Job Losses in Silicon Valley

Last year, the tech industry lost 2,60,000 jobs—more than in the dotcom meltdown two decades ago. There is little evidence that this will let up in 2024. The technology field is shifting in a direction that is not a good trend for Indian technology workers in the USA on H-1B visas

By Kenneth Tiven

Every aspect of life in the United States feels like it is experiencing a generational change. The technology field is shifting in a direction that is not a good trend for Indian technology workers in the USA on H-1B visas. Silicon Valley’s high-tech enterprises are presumed to be industrial leaders. Cost-cutting with large-scale layoffs benefits shareholders because investors see this as a sign of management maturity. Tech industry leaders claim they are realigning key priorities, describing this as “transformation” to become “future-ready”. However, many observers of the tech company behaviour acknowledge that this is also an emotional, cultural reset. Google described this a few years ago as an issue of retaining the best talent rather than having the most people. Their way to do it was to have the most outrageous perks.

The scale of this shift is significant. Last year, the industry lost 2,60,000 jobs—more than in the dotcom meltdown two decades ago. There is little evidence that this will let up in 2024. Investors are indeed thrilled. Meta’s shares, for example, are up over 170% amid its downsizing talk. And where stock prices go, chief executives follow, suggesting that layoffs will increase. Many will be H-1B expatriates who have spent several years in America and started families with children in schools. Unless they can quickly find other employment, they have to return to their home countries.

These layoffs are the visible element of changing attitudes in American corporations. Upheaval brings uncertainty, which has become a constant feature of business life today. A successful owner of a medium-sized technology company told me that attending two weeks at an MBA university seminar was an eye-opening experience. “All emphasis was on making money quickly, gaining scale. Nothing about long-term growth, customer or employee retention, and loyalty. It was take the money and run”, claimed the disillusioned computer whiz.

In the media, as elsewhere, we have experienced this phenomenon where a new leader arrives, promptly begins a reorganisation, and upends the familiar reporting relationships. Or, a consultant suggests a new strategy, which takes up everyone’s time and attention for months until it is back to business as usual, only with a new mission statement and powerpoint graphics. Mergers of companies produce a similar result.

Ed Zitron is a journalist focused on technology. He is an incisive voice when it comes to the ways that companies have made their products worse, their user experiences more exploitative, and their business models more unsound than ever in the pursuit of more and more growth regardless of what else happens. He has a new podcast in development called “Better Offline”. He says: “When I wrote The Rot Economy, it was very much about tech, but it’s become obvious that applies to a lot of the economy in general, which is really upsetting to me because it’s not like I want the Rot Economy to exist, but it very much does. And the way that Boeing has handled things, the idea of cost cutting with something like a plane that goes in the sky, is just very upsetting to me indeed.”

“The term Rot Economy means conflating scale with success. Bigger is not always better. Indeed, bigger can be so much worse, especially when bigger means you are losing more money than you are spending, which is generally a no-no in the business world (unless you are a publicly traded company, in which case it’s good).” He adds: “Then you get companies like Meta and Google, which make $10 billion and $20 billion of profit in a quarter and still lay off 10,000 people just to show more growth, more growth, always bigger, always bigger. Not better, worse user experience, unhappier employees, laid off employees, but more money, more funny money, just to be clear. It is very upsetting and it upsets me the more I think about it, which is good because I do it a lot.”

During the Pandemic, tech companies were winners as stuck-at-home consumers used Zoom meetings, watched Netflix movies, and took Peloton rides—all of this boosting those companies and services. Tech companies’ stock went up. As the pandemic impact fades, investors are seeking safer bets, meaning tech companies are declining in appeal, which partially explains some of the belt-tightening. Additionally, the biggest tech companies are now mature, no longer providing investors with massive value growth from the boom times of previous decades. Among the ramifications is lowering demand for H-1B holders with technology expertise. Will some of that knowledge now impact the technology sector of India? 

—The writer has worked in senior positions at The Washington Post, NBC, ABC and CNN and also consults for several Indian channels