Silicon Valley is having a bit of a rough go lately.
Layoffs at some of the biggest tech companies — 10,000 at Amazon and 11,000 at Meta for starters — have hit the sector hard, and there’s an air of downsizing all around. This means that in addition to letting staff go, even all those perks that many startups and long-established companies alike have used to lure top tech talent — think offices with stocked fridges, gyms, and shuttle services — have been reined in.
A recent episode of Vox’s podcast Today, Explained dove into what’s happening in the tech world, speaking to Peter Kafka, a tech reporter at Recode.
Here are three highlights from the conversation:
On the current landscape as an “existential shift”
I think most people who are working in tech have only been there during boom times. The last real deflation in tech was all the way back in 2000, 2001. There’s almost no one working in tech now who was around for that. So if you’ve been working in tech, you’ve only known things going up and to the right. You got paid a lot. There were always companies who wanted to hire you away from the company you were at, so you got paid even more. You knew that you could leave Facebook or Google and go to a startup, and if that startup didn’t work, maybe it would get bought by Facebook or Google.
And all of that comes to a record-scratch stop this year.
On the lack of growth in the sector
Yes. There’s a bigger story that goes back a couple of decades. These tech companies, Google, Facebook, Amazon, and Apple all had crazy, crazy, crazy growth. They were selling tons of ads. They were selling tons of iPhones. They reflected a big change in the way the world used technology. They were at the front of that. They got rewarded for that.
But those companies aren’t growing at the same rate anymore. Many of them are pretty old now — or their main product is pretty old. The iPhone is 15 years old. Google’s main search ad business is 20 years old. YouTube is 15 years old, more or less.
On the “fable and myth” of Silicon Valley
Yeah. I don’t want to be pollyannaish about this because people are losing jobs. And people are going to have a harder time paying rent or mortgages or feeding their families. But it’s part real and part fable of Silicon Valley to have this creative destruction where old things get taken down. New, cool things get built in their place. It’s part of the fable and myth of Silicon Valley that has a great deal of truth to it as well.
And so there’s lots of folks saying, “All right, we’re going to go make something new. By the way, we made a bunch of money in the last couple of years, the last 10 years. We can afford to not be working at a Big Tech company for a while. Let’s go cast around for a new idea.”
