AWS re:Invent starts two weeks from now, an end-of-year showcase typically reserved for the dominant cloud provider’s biggest service announcements, technology sessions, and customer success stories.

This year’s event, however, comes amid global economic pain marked by soaring prices, months of tech layoffs, and a general belt-tightening among some enterprises that includes curtailing their cloud spending. And even AWS’ own growth, while still strong, has slowed.

But CEO Adam Selipsky suggested that the worst of times often are the best time when it comes to enterprises investing in new services or modernizing their IT approach. When a challenge or crisis hits, companies that are prepared and able to move fast will gain advantage, he told Protocol in a recent interview in Boston.

“So we see a lot of customers actually leaning into their cloud journeys during these uncertain economic times,” Selipsky said. “We saw it during the pandemic in early 2020, and we're seeing it again now, which is, the benefits of the cloud only magnify in times of uncertainty."

As AWS looks to further help enterprises operate more efficiently and solve their business problems, data will be a big focus at the 11th annual session of re:Invent starting Nov. 28 in Las Vegas, along with a deeper push into industry verticals.

“Succeeding with data in today's world really requires taking the end-to-end view of your data and not looking at point solutions along the journey,” Selipsky said. “A lot of people are drowning in their data and don't know how to use it to make decisions.”

The spotlight on data brings to bear Selipsky’s experience leading Tableau Software and being immersed in the world of data, analytics, and business intelligence there for more than four years before returning to AWS last year. The amount of data available to companies continues to explode, and it's both a huge opportunity and huge problem, Selipsky told Protocol.

“I'm able to bring back a real insider's view, if you will, about where that world is heading – data, analytics, databases, machine learning, and how all those things come together,” he said. “It's not about having a point solution for a database or an analytics service, it's really about understanding the flow of data from when it comes into your organization all the way through the other end, where people are collaborating and sharing, and making decisions based on that data.”

Over the last 16 years AWS has churned out new cloud services, which now number more than 200, and Selipsky is adept at communicating how that technology can translate into better business outcomes for customers, according to Gartner distinguished analyst Ed Anderson, who focuses on the cloud services market.

“Adam has certainly … brought a leadership perspective that is really all his own, in fact, probably described best as really humanizing the AWS experience, really talking about benefits to businesses and benefits to people,” Anderson said. “It's reflective of the time in the market and then the type of buyers AWS is approaching. What the C-suite is looking for is, ‘How do I take all these capabilities and translate them into business solutions or business value outcomes?’”

AWS’ cloud conversations with customers are increasingly happening with organizations’ highest-ranking executives, rather than lower-level tech leaders. It’s a dynamic that most surprised Selipsky upon his return to AWS, where, up until 2016, he was the equivalent of AWS’ chief operating officer, a direct report to predecessor Andy Jassy and one of two senior executives in place since the cloud platform’s launch.

The change is indicative of the depth and sophistication of organizations’ use of the cloud now in every facet of their businesses — running core enterprise IT applications, tapping new analytics, and deploying end-customer applications — and how fundamental it is to their success, according to Selipsky.

“The cloud and our relationship with these enterprises is now very much a C-suite agenda,” Selipsky said. “There was a time years ago where there were not that many enterprise CEOs who were well-versed in the cloud. And then you reached the stage where they knew they had to have a cloud strategy, and they were more asking their team, their CIOs, 'OK, do we have a cloud strategy?' Now it's actually something that they're, in many cases, steeped in and involved in, and driving personally.”

While the technology is sophisticated, deploying the technology is arguably the lesser challenge compared with, how do you mold and shape the organization to best take advantage of all the benefits that the cloud is providing.

The conversation with CEOs typically focuses on organizational transformation: how customers can put data at the center of their decision-making and use the cloud to innovate more quickly and drive speed into their organizations, Selipsky said.

“Those are cultural characteristics, not technology characteristics, and those have organizational implications about how they organize and what teams they need to have,” he said. “It turns out that while the technology is sophisticated, deploying the technology is arguably the lesser challenge compared with, how do you mold and shape the organization to best take advantage of all the benefits that the cloud is providing.”

‘Not done building’

AWS’ pioneering entrance into cloud computing in 2006 and rapid pace of innovation catapulted it ahead of its subsequent cloud competitors. Today, it has an industry-leading 34% share of the cloud infrastructure services market. Microsoft follows at 21% and Google Cloud at 11%, according to the most recent data from Synergy Research Group.

There’s no one-size-fits-all solution to what customers want, Selipsky said, and that's why AWS will continue to develop products and services at all levels of its stack and fill out existing services with new features.

