Silicon Valley’s vibe shift

The Reddit blackout was only meant to last a couple of days. Now, as Redditors dig in to protest a series of new company policies and Reddit leadership refuses to compromise, it’s looking like this temporary blackout is going to be a standoff pitting some of Reddit’s most necessary and powerful users — the people who moderate the platform’s many subreddits — against the top of Reddit’s food chain: co-founder and CEO Steve Huffman.

Thousands of Reddit forums, or subreddits, went private on June 12, primarily to protest the company’s decision to start charging third-party developers for access to its data starting in July. The blackout was supposed to end on the morning of June 14, and some subreddits are back online. But others decided to stay down indefinitely. Reddit continues to refuse to give in to their demands and has lost patience as the blackout wears on. Redditors have claimed that Reddit has begun forcing mods out of their subreddits in order to reopen them.

Meta laid off 5,100 more employees on Wednesday in its third round of mass cuts in the past three months, according to executive remarks in a company meeting on Thursday. That brings the company’s total layoffs to 10,600 in the first half of 2023, as part of Mark Zuckerberg’s planned “year of efficiency” to cut costs, shake up company culture, and narrow focus in response to slower growth in the tech industry. The company has also closed 5,300 open roles, Meta’s head of people, Lori Goler, told employees.

The company’s executives announced details about the layoffs on Thursday morning in a Q&A with employees that Vox obtained a recording of.

It was in late March that Silicon Valley decided that it’s no longer shameful to accept massive investment dollars from Saudi Arabia.

“The more I think about it, the more Saudi almost feels like a startup,” Adam Neumann, the WeWork founder, told the audience of the Miami conference hosted by the kingdom.

Meta conducted its second round of mass layoffs in the past six months on Wednesday, ahead of another set of layoffs planned for May.

The layoffs are a major cause for concern among Meta’s remaining staff, who are supposed to hear directly from Meta CEO Mark Zuckerberg in a company Q&A scheduled for Thursday at 11 am PT.

If you work in tech, you had probably heard of Silicon Valley Bank before now. If you’re not familiar with this seemingly regional bank, nobody’s blaming you. It had billions of dollars in deposits, but fewer than two dozen branches, and generally catered to a very specific crowd of startups, venture capitalists, and tech firms. Anyway, you’re here now — Silicon Valley Bank isn’t.

Banking regulators shut down Silicon Valley Bank, or SVB, on Friday, March 10, after the bank suffered a sudden, swift collapse, marking the second-largest bank failure in US history. Just two days prior, SVB signaled that it was facing a cash crunch. It first tried to raise money by selling shares and then it tried to sell itself, but the whole thing spooked investors, and ultimately, it went under. On Sunday, March 12, the federal government said it would step in to make sure all of the bank’s depositors would have access to their funds by Monday, March 13. Regulators also shuttered another bank, Signature Bank of New York, which had gotten into crypto, and the federal government said its depositors’ money would be guaranteed as well.

It’s going to be the “greatest force for economic empowerment” society has ever seen. It’s going to take away our jobs. It’s going to “generate a new form of human consciousness.” It’s going to kill us all.

Generative AI — or the new artificial intelligence that can create original content, including essays, fine art, and software code — is the talk of the town in Silicon Valley.

“If you’re not paying for the product, you are the product” has long been a common refrain about the business of social media.

The saying implies that you, the user, aren’t paying for apps like Instagram and Twitter because you’re giving away something else: your attention (and sometimes your content), which is sold to advertisers.

When Rob Fishman, a former account executive at a tech startup, was laid off in January, he wasn’t sure how to talk about it.

Even though tens of thousands of tech employees at startups like his — and at major tech companies like Google, Meta, and Microsoft (which owns LinkedIn) — were being laid off, there was still, he said, a stigma attached to talking about it.

Microsoft has officially taken the lead in the race to build a search engine powered by generative AI. On Tuesday, the company debuted the rumored OpenAI-infused versions of its Bing search engine and Edge web browser, proclaiming them to be the next evolution of the internet — an evolution that so far seems to be crafted by Microsoft. Not Google. And Google seems increasingly concerned about that.

Google has spent the last two decades as the most popular search engine in the world. Search is also Google’s biggest revenue stream, thanks to all the ads it places all over search results. So it’s unusual to see the company scrambling when it comes to what’s always been its bread and butter. Yet, that seems to be exactly what Google is doing in response to Microsoft’s plans to integrate AI into Bing, its own search engine, which seem to be further along than Google’s. After Microsoft invited journalists to see its new AI products last week, Google scrambled to make announcements and show off demos of its own. In other words, Google, which long since surpassed Microsoft’s search and web browsing tools, is now playing catch-up.

Tech layoffs have become a fact of life over the last year and especially so in the last few months, as tech firms big and small exact layoffs to reckon with their slowing growth after seeing record profits during the pandemic. What’s less certain is just where these tens of thousands of tech workers will go next.

The good news is that there are still many open jobs for these workers, not only within the tech industry but also, increasingly, outside of it. There’s also increased interest in starting new businesses. And while the layoffs will certainly contribute to some people’s decisions to leave the tech industry or go out on their own, it’s worth looking at the problems with the industry itself, from burnout to bad layoff practices, that are making it a little easier for people to choose a life after tech.

When Meta’s head of people, Lori Goler, posted a memo to the company’s internal employee message board last summer asking employees to work with “increased intensity,” many workers pushed back.

