Silicon Valley to Austin, a grim new reality is setting in across the US tech landscape: a heady, decades-long era of rapid sales gains, boundless jobs growth and ever-soaring share prices is coming to an end.
Similarly gloomy pronouncements had already been dribbling out for weeks. Amazon.com has too many workers and too much warehouse space, and its business is hurting from rapidly rising inflation costs. Facebook parent Meta Platforms is easing hiring and paring expenses, and Twitter instituted a hiring freeze and withdrew some job offers ahead of a planned takeover by Musk.
The spectre of job cuts has begun to haunt the Silicon Valley psyche. On Blind, an app that employees can use to talk anonymously about their employers, discussions about hiring freezes increased by 13 times from 19 April to 19 May compared to a year earlier. Layoff discussions increased by five times, and talk about a recession is up by 50 times.
The shock is probably the biggest at companies like Meta, Twitter and Uber, which were still in relative infancy the last time the tech industry was hit, during the financial crisis in 2008. Things were worse still when the dot-com bubble burst at the turn of the century. The difference this time is that the pandemic reinforced how important and necessary many of these tech products are, giving them some cushion against the initial economic ravages of the Covid-19 shutdowns.
It’s possible “we’ll start to think about [tech] sort of like the gas lines going into our homes, or electricity”, he said. “That’s kind of a new thing for Silicon Valley. It’s sort of a Detroit kind of existence where cars just became the backdrop, the furniture of the region.”