“We're not done building yet, and I don't know when we ever will be,” he said. “And one of our focuses now is to make sure that we're really helping customers to connect and integrate between our different services.”

Customers continue to want basic AWS building blocks — or so-called “primitives” — to operate in the cloud, according to Selipsky.

Adam Selipsky speaking at GSMA's 2022 Mobile World Congress in Barcelona Photo: Joan Cros/NurPhoto via Getty Images

“We absolutely have customers who very much want to have their hands 'on the wheel,' if you will, and to be working with our services at the deepest layer, at the most primitive level — so EC2 for compute, S3 for storage, one or more of our database services — and they want to be interacting with those services directly,” he said. “It is interesting, and I will say somewhat surprising to me, how much basic capabilities, such as price performance of compute, are still absolutely vital to our customers.”

But AWS is also seeing more and more customers who want to interact with its cloud at a higher level of abstraction — more at the application layer or with broader solutions such as Amazon Connect, its customer contact center service, Amazon HealthLake, or IoT services to monitor industrial equipment for maintenance.

In August, Dilip Kumar, who was vice president of physical retail and technology at parent company Amazon, moved over to AWS as vice president of applications, reporting to Selipsky. While at Amazon, Kumar oversaw the development of technologies including Just Walk Out, which enables checkout-free stores, and Amazon One, a biometric identity and payment service used at Amazon stores. He also had a stint as technical adviser to Amazon founder and former CEO Jeff Bezos, which is also how Jassy rose through the Amazon ranks to become the first CEO of AWS.

“We have lots of capabilities we're building that are either for … horizontal use cases like [Amazon Connect] or industry verticals like automotive, health care, financial services,” Selipsky said. “We see more and more demand for those, so Dilip has come in to really coalesce a lot of teams' capabilities who will be focusing on those [areas]. You can expect to see us invest significantly in those areas and to come out with some really exciting innovations.”

Supporting hybrid environments

“Multicloud” might not be a term in its regular vocabulary, but Selispky said AWS is also committed to supporting customers in their hybrid infrastructure environments — which include other clouds as well as on-premises data centers — with a caveat as to where he says they’ll find the most success.

“In general, when we look across our worldwide customer base, we see time after time that the most innovation and the most efficient cost structure happens when customers choose one provider — when they're running predominantly on AWS,” Selipsky said. “[There are] a lot of benefits of scale for our customers, including the expertise that they develop on learning one stack and really getting expert, rather than dividing up their expertise and having to go back to basics on the next parallel stack.”

That said, Selipsky acknowledged many customers operate in a hybrid state, running their IT in different environments whether by choice or due to acquisitions and inherited technology.

“We understand and embrace the fact that it's a messy world in IT, and that many of our customers for years are going to have some of their resources on premises, some on AWS,” he said. “Some may have resources that run in other clouds. We want to make that entire hybrid environment as easy and as powerful for customers as possible, so we've actually invested and continue to invest very heavily in these hybrid capabilities.”

Those include visibility and management capabilities, according to Selipsky.

We understand and embrace the fact that it's a messy world in IT, and that many of our customers for years are going to have some of their resources on premises, some on AWS.

“The first thing that customers ask for is, ‘We want to be able to see and have visibility into and in some cases manage resources on AWS, on my own premises and in some cases on other clouds,’” he said. “So we've built capabilities, many of our management services, to see and in some cases control what's going on across those environments.”

Selipsky singled out Amazon EKS Anywhere as an example. It became generally available last September as a deployment option for Amazon Elastic Kubernetes Service, which allows customers to run Kubernetes on AWS without dealing with their own Kubernetes control plane or nodes.

“We also have Amazon EKS Distro, a distribution of Kubernetes that customers can take and run on their own premises and even use to boot up resources in another public cloud and have all that be done in a consistent fashion and be able to observe and manage across all those environments,” Selipsky said. “So we're very committed to providing hybrid capabilities — including running on premises, including running in other clouds — and making the world as easy and as cost-efficient as possible for customers.”

Customer cost-cutting

Cost-efficiency is front and center now for some AWS customers, thanks to the state of the economy. During Amazon’s earnings call last month, chief financial officer Brian Olsavsky acknowledged an uptick in AWS customers focused on controlling costs. Customers are looking to save money versus their committed spend, and AWS is proactively working to help them cost-optimize, “just as we've done throughout AWS’ history, especially in periods of economic uncertainty,” he said.

“There are some industries that have lower demand that's showing up in our volumes,” Olsavsky said, highlighting financial services, the mortgage industry, and the cryptocurrency market. “We're very strong in some of those industries, and that's part of it.”