In internal comments Recode reviewed, some employees took issue with the idea that they weren’t working hard enough already. Others felt the problems weren’t with the rank and file, but with management and the company’s massive size and bureaucratic structure, which some said made it hard to move quickly on daily work or to give feedback to leadership. Another complaint was simply that some Meta employees didn’t want to do more work for the same amount of money. Because many Meta employees are paid in company stock, which has declined precipitously in the past year, the workers would actually be doing more for less.

Microsoft appears to be on the cusp of being something it hasn’t been in a long time: cutting-edge. It’s a label the company lost a long time ago after a series of small startups grew to become Microsoft’s biggest competitors. Google, for example, started out as a nimble, innovative upstart and eventually bested Microsoft in browsers, email, and mobile operating systems. But now Microsoft might be the nimble, innovative company that bests Google in artificial intelligence. And it’s all thanks to OpenAI.

OpenAI is the hottest AI lab out there with one of the buzziest and most exciting products: ChatGPT. And Microsoft is its very good friend. On Monday, the two companies announced that Microsoft was investing $10 billion into OpenAI (that’s on top of the $3 billion Microsoft has given OpenAI since 2019), and Microsoft is rumored to be adding ChatGPT to its Bing search engine. Yeah, that’s right: The much-maligned, little-used Bing might finally become a real competitor to Google’s search.

The Justice Department and eight states are suing Google over its digital ad business, accusing the company of using its dominance in the market to harm competitors and force ad buyers and sellers to use its products at less favorable terms for them than those another company might offer. Meanwhile, Google takes a healthy percentage off the top — at least 30 percent, the suit says.

“Website creators earn less, and advertisers pay more,” Attorney General Merrick Garland said in a press conference announcing the lawsuit.

Microsoft revealed last week that it will lay off 10,000 people throughout 2023. But don’t think that means the company is having money problems. On Monday, the company announced that it’s investing billions of dollars into the hot artificial intelligence platform OpenAI.

This is Microsoft’s third investment in the company, and cements Microsoft’s partnership with one of the most exciting companies making one the most exciting technologies today: generative AI. It also shows that Microsoft is committed to making the initiative a key part of its business, as it looks to the future of technology and its place in it. And you can likely expect to see OpenAI’s services in your everyday life as companies you use integrate it into their own offerings.

For years, it seemed as though nothing could stop Amazon’s explosive growth and success. Even a pandemic couldn’t slow it down: In fact, in early 2021, the tech and retail giant reported its largest quarterly profit ever.

But a lot can change in just two years: Since then, founder Jeff Bezos stepped down and named a new CEO, the online shopping boom slowed, and Amazon had to dig itself out of a costly and overly aggressive warehouse and staffing expansion. The past two months have been a strange, even frightening, time inside the company, current and former employees told Recode: Amazon announced unprecedented layoffs of more than 18,000 corporate employees and began culling areas of the business, like its Alexa voice assistant division, that Bezos had long championed.

Unsurprisingly, people are still moving to Austin, Texas. More surprisingly, people are also moving to San Francisco.

Over the last 12 months, San Francisco has seen the second-biggest worker population gain of any area in the United States, according to LinkedIn. The January data, which measures when people update their locations in their profiles, showed that for every 100,000 LinkedIn users, 83 moved to San Francisco in the last 12 months. The workers largely came from Los Angeles, Dallas-Fort Worth, and Washington DC.

At the opening of Meta’s last company-wide Q&A of 2022, Mark Zuckerberg sounded disappointed but determined.

“We made our plan for ’22 in terms of how we thought the business was going to go, and obviously it hasn’t gone the way that we wanted to,” Zuckerberg told employees in an audio recording of the meeting that Recode obtained.

Meta has had a tough year.

In 2022, the company saw its stock price drop to a historic low, laid off 11,000 of its employees, and faced intense skepticism from impatient investors about the feasibility of its futuristic metaverse vision. But that’s not going to convince the tech giant to change its plans.

In a call with workers at Meta on Wednesday, founder and CEO Mark Zuckerberg told employees, “You’ve really put your heart and soul into this place,” before laying off roughly 11,000 people. Meta is joined by a number of other tech companies doing massive layoffs this year, and the trend serves as a stark reminder that your company, no matter how much you give, won’t always love you back.

The layoffs in Silicon Valley come after a decades-long trend at tech companies to “live and breathe” your job and make it part of your identity. A decade ago, Uber gloated that its workers “Always be hustling,” while WeWork espoused “Rise and grind.” These companies touted their rock walls, laundry services, and exclusive chefs to show management’s largesse. But really, many of these perks could also be interpreted as just ways to keep people in the building past their normal working hours.

Layoffs are coming to Silicon Valley, and tech companies better get better at them if they want to keep from making a bad situation worse.

Last week, Twitter laid off half its workforce. Stripe laid off 14 percent. Now, Meta is reportedly preparing to lay off thousands of workers — the first major headcount reductions in the company’s nearly 20 years of existence. There soon could be first-time layoffs at other tech companies as they deal with slumping ad sales and other economy-wide headwinds, like inflation and rising interest rates. How they conduct those layoffs, however, won’t just affect their financial performance now, but could have long-reaching effects on the success of these companies.

For nearly two decades, top-tier tech companies like Google and Facebook (now Meta) were known for their rapid hiring, luxurious perks, and corporate cultures of abundance.

But now, as rising inflation, the war in Ukraine, and other macroeconomic factors have caused marketers to slash their advertising budgets, Big Tech’s work culture is changing. In recent months, Google and Meta have drastically slowed down hiring, cut back on perks like employee travel and laundry service, and begun reorganizing departments. Employees fear deeper staff cuts are ahead. Some economists say these moves are a sign that we’re heading into a “white-collar recession,” or a decline in job growth and security for professional workers, not just in tech, but also in other high-skilled industries.