As tech tightens payrolls, middle managers at risk
As Meta Platforms Inc., Alphabet Inc. and other Silicon Valley behemoths look to lighten payrolls after years of feverish hiring, a clear target has emerged: the middle manager.
Meta will be cutting some layers of management, Chief Executive Officer Mark Zuckerberg said on the company’s earnings call last Wednesday, naming 2023 its “Year of Efficiency.” The company let go of over 11,000 workers last year, 13% of its workforce, in its first major layoff.
This is “just the beginning,” said Susan Li, the company’s chief financial officer. The stock staged the biggest single-day rebound in nearly a decade after reporting revenue that beat expectations.
Recent layoffs at Alphabet, meanwhile, revealed a startling stat: Google employs more than 30,000 managers, according to remarks Fiona Cicconi, Google’s chief people officer, made to staff. The company eliminated 12,000 jobs this month, or 6% of its workforce.
At Intel Corp., managers’ pay will be slashed alongside top executives’ in an effort to shore up cash as the company faces intensifying competition and a plunge in demand for personal computers.
On Tuesday, video conferencing service Zoom said it was cutting 1,300 jobs, or about 15% of its workforce.
Beyond tech, similar cuts are emerging. FedEx Corp. is reducing global officer and director jobs by more than 10% to make the company “more efficient, agile,” according to CEO Raj Subramaniam.
The moves come as middle managers everywhere are under increasing pressure from both above — receiving missives from their bosses to do more with less — and below — enforcing return-to-office policies and navigating new hybrid work arrangements.
In tech, management is under particular seige. The conviction that top tech companies need little more than core engineering teams is perhaps embodied most fully by Elon Musk’s “hardcore” Twitter 2.0. S ince taking over, Musk gutted the company’s 7,000 staff.
“Elon, what’s the one thing that’s most messed up at Twitter?” Musk was asked in October. His reply: “There seem to be 10 people ‘managing’ for every one person coding.”
Above all, though, the current round of layoffs in Silicon Valley are primarily meant to placate investors who think tech employees are coddled, according to Peter Cappelli, management professor at the Wharton School of the University of Pennsylvania.
“People announce layoffs because it sounds good, it’s what investors like to hear,” Cappelli said.
Many companies are announcing job cuts because so many others are, he said. If they don’t, then they’ll have to justify that choice. Though he noted there’s an element of political theater in blockbuster job cut numbers: Companies tend to telegraph more layoffs than they ever carry out.
When managers are let go, he said, “it doesn’t necessarily lead to efficiencies, and there’s no evidence, really, of productivity bumps.”