AWS revenue slowed in the last quarter, growing 27% year-over-year to $20.5 billion, compared with 39% growth from the same quarter a year earlier.

“We're an $82-billion-a-year company last quarter … so we have, of course, every use case and customers in every situation that you could imagine,” Selipsky said. “Some customers are doing some belt-tightening. What we see a lot of is folks just being really focused on optimizing their resources, making sure that they're shutting down resources which they're not consuming. You do see some discretionary projects which are being not canceled, but pushed out.”

AWS continues to see a strong customer appetite for signing longer-term commitments, according to Selipsky, which was part of a big push under the last several years of Jassy’s tenure as CEO.

“Many of our larger customers want to make longer-term commitments, want to have a deeper relationship with us, want the economics that come with that commitment,” he said. “But every customer is welcome to purely 'pay by the drink' and to use our services completely on demand.”

AWS has been open to renegotiating long-term contracts for customers with multiyear commitments through AWS’ Enterprise Discount Program, or EDP, according to Simon Anderson, founder and CEO of Mission Cloud Services, a managed cloud services provider and AWS consulting partner. Anderson attributes that flexibility to Amazon’s “customer obsession” leadership principle. Under an EDP, customers commit to a predetermined amount of high-volume annual AWS spending in return for contractually outlined discounts.

“We have renegotiated those deals,” Anderson said. “Typically they involve, as you would expect, an extension of the term of the new deal beyond the term of the old deal. For example, if someone has one year to go on their EDP, if the customer is prepared to make a forward commitment for two years or three years from that point in time, then there's definitely room to accommodate the customer’s current situation from a financial perspective.”

Customers ultimately care most about the value they get from AWS, according to Selipsky.

“Those benefits have been dramatic for years, as evidenced by customers’ adoption of AWS and the fact that we're still growing at the rate we are given the size business that we are,” he said. “That adoption speaks louder than any other voice.”

Good morning! Meta announced that it cut 11,000 employees this week and as Protocol first reported, Salesforce is planning for a major round of layoffs as well. Winter has come for the tech industry. And this is just the beginning.

Is it too late now to say sorry?

Mark Zuckerberg and Jack Dorsey recently did something that is, unfortunately, rare in the tech industry: They admitted they were wrong.

After a particularly bruising round of layoffs at Twitter under new overlord Elon Musk, Dorsey acknowledged he was at fault for growing the company too quickly. And as Meta shed 11,000 workers, Zuckerberg used a similar talking point.

The acts of contrition will likely do little to assuage the concerns of the thousands of employees who are now jobless ahead of the holiday season. But Dorsey’s and Zuckerberg’s olive branches at least stand in contrast to some more brutal layoffs elsewhere in the industry.

• At Salesforce, for example, employees who were recently laid off were given two months’ severance, sources told Protocol, a sharp reduction from what the company previously provided and noticeably less generous than Meta’s 16 weeks.
• At Meta, workers were also given additional severance based on their tenure at the company. At Salesforce, employees who’d been there over a decade received the same package as those who had been there a year, the sources said.
• Salesforce did not respond to a request for comment.

It’s startling how fast tech has fallen. For many, particularly younger workers, it’s tough to remember a time when the industry was wounded this badly. Even during the Great Recession, companies like Intel used the down time as a key opportunity to expand.

• For the past decade, capital has flowed into the sector like the mighty Mississippi. It propped up thousands of startups, many with no viable path to profitability. And with seemingly uncapped growth potential, companies added thousands to their workforces to support ever loftier sales goals.
• Meanwhile, vendors like Salesforce and Facebook spent billions over the past two decades to gobble up companies, creating a new wave of business and consumer tech giants. And Amazon, Microsoft, and Google cemented their behemoth status as businesses rushed to adopt the cloud and consumers spent more of their lives on the internet.

It seemed nothing could stop the impenetrable tech industry. Winter would never come in Westeros.

• The pandemic briefly strengthened that mindset given the massive growth of IT vendors like Zoom and DocuSign, as well as the heightened demand for ecommerce and other digital services.
• But investors quickly became nervous about just how much money businesses were spending, as well as how quickly consumers were pivoting back to pre-pandemic behavior. And as sales propelled to historic new heights, it quickly became a question of when, not if, the boom would bust.
• Now, some of those acquisitions, like Salesforce’s $27 billion deal for Slack, are looking like major liabilities as profitability becomes paramount. Burned by huge cloud and software bills, companies are increasingly eager to cut costs. Amid historic inflation, consumers quickly pivoted in their spending habits. And as a result, vendors are shedding workers at an alarming pace.

