No more “micro-kitchens.” No more free massages. Fewer staplers.
Some are calling it a perk-cession, but amid a wave of layoffs, many tech employees — who increasingly are working from home and are more concerned about their jobs than free smoothies or revved-up laptops — couldn’t care less.
Perks were once a factor in tilting the odds for Big Tech companies recruiting top talent, but the appeal of sumptuous free meals and gratis laundry service has slipped.
“Perks are valued, but fulfilling work, doing work with a positive impact on society and work-life balance are more important now,” said Kajetan von Armansperg, co-CEO of career-development platform Leapsome.
When one major tech company, which asked not to be identified, recently conducted a survey of employees about what’s important to them, flexibility and the ability to work remotely ranked far higher than perks.
In recent weeks, the search-engine giant has announced its intention to strip away free services such as “micro-kitchens” stocked with drinks and snacks, shutter cafeterias with lower foot traffic, trim spending on company-provided equipment such as personal laptops and even ration staplers. It’s part of an austerity program that includes more than 12,000 layoffs amid a decline in ad spending and an uncertain economy. Some news reports suggest a second wave of job cuts are imminent.
“We set a high bar for industry-leading perks, benefits and office amenities, and will continue that into the future. However, some programs need to evolve for how Google works today,” company executives said in a memo to staff.
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“There is a higher priority on cost savings,” said Tarek Alaruri, co-founder and chief operating officer at Fairmarkit, an automated sourcing platform that helps businesses handle the procurement of goods. “As Google joins businesses — both tech and nontech such as Goldman Sachs Group Inc. GS,
Companies’ tail spend — the 80% of spending that falls below the control of procurement-approved requests for proposals, or RFPs — exceeds $1.8 trillion globally. Automating tail-spend management can result in significant savings, Alaruri added.
Nearly half of companies are eyeing cutting benefits like adoption and fertility assistance, commuter benefits, health and fitness discounts and home-office stipends as they brace for a possible recession, according to recent data from Care.com, which surveyed 500 U.S.-based human-resources professionals.
Higher-than-average planned cuts are happening in the food and hospitality, retail and manufacturing and construction sectors, the report found.
“During the Great Resignation of 2021 and 2022, employers were desperately courting prospective employees and wooing existing ones, relying heavily on enhanced benefits to attract and retain workers,” Care.com said in its report. “But in 2023, faced with an economic slowdown and a return to at least a semi-traditional workplace, some have been tempted to revert to old practices.”
The cuts come as the pendulum swings from a hot employee-driven market where perks were plentiful to a fragile one in which employers prepare for a potential recession.