(Photo by FABRICE COFFRINI/AFP via Getty Images)
The United States is in the midst of fear, uncertainty and doom (FUD). Within the last week, Silicon Valley Bank, Silvergate Bank and Signature Bank all imploded. The failure of SVB sent shivers through the markets, causing concerns over which small or regional banks could collapse next. It’s likely that large layoffs will follow.
Recognizing that the stock market applauded his pivot toward fiscal austerity after the first round of Meta layoffs in November, CEO Mark Zuckerberg announced additional plans for job cuts and a hiring freeze on Tuesday. The news sent Meta shares jumping nearly 7.3% higher, closing at $192.04, the highest price in more than eight months.
Avoiding the same layoff fate as Meta, Apple is reportedly delaying bonuses for some employees, while also cutting down on the frequency in which they are paid out, according to Bloomberg.
Credit Suisse, a once-formidable global investment bank, saw its stock price plummet to around $2.00 a share with concerns over its viability after the Swiss bank’s biggest investor—the Saudi National Bank—announced it would not buy more shares, due to regulatory restrictions.
Let these be signs that you must hunker down and dispense with all the cute meme TikTok advice of quiet quitting, acting your wage and other admonishments telling workers to do the bare minimum. You’ll have to be seen, known and respected at work to hold onto your job. Take the initiative to career cushion and covertly search for a new job, in case everything falls apart at your current company.
Apple has been an exception to the carnage in the tech sector. While Amazon, Google, Microsoft, Meta, Salesforce and other tech companies excessively overhired during the last few years, Apple was cautious and hired at a rate that aligned with the company’s growth.
Now, the world’s most valuable company is adopting an even more austere program to wring out all the financial excess.
Employees in the operations, corporate retail and other divisions were paid out bonuses biannually—in April and October. However, the company is now walking back the two-time bonus payments. Under Apple’s new policy, staff will only receive an annual bonus, which will be paid out in October instead of next month.
The iPhone maker has reportedly decreased budgets and hiring goals for this year, while cutting back on travel.
In January, it was reported that Apple CEO Tim Cook would take a pay cut in 2023. According to a Securities and Exchange Commission filing, Cook’s annual compensation target for 2023 is $49 million, down from $84 million last year. This marks a more than 40% dock in pay for the chief executive.
In a companywide memo this week, Zuckerberg shared his corporate restructuring plans to strengthen Meta’s position as a tech company and its financial standing. The chief executive announced that he would cut another 10,000 jobs and freeze hiring on 5,000 open roles.
“This will be tough and there’s no way around that,” Zuckerberg said. “It will mean saying goodbye to talented and passionate colleagues who have been part of our success. They’ve dedicated themselves to our mission and I’m personally grateful for all their efforts. We will support people in the same ways we have before and treat everyone with the gratitude they deserve.”
The recruitment team will be impacted as the same pattern emerges at other companies. It stands to reason that talent acquisition won’t be needed, as there won’t be any hiring. Since Zuckerberg is on a cost-cutting crusade, he doesn’t have plans to retrofit recruiters into other roles within the organization.
Meta is expected to restructure and conduct layoffs within its tech division in late April, and its business team in late May.
Keith Rabois, a general partner at Founders Fund, known for his big wins in investing in PayPal, LinkedIn and Square at early-stage investment rounds, has called out the “fake work” culture at tech companies.
Rabois contends that many people at Meta, Google and other well-known tech companies were hired unnecessarily. The rate of over-hiring talent was not on pace with the growth rate, but rather a “vanity metric,” according to Rabois. Many of the hires were made because bosses wanted to build a fiefdom around them to feed their egos and brag about their importance. Rabois asserts that tech giants hoard talent to keep key people from leaving for a competitor or building a startup to compete with the former company. The venture capitalist’s theory is that workers implicitly understood and capitalized on the game. They knew they wouldn’t be fired and could coast throughout the day.
Similarly, Thomas Siebel, a tech billionaire with a net worth of $3.5 billion, according to Forbes, said it’s time for the “craziness” to be wrung out of the marketplace. Siebel accused the tech giants of hiring employees even though they didn’t have jobs fleshed out for them. He complained that remote workers slacked off while working from home.
Moody’s, a top rating agency, downgraded its outlook on the U.S. banking system after the collapses of Silicon Valley Bank, Signature Bank and the crypto-focused Silvergate Bank. Its assessment went from “stable” to “negative” and placed six regional banks, including First Republic and Western Alliance, under review for possible downgrades. Moody’s didn’t detect the problems at the banks until after the carnage. Similarly, there are questions over why the government regulators, outside auditor KPMG, internal risk managers and executive leadership missed all the signs.
Moody’s, after the horses are already out of the barn, points to the rapidly moving deterioration in the banking sector. The rating agency voiced concerns that several banks with unrealized losses—which was part of the downfall of SVB—and uninsured depositors with more than $250k in the bank could be at risk, even though the U.S. government made efforts to backstop and help out the sector.
To add to the FUD, Credit Suisse saw its shares plunge nearly 25% to a new record low on Wednesday, after its stock plummeted 75% over the last 52 weeks. In the bank’s annual report, Credit Suisse said it had material weaknesses in financial controls, and realized five straight quarters of losses. Its high-net-worth clientele withdrew around $100 billion from their Credit Suisse accounts. Just like what happened with the SVB, Silvergate and Signature Bank, there is a rising concern about other financial institutions.
You can’t control the economy, your company or the financial markets. However, in times of turmoil, you need to be hyper-vigilant and do whatever you need to do to ensure that your job is safe.
If this means returning to the office five days a week, make the change without complaining. Position yourself as the go-to person at the company that gets things done. Ingratiate yourself with your boss and key players at the firm. Put in the time and effort to stay employed.
Surreptitiously start searching for a new job to hedge your bets. As many companies are laying off workers and enacting hiring freezes, this may be a long and drawn-out process, but don’t give up.
Make a list of target companies that appear safe and sound. Then, find people you may know who can make a recommendation on your behalf. Seek out the help of a recruiter to maximize your chances of gaining new employment. Scour job boards, tap into your network, attend conferences and sector-specific events and be active on LinkedIn to get noticed.
(Photo by FABRICE COFFRINI/AFP via Getty Images)