Following mass layoffs in 2022 and 2023, many tech workers turned against their employers. When liberal politicians also rallied against Silicon Valley, their backers turned to Donald Trump.
Tech giants went on an unprecedented hiring spree, scrambling to meet new demand and cement their dominance. Where tech workers already had tremendous labor market power in the preceding decade, the postpandemic boom for technology tilted the balance even more sharply in favor of workers. Demand for technical skills exploded, and tech companies scrambled to recruit engineers, designers, and data scientists, often without fully knowing what to do with them.
Between 2019 and 2022, Amazon and Facebook more than doubled their head count, growing by 92 percent and 93 percent, respectively. Microsoft added nearly 80,000 new employees, while Google brought on over 60,000. With so many workers joining the industry, many were onboarded to teams with no immediate tasks, held in reserve for future projects that hadn't yet been planned - they were, in other words, hired with nothing to do.
Tech's pandemic-era hiring boom was underwritten by an extraordinary financial backdrop shaped by over a decade of loose monetary policy. In the wake of the 2008 financial crisis, the Federal Reserve slashed interest rates to near zero to stimulate the economy. And for most of the 2010s, rates remained near zero, creating what economists call an era of zero interest rate policy, or ZIRP.
With money easy to borrow and venture funds flush with cheap capital, tech firms expanded aggressively, and office workers reaped the rewards: skyrocketing salaries, unprecedented job mobility, and the leverage to demand more from their employers. The result was a golden age for tech workers. Many could choose which projects to join, pursue skill development on the clock, or even negotiate permanent remote work arrangements. In this environment, tech workers were prized assets, courted and catered to in ways rarely seen in other industries.
Then inflation hit as an unprecedented flood of pandemic-era stimulus cash went into the hands of consumers, and the Fed responded with one of the most aggressive tightening campaigns in decades. Rates were raised from near zero to roughly 5.5 percent, with the bank making 10 consecutive hikes in just 15 months. As intended, the economy turned cold. The S&P 500 fell 19.4 percent, the largest drop since 2008. Sectors across the board felt the slowdown. Real estate activity plummeted as higher mortgage rates discouraged potential homebuyers. Top retail and entertainment firms, from Walt Disney to Nike to Home Depot, were similarly hit as consumer spending drew back.
But more than any other sector, the tech industry, which had soared to unprecedented heights during the pandemic, fell the hardest. Having experienced outsize gains during the easy-money boom years, tech's rapid ascent was followed by an equally dramatic crash.
Major tech firms began missing Wall Street's expectations. Amazon reported sluggish growth and razor-thin margins. Google saw four consecutive quarterly declines in profit, hit hard by a slowdown in digital ad spending. Microsoft also faced headwinds, with its cloud business, its key growth driver, showing signs of deceleration. The exuberance that had fueled the postpandemic rally evaporated, and the air came rushing out of the sector's inflated valuations. Almost $4 trillion in combined market value vanished from Amazon, Facebook, Apple , Google , and Microsoft . Facebook lost two-thirds of its value. Amazon lost half. And nearly $1 trillion was shaved off Microsoft's valuation. At year's end, the industry fell 30 percent, making 2022 the third-worst year in the industry's history, after the 2008 financial crisis and the bursting of the dot-com bubble in 2000.
Almost in lockstep with the Fed's unprecedented interest rate hikes, tech companies, long buoyed by an unshakable belief in inevitable growth, implemented a series of mass layoffs and budget cuts. The industry that had once prided itself on generous perks, sprawling campuses, and nonstop hiring began to speak a new language of financial restraint. For the first time in years, the tech industry, rather than pitching itself as the frontier of unstoppable growth and expansion, presented a different vision of its future: austerity.
So why was tech hit so hard? An industry built on cheap capital suddenly found itself exposed to a level of risk that made the dominant business model no longer tolerable. In a high-interest-rate environment, the opportunity cost of risky bets increases dramatically because cash can accrue real value in safer assets. As a result, investors became more cautious, demanding safer returns and more predictable outcomes instead of long-shot promises of future monopolies.
For tech firms, this new financial environment meant that executives could no longer justify burning cash in the name of growth. Lavish spending on massive compensation packages, generous perks, and playground-like offices started to look less like visionary leadership and more like fiscal irresponsibility. The massive hiring spree of previous years was now recast as misguided bloat.
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But rather than acknowledge their own reckless expansion, CEOs and venture capitalists threw the blame on workers. Silicon Valley investor Keith Rabois, a prominent voice among tech elites, declared that thousands of employees at companies like Facebook and Google were doing "fake work." He complained that new employees, referring to those brought in during the pandemic hiring spree, simply had to "sit at their desks and do nothing." David Ulevitch, a general partner at the prestigious venture capital firm Andreessen Horowitz, similarly suggested that as much as half of Google's white-collar workforce wasn't contributing meaningful labor. He blamed the rise of "bullshit jobs" across big tech firms, suggesting that many roles existed primarily to fill a head count, not deliver results.
Tech CEOs also piled on. Google CEO Sundar Pichai announced at an all-hands meeting in 2022 that there were "real concerns that … productivity as a whole [was] not where it needs to be," adding that workers needed to "minimize distractions and raise the bar on both product excellence and productivity." Wayfair CEO Niraj Shah, in an infamous internal email to his employees, threatened workers for being lazy, saying that "there is not a lot of history of laziness being rewarded with success." Meanwhile, Mark Zuckerberg responded to claims of fake work by declaring 2023 the company's "year of efficiency." After losing billions in the capital market crash, tech's billionaire class needed somewhere to pin the blame.
This new rhetoric portrayed tech workers as undeservingly privileged while deflecting accountability away from the very decision-makers who inflated their own bubbles, all while laying the ideological groundwork for the sweeping structural changes that would soon follow - none more blunt or brutal than mass layoffs.
For asset-light tech firms, where capital isn't tied up in facilities or merchandise, labor is the largest cost and the easiest line item to cut. During the ZIRP years, keeping extra engineers on payroll was a small price to pay compared to the potential upside of a breakthrough they might help deliver. But in the high-interest-rate environment of 2022, every employee represented a financial trade-off, and firms had to weigh their cost against the guaranteed return of simply holding that cash in the bank. In this context, tech workers were no longer assumed to be future value creators by default; instead, they had to earn their place by delivering short-term returns. Unlike traditional workers, whose daily labor continually generates revenue for their employers, most tech workers are tasked with developing automated digital products - platforms, software, or other bits of code - that don't require daily labor to operate.
Reporting synthesized and verified under Nexvoro.tech editorial guidelines. Full primary records referenced via Wired.
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