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Silicon Valley companies cut back on employee perks

Yahoo Finance’s Daniel Howley joins the Live show to discuss how Silicon Valley is cutting back on employee perks as part of cost-cutting plans.

Wednesday, April 5, 2023

Silicon Valley is kissing some of its over-the-top perks goodbye

For years one of the defining benefits of scoring a job in Silicon Valley has been the over-the-top perks. From in-office laundry and dry cleaning services to free dinners and complimentary shuttles, tech companies courted employees with benefits unheard of in other industries.

But for tech firms looking for ways to reduce costs in the midst of slowing revenue growth, at least some of those coveted perks are gradually beginning to dry up. No, they’re not going away entirely, but at a time when tech giants like Meta (META), Alphabet (GOOG, GOOGL), Amazon (AMZN), and Microsoft (MSFT) are laying off thousands, don’t expect Silicon Valley to start upping the ante on perks again anytime soon.

“There's no doubt that so many of the large tech platforms in particular have moved from really what's been a long growth phase into what's a more conservative cost cutting phase,” explained Tony Guadagni, senior principal for Gartner’s human resources peer & practitioner research team.

“That doesn't mean, of course, they're not growth focused, they always will be. But the emphasis has shifted towards reducing overhead, towards reducing costs.”

Alphabet just the latest to trim benefits

The latest company set to cut back on its perks is Alphabet. According to CNBC, the Google parent is reducing access to exercise classes, high-end laptops for non-engineers, and even pulling back on the availability of staplers at printer stations across the company.

The search giant is also scaling back some of its cafe perks, limiting the number of days they’re open to line up with when more people are in the office than working from home.

“We’ll be looking at data to identify other areas of spending that aren’t as they should be, or don’t scale at our size,” Alphabet CFO Ruth Porat wrote in a note to employees obtained by CNBC.