meta-universe will also be affected in this layoff, but the magnitude is relatively small, not the focus of this round of layoffs. Faced with internal and external pressures, Zuckerberg had to start cutting back on his dream investment.

Last fall, Zuckerberg ambitiously announced his full commitment to Meta Universe, even renaming the company Meta. Meta has invested more than $15 billion in Meta Universe in the past year alone. At that time, Meta's market capitalization even exceeded the trillion dollar mark, becoming the fifth technology company in the trillion dollar club.

In just one year, Meta's market value plummeted by more than 70%. They are now worth less than $300 billion, back to where they were in 2016. Although the sharp decline in stock prices has been caused by the Fed's successive sharp interest rate hikes, Meta's performance has also disappointed investors.

Meta's third-quarter earnings report, released last month, saw revenue decline for two consecutive quarters year-on-year, and net profit fell 52% year-on-year. Meta spending soared 19 percent while ad revenue declined. After the earnings announcement, Meta's share price plummeted another 20%. Zuckerberg not only suffered a sharp decline in his own wealth, but also matured under pressure from Wall Street.

In the third-quarter earnings report, Reality Labs, which is responsible for implementing Zuckerberg's meta-universe dream, suffered an operating loss of $3.67 billion, and VR device revenue was also sluggish. Meta predicted that Reality Labs would continue to lose huge sums next year.

And investors don't buy into Zuckerberg's meta-universe dream. Altimeter, a major Meta investor and hedge fund giant, issued an open letter urging Zuckerberg to reduce spending by at least $5 billion a year, limit Meta Universe spending to $5 billion a year, and lay off at least 20% of its workforce. "Meta needs to be leaner and more focused," Altimeter wrote in an open letter. "

A Meta employee who was not laid off complained to Sina Technology that although Zuckerberg started Facebook and built the company into a global Social networks giant,"he is a terrible product manager, and almost all the products he wants to make fail." Zuckerberg insisted on launching the meta-universe project. Our employees felt that the product was still far from mature and there was no need to invest so much. "

Since the outbreak, Zuckerberg has rarely appeared at work, spending most of his time with his family on Hawaii's Isle of Kauai, where he has spent nearly $100 million buying a lot of land. Although he occasionally flew to Meta headquarters by private jet, his time at the company was getting shorter and shorter, and he no longer interacted with employees as closely as before. Due to frequent protests against San Francisco homes, Zuckerberg has sold their downtown mansion this summer, keeping only the Palo Alto home near their headquarters.

Google has also hired Bain Consulting to help Meta with layoffs, which appear to be on the agenda. Google suspended hiring for half a month last month, requiring teams to reassess their current human resource needs. Google CEO Pichai asked employees to increase their current productivity by 20%, and to show "a greater sense of urgency, a higher concentration, and a stronger hunger than 'sunny days'."

What puts Google, Meta and Twitter under enormous pressure is advertisers tightening their budgets. Advertising accounts for more than 80 percent of Google's revenue, and Meta and Twitter account for more than 90 percent. Google's third-quarter revenue and profit both fell short of market expectations, and YouTube advertising revenue fell for the first time.

Ruth Porat, chief financial officer of Google's parent company, candidly admitted at an analyst conference after the earnings that Google's advertising platform and video advertising growth slowed as advertisers tightened ad spending, reflecting growing concerns about uncertainty ahead.

Philpp Schindler, Google's chief business officer and senior vice president, explained specifically that finance is the industry where advertising has declined most, and advertising in insurance, lending and cryptocurrency industries seems to be close to stagnation. He also highlighted the negative impact of a stronger dollar on the company's performance.

Panic or snowball advertisers tighten budgets, and it's not just internet companies that suffer. Advertising spending fell for the fifth straight month in September, down 5% in tandem, according to Standard Media, an advertising research firm. Channel ad spending fell 6% in the third quarter, involving cable, social advertising, search advertising and many other areas.

Even in the corporate market, the giants are shrinking significantly. Enterprise software giant Salesforce laid off nearly 1000 people this week, only to be glossed over in Twitter and Meta's deluge of layoffs. According to Protocol, Salesforce's layoffs may be 2500. Salesforce's layoffs were explained when Salesforce's performance was significantly affected by slowing economic growth and shrinking budgets for business users, and began to lay off workers to prepare for the winter.

Nikolai Roussanov, a professor at the Wharton School of Business at the University of Pennsylvania, says that while some companies may be financially stronger than others to withstand an economic downturn, it now appears that no company is completely immune.

Rusanov believes that the current fear of economic recession is not without reason. As the fear becomes more widespread, it will directly affect consumer psychology and affect investment activities, thus becoming a snowball. What the tech industry is experiencing now may be a precursor to other industries.

Ahmed Banafa, a professor of electrical engineering at San Jose State University, believes technology companies have hired heavily over the past year because they believe the U.S. economy will accelerate after the epidemic recedes, bringing them more business and revenue. But the performance pressures of severe inflation and the stock market slump caused by the Fed's continued sharp interest rate hikes have made these tech giants recognize reality.

In Banafa's view, this year's wave of layoffs is a feverish behavior by technology companies, returning to the size of companies in 2020 and preparing for the recession. Those who are laid off can also find employment opportunities in non-tech companies (of course, salary levels will drop significantly).

After the dot-com bubble burst in 2000, banafa experienced layoffs himself. From his own experience, he advised Silicon Valley people to always have plan B.

When the tide goes out, we know who's swimming naked.

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