Tech Industry’s Shift: Performance Pressure and the ‘Do More With Less’ Mentality
The tech industry is undergoing a significant transformation. From the giants of Silicon Valley to emerging startups, companies are aggressively pursuing a strategy of “do more with less.” Economic pressures in conjunction with altered pandemic-era realities and shifting political landscapes have driven this new approach, with leaders openly embracing a hard-driving, efficiency-focused culture. This shift marks a stark contrast to the perks-laden environment of the recent past.
Initial Shifts Observed
For years, Shopify CEO Tobi Lütke cultivated a reputation for building the $125 billion e-commerce company without adhering to the grueling hours often associated with startup culture. Before the pandemic, he wrote on X: “My job is incredible, but it’s also just a job. Family and personal health rank higher in my priority list… The only times I worked more than 40 hours in a week was when I had the burning desire to do so.”
However, even Lütke’s approach seems to have evolved. In a more recent exchange on X, Lütke responded to a user questioning work-life balance by saying, “I’m at home for dinner but I work at least 10 or so hours a day and a lot of the weekend… I don’t want people to get misguided by this meme.”
Performance Pressures Increase
Across the tech landscape, the balance has shifted, with the emphasis on “efficiency” and “intensity” replacing the previous culture of perks and employee pampering. Widespread layoffs have become commonplace in an industry once noted for job security. The push to dominate in AI has created intense competition, leading companies to seek greater output with fewer employees. Already demanding workplaces have become even more rigorous.
Leadership’s Role in the Transformation
Since the end of the pandemic boom in 2022, the tone from executives has noticeably changed. Companies are not only making these changes but are also actively highlighting them. Elon Musk’s aggressive cost-cutting measures are now being adopted within Silicon Valley in the name of greater efficiency.
At Twitter, Musk implemented an 80% workforce reduction, eliminating over 6,000 jobs. Yet, the company did not collapse, as some had predicted. Similarly, Meta announced it would cut 4,000 low-performing employees, with CEO Mark Zuckerberg stating that the corporate world had lost its “masculine energy.” Amazon has mandated a return-to-office policy, requiring employees to be in the office every weekday, a rule some employees find stricter than pre-pandemic expectations.
Other Companies Follow Suit
Other major tech companies have also increased the pressure on employees.
- Microsoft, known for its relaxed culture, cut 2,000 employees and overhauled its review process to quickly eliminate underperformers.
- Google, once lauded for its employee perks, initiated an “efficiency drive.” Co-founder Sergey Brin is reportedly encouraging employees working on Gemini AI models to work 60 hours a week and be in the office every weekday.
This enhanced rigor is being rewarded by investors, as the stock prices of Meta, Amazon, Microsoft, and Alphabet have increased significantly since 2022.
Startups Embrace Leaner Strategies
Startups are also feeling the impact of the pressures exerted by Big Tech. Krish Ramadurai, a partner at AIX Ventures, has observed a “pronounced shift” toward leaner teams and stricter performance standards at startups.
Employee Experience Evolves
The combination of performance-based cuts, return-to-office mandates, and the reduction of workplace perks makes it clear that the tech industry is moving away from its employee-focused past. Employees interviewed by Business Insider from major tech companies like Microsoft, Google, Amazon, and Meta, as well as a variety of tech startups, shed light on the changes.
Several employees spoke under the condition of anonymity, citing their lack of authorization to speak to the press. Their identities, however, are known to Business Insider. Meta, Microsoft, Google, and Amazon did not provide comment. Shopify also did not respond to requests for comment.
From Comfortable to Demanding
During the period of keen competition for tech talent, companies offered employees attractive salaries and lavish perks. By 2022, tech companies appeared willing to spend liberally to attract and retain their workforce. Amazon, for example, more than doubled its maximum base salary early that year. Microsoft implemented company-wide raises to discourage employees from seeking opportunities elsewhere. However, the end of the pandemic boom led to a decline in tech stocks and rising interest rates in 2022. This generated an industry-wide push toward greater efficiency as investors demanded profitability.