Winter has arrived with a vengeance. While customers will certainly continue to spend money on IT services, where those dollars are deployed as well as how much those investments will grow remains an open question. That means the growth that many vendors thought would come is likely delayed by years — if not indefinitely.

• Meta and Twitter have their own challenges that could take a while to sort out. But for others in Big Tech, like Salesforce, the last few months of the year are often quite lucrative. It’s when many of the largest customers renew, which makes the timing of the layoffs all the more noteworthy.

The end is nowhere near for tech layoffs. In fact, some industry insiders expect them to resume with even greater gusto following the upcoming holiday season. Perhaps now all we can ask is for CEOs to follow in the footsteps of Zuckerberg and Dorsey and at least make an effort to show remorse. Then they’re free to jump on their personal jets and head to their private tropical estates to recoup before the next round.

A MESSAGE FROM THE FINANCIAL TECHNOLOGY ASSOCIATION​

Don’t miss out! Register today to hear some of the biggest players in fintech discuss the industry’s most pressing issues at the Financial Technology Association’s inaugural Fintech Summit: Shaping the Future of Finance. Produced in partnership with Protocol, all sessions of the event will be live-streamed on November 16th.

Learn more and reserve your spot here.

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Circle CEO Jeremy Allaire has found himself shocked twice in the past few months by rapid-fire change in his industry.

The luna-UST crash in May stupefied him in “how fast the death spiral happened and how violent of a value destruction it was.”

The collapse of FTX — which has filed for bankruptcy Friday after rocking an already-reeling crypto market — was just as shocking, he said. It also underscores a critical problem in crypto: the growing influence of offshore crypto companies that can operate with little transparency and accountability.

“The offshore situation is a huge issue,” Allaire told Protocol. “You can't see things when they're opaque. There's a reason why there are market structure and market conduct rules. There are reasons why those exist. And they should exist in crypto markets.”

In an interview with Protocol shortly before FTX announced its bankruptcy filing, Allaire talked about the pressing need for crypto regulation in the U.S., the risks posed by offshore crypto companies, and why he thinks the FTX collapse could serve as the spark that convinces policymakers and regulators it’s time to move faster.

This interview was edited for clarity and brevity.

You described the last crypto meltdown involving luna and UST as a fast and violent value destruction. How does this latest crash involving FTX compare?

I think it's very comparable. It's astounding and shocking and disappointing, obviously.

You also said that with the luna-UST crash, there were signs about what could happen, that you could see it coming. Is it the same thing with the FTX collapse?

Not clearly; it was a lot harder to see. There are several really key takeaways. One is the problem with offshore operators. This is the reason why policymakers in the United States should be focused on putting a clear regulatory framework in place that builds safe markets in the United States and doesn't have people moving into opaque jurisdictions.

You have weak regulators or nonexistent regulators in certain cases. When you don't have enterprise risk management, clear public audits, clear separations of roles and responsibilities, when you don't have the rigor of being a regulated financial institution, all of the moral hazards that exist in financial institutions can go wrong.

It's one of the reasons why we have always been regulated in the United States. It's one of the reasons why we are in the process of going through becoming a public company. It's one of the reasons why we invite significant scrutiny on what we do.

I think the offshore situation is a huge issue. You can't see things when they're opaque. There's a reason why there are market structure and market conduct rules — the separation of banking and capital markets, the separation of proprietary trading and exchanges. There are reasons why those exist. And they should exist in crypto markets.

I think there's an opportunity immediately in front of us to address these. There's actual legislation that attempts to address these and probably should go further — like stablecoin issuance should not be something that exchanges do, just like banks shouldn't run capital markets.

You have [SEC] Chair [Gary] Gensler for quite some time talking about conflicts of interests that might exist between different roles in the market, within firms. He's been very public about that as a real issue and a risk.

People talk about CeFi [centralized finance]. CeFi without regulatory frameworks around it is banking and markets with all the moral hazards without regulation. That's essentially what you're talking about.

In many ways, one of the big takeaways here is that CeFi is higher-risk than DeFi because CeFi is opaque and most of it is offshore and unregulated. It's dominated by a completely unregulated company. No one even knows what jurisdiction they operate from.

CeFi is opaque. DeFi is actually public and transparent. All the rules, all the liquidations, all the risks, everything, it's all publicly visible.

The whole promise of this whole problem space, if you recall, came out of a reaction to the global financial crisis. We had these opaque financial institutions that had all of this risk that no one could see [or knew] existed. That led to overleverage.

The promise of blockchains was [they were] public, open, transparent, auditable. You could construct a safer and ultimately more open and more inclusive financial system on this technology. Ironically, some of the biggest businesses that have been built depend on opacity and, frankly, have all the moral hazards that have existed in traditional financial institutions.

