Tech companies have long been known for their lavish office perks such as free lunch, on-site dry cleaning, and even paid egg-freezing services, all of which have been used to attract top talent and keep employees happy. However, with changes brought about by the economic slowdown, this is all changing. Layoffs.fyi, which tracks job cuts in the tech industry, reported that the tech sector has cut nearly 200,000 jobs since the start of 2023. Google has reduced hours for some on-site cafeterias, Twitter has cut back on free lunch, and Meta employees have complained about reduced snacks and cereals in the cafeterias. To make matters worse, numerous tech companies have also opted to scale back their annual holiday parties.
This downward trend of austerity does not seem to be coming to an end anytime soon. Companies plan to make cuts to benefits as long as the labor market continues to remain tight, according to experts. Furthermore, AI and offshoring of work have made it more difficult for tech employees to demand more benefits.
Despite this, however, there are some benefits which tech workers are more likely to be vocal against reducing. This includes 401(k) matches, disability insurance, and healthcare perks such as fully covered egg freezing or deep prescription drug discounts. These hidden wages, as professor Daniel Keum of Columbia Business School calls them, are not reflected in salaries but make the lives of employees easier and less costly. Therefore, tech companies must be mindful of the fact that taking away or reducing these kind of benefits could lead to a mass exodus of talent.
To summarize, tech companies have been undergoing numerous changes following the economic slowdown. Many office perks have already been eliminated and further trimming of benefits is inevitable. Companies should keep in mind, however, that some benefits are more sacred to employees than others, and cutting too much could risk driving away current or future employees.
One such company is Meta, which is owned by Facebook. Meta is the pioneer of augmented reality (AR) and Virtual reality (VR) glasses, and plan to disrupt the way we interact with the world through technology. They are pushing the limits of AR and VR to create an immersive digital experience and enhance gaming, working, and socializing.
The person mentioned in the article is Daniel Keum, who is the assistant professor at Columbia Business School. He is an expert on tech labor and labor markets more generally and has studied the topics of labor relations, career and job mobility and labor market stratification. He has also authored or co-authored more than ten publications related to labor studies, including papers that have looked at employment benefits and their impact on job satisfaction.
