The Silicon Valley layoffs keep on coming. Meta, Twitter, Lyft, Salesforce, Microsoft, Stripe, Amazon. Some of the biggest names in tech and some of the biggest companies in the world are recognising they overhired and are cutting back.
At this stage this is a tech problem, rather than a broader economy problem. In October, American companies added net 261,000 workers. It appears that Silicon Valley assumed many of the pandemic-era digital gains – digital payments, work from home, eCommerce – would remain post-pandemic. It now seems these changes are not happening at the same pandemic-era pace. And as a result, tech companies are being forced to revise their projections.
This article takes a look at the last 20 years of Silicon Valley and the trends in big tech. From the quiet post-Dot Com Boom days to the re-emergence of tech in the late 2000’s with companies like YouTube, Skype and Facebook reaching billion dollar valuations. Then, in the 2010’s, the scope of tech’s ambition widened. Rather than focusing on ‘the world of bits’, tech founders looked at ‘the world of atoms’. They wanted to disrupt large, established industries like transport, healthcare and education.
In some cases this was successful (Uber, Airbnb etc.), in other cases it was not (WeWork is the best example of a traditional company masquerading as tech). And now we have reached the end of that story – where many of these ‘world of atom’ disruptors are now being told to focus on profitability. The days of easy money is behind them.
There is a certain finality to this article that doesn’t seem correct though. A similar article would’ve been written in 2001 or 2002. There is no way this is the end of the story. VC’s have plenty of dry powder, there is new technology emerging and a generation of engineers at Stripe, Facebook, Microsoft and the like have been freed from the comfortable prison of six-figure salaries and generous stock options with five year vesting. Many of these laid off tech workers will go on to found the next generation of technology companies. And we can’t wait to see what they build.
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