If we move forward in a world where more and more activity is on-chain, where more and more activity is conducted on public ledgers, where you can have verifiability, you could have proof of reserves, you can have publicly disclosed risk management — you can even build models where you can have privacy but also enable auditors and regulators to have visibility as needed — so many things that can be done that actually can construct financial services that are safer.

I think that's going to be ultimately the biggest lesson that comes out of this. We need policy. We need regulation. We need intermediaries to follow the clear frameworks that are needed to address the different types of risks that exist. We need that. We need that fast.

How has the FTX crash changed your relationship with and your view of other key players in crypto that are based offshore, like FTX and Binance?

I think it's critical that major jurisdictions have a consistent and clear set of regulations around crypto assets, crypto markets, stablecoins, and these key pieces. You have that being put in place in Europe. You have that being put in place in Singapore. You have real proposals in the U.K. You've got bills in Congress in the United States. It's really key that we have that. And for these offshore players, they need to operate by the same standards, by these higher standards.

Crypto needs to be held to a higher standard. We believe that very firmly. We try to hold ourselves to very high standards ourselves. We think that if we do not hold crypto to a higher standard, we are going to continue to have these disasters for people and businesses and others.

We ran a big conference, Converge, a month or so ago. It was great. We had 2,600 people, tons of companies. The exciting thing was they were there not because of bitcoin, not because of speculating on crypto assets. They were there because they were focused on how to build real world-utility around dollar[-based] digital currencies. What becomes possible with this infrastructure?

The whole message was we have to move from the speculative value phase to the utility value phase of this industry. I think the speculative value phase has had people focused on what's the price of bitcoin? How big are these exchanges? And the incentive systems that come along with that, especially offshore unregulated variants of it, created I think these really, really high-risk environments for people.

The utility value phase’s focus isn't going to be on these trading markets and the price of bitcoin. It’s going to be focused on what people are building that is delivering utility to people and households and firms around the world.

I hope that more of the focus turns towards enabling that, and I think policymaking and regulation is actually a huge part of what helps foster that transition.

You tweeted the point about your concern with offshore players, as part of a thread that involved Coinbase CEO Brian Armstrong and Ripple CEO Brad Garlinghouse. Is there a coming together on this point when it comes to dealing with regulators?

This has been a consistent theme from major industry leaders in the United States for a long time. The lack of tailored, specific statutes and rules for the digital asset ecosystem in the United States has led to huge amounts of uncertainty, regulation by enforcement, not having clarity, and people feeling like they have to do things outside the United States.

We have chosen the hard path of doing things in the United States with regulation, doing it the right way. Frankly, I think that's paying off for us. We're thriving as a company right now. We've built a very, very significant and important business. I think we're proof that you can hold yourself to a higher standard and grow and thrive as well.

Were there practices that FTX and other offshore crypto companies have embraced that you felt were problematic? You were critical of Binance’s decision to convert USDC to BUSD. There are a lot of interconnections between U.S.-based crypto companies and those based overseas. Has what happened with FTX giving you pause when it comes to dealing with other similar companies in the industry?

It's a good question. I think everyone in this industry needs to be focused on greater transparency, being accountable to standards of supervision and risk management and compliance that are expected from global scale financial institutions. If you're a global-scale financial institution, you should be held to extremely high standards of supervision of audit of compliance of risk management.

We read stories recently about billions of dollars of sanctioned money flowing through various venues. How can that happen? We don't know all the details of what happened yet with FTX, although we're reading more and more. There's a lot of speculation.

But we [at Circle] have a vice president of internal audit who reports to our board of directors. We have enterprise risk management that is documenting every dimension of risk in our company and holding everyone to those standards and working with external auditors on everything from cybersecurity to financial crime risk.

There's just so much that goes into building a significant financial institution. I just don't know if any of those things exist in any of these offshore companies. I just don't know.

The people said to be directly affected are outside the U.S., since FTX and Binance are not allowed to operate in the U.S. — even though they have affiliated companies in the country. U.S. regulators could argue that the restrictions, even though they’ve been described as vague and inconsistent, protected U.S. investors and consumers.

These are deeply connected markets. The impact of these operators has been trillions of dollars of losses. How many people and businesses and institutions in the United States are harmed? A huge number in all of these cases.

Even though the exchanges are operating offshore ...

When the reckless behavior of an offshore exchange causes giant liquidations that cascade through the market and causes people in the United States to lose huge amounts of value, that's harming people in the United States whether they're using that product or not. They're globally integrated markets.

There has to be unified approaches to this around the world. These are common markets. They