Big Tech’s apology tour

Good morning! Meta announced that it has laid off 11,000 employees this week, and as Protocol first reported, Salesforce is also planning mass layoffs. Winter has arrived for the tech industry. And this is only the beginning.

Is it too late to apologize?
Mark Zuckerberg and Jack Dorsey recently did something sadly rare in the tech industry: They admitted they were wrong.

After a particularly painful spate of Twitter layoffs under new ruler Elon Musk, Dorsey admitted that he was to blame for the company’s too-rapid growth. And when the Meta lost 11,000 workers, Zuckerberg used a similar talking point.

Acts of remorse will likely do little to calm the fears of the thousands of employees who are now out of work ahead of the holiday season. But Dorsey and Zuckerberg’s olive branches at least stand in contrast to some of the more brutal firings elsewhere in the industry.

At Salesforce, for example, recently laid-off employees received a two-month severance package, Protocol sources said, which is a drastic reduction from what the company previously provided and markedly less generous than the 16-week Meta.
In Meta, employees also received additional severance pay based on their tenure with the company. At Salesforce, employees who worked there for more than a decade received the same packages as those who worked there for a year, the sources said.
Salesforce did not respond to a request for comment.
It’s amazing how fast technology falls. Many, especially young workers, find it hard to remember a time when the industry was hit so badly. Even during the Great Recession, companies like Intel used downtime as a key opportunity to expand.

Over the last decade, capital has poured into this sector like the mighty Mississippi. This has supported thousands of startups, many of which had no real path to profitability. And with seemingly limitless growth potential, companies have increased their workforce by the thousands to support ever-higher sales targets.
Meanwhile, vendors like Salesforce and Facebook have spent billions over the last two decades to take over businesses, creating a new wave of commercial and consumer tech giants. And Amazon, Microsoft and Google cemented their status as giants as companies scrambled to adopt the cloud and consumers spent most of their lives online.
Nothing seemed to stop the impenetrable technology industry. Winter will never come to Westeros.

The pandemic has briefly reinforced this mindset, given the massive growth of IT providers like Zoom and DocuSign, as well as increased demand for e-commerce and other digital services.
But investors quickly grew nervous about the amount of money companies were spending, as well as how quickly consumers were reverting to pre-pandemic behavior. And as sales hit new all-time highs, the question quickly arose of when the boom would collapse, not if it would.
Now some of those acquisitions, like Salesforce’s $27 billion deal with Slack, look like major commitments as profitability becomes paramount. With huge cloud and software bills, companies are increasingly looking to cut costs. With historical inflation, consumers have rapidly changed their purchasing habits. And as a result, providers are laying off workers at an alarming rate.
Winter has come with a vengeance. While customers will certainly continue to spend money on IT services, the question of where this money will be spent, as well as how much this investment will grow, remains open. This means that the growth expected by many providers is likely to be delayed for years, if not indefinitely.

Meta and Twitter have their own issues that may take some time to resolve. But for others in big tech, like Salesforce, the last few months of the year are usually quite lucrative. This is when many of the biggest clients are renewing, making the timing of layoffs even more notable.
The end of technical layoffs is not far off. In fact, some industry insiders expect them to resume with even more enthusiasm after the upcoming holiday season. Perhaps now all we can ask is that CEOs follow in the footsteps of Zuckerberg and Dorsey and at least try to show remorse. They can then hop on their personal jets and head to their tropical farms.