Additional factors included Elon Musk’s handling of the Twitter acquisition, where he cut thousands of employees, eliminated perks, and demanded a commitment to a new vision. At the time, the move was so drastic some people questioned whether the company could survive. Brad Porter, the founder and CEO of Cobot, said, “People paid attention because the prevailing wisdom was you couldn’t take out that much of an engineering organization and put that much instability on it and not have it fall over… He pushed right to the edge of it actually falling over, but it didn’t fall over.”
The Push for “Do More with Less”
By the end of 2022 and early 2023, tech giants had undertaken unprecedented rounds of layoffs. Meta, Amazon, Google, and Microsoft collectively eliminated over 60,000 jobs during this period.
Layoffs have continued across the industry. Some Google employees have begun crowdsourcing information about layoffs in an internal Google Doc. Employees reported pressure across the industry to “do more with less.” One long-serving Amazon employee said, “There’s lots of uncertainty, and lots of pressure to perform the jobs of multiple people at the mercy of ruthless middle management.”
Tech companies are also reducing middle management layers. Amazon announced a plan in September to increase the ratio of individual contributors to managers by 15% by the end of the month. CEO Sundar Pichai informed his staff that Google had reduced vice president and manager roles by 10% as part of its efficiency drive. Microsoft is tracking manager-to-employee ratios.
Increasing Performance Demands
Amid the layoffs, employees across the industry report mounting performance expectations. Meta announced it would eliminate approximately 5% of its workforce to “raise the bar on performance management.”
“There is more pressure for individuals to be better in their roles, and there is much more aggressive performance management happening these days,” one longtime Google manager said. Another longtime Google employee said, “We’re being asked to do more for less.”
The same Google employee noted the increasing trend toward more efficient, demanding workplaces in Silicon Valley, asserting that the present political climate “gives them the green light to do it openly.” Google has been working to become more efficient since Ruth Porat joined the company as CFO from Morgan Stanley in 2015.
Microsoft’s shift further demonstrates the change’s depth. One longtime Microsoft senior-level employee noted that peer tech firms like Google, Meta, and Amazon have contributed to stricter performance expectations. At TikTok, the pressure to perform, and the expectation that low scores should be distributed, increased. One staffer deemed the goals “unattainable.”
The company has heightened RTO requirements for some teams. In February, US e-commerce workers were told they needed to be in the office five days a week for eight hours a day. Several current and former workers said that burnout had become common, with some taking mental health leave. A former staffer said, “You feel like if you’re not hitting a target, even if it’s a moving target, you’re in trouble… it was just feeling like a failure, like I couldn’t do anything right.”
Intensified Startup Culture
The pivot to performance has influenced startups as well.
Early startup employees are expected to work long hours during the critical “valley of death” phase, though free money tested the tradition of frugality. Investors invested significant amounts of money into small startups when interest rates were low. The blitz of that funding led to a race for perks to attract talent. Some examples include employees working from home and setting their own schedules; wellness stipends and extravagant off-sites. Bolt gave many employees Fridays off.
Now, executives are resetting expectations by cutting salaries, reducing remote work, and decreasing headcount. As Mang-Git Ng, the founder of Anvil said, “I think many individuals — founders included — lost sight of the true goal of a company. It is to make money…” Similarly, Jesse Zhang, the founder of Decagon said, “There’s no such thing as a rocketship that doesn’t have a certain level of intensity to fuel its trajectory…
The ‘Big Tech’ Trickle-Down
Natan Fisher, who runs a recruiting firm, said, “Founders aren’t sugarcoating it. I’ve had a few cofounders tell employees they aren’t working hard enough, and, ‘If you’re not all in, no hard feelings, we can give severance, but we can’t slow down.’ Late nights, weekends, even people crashing at the office, it’s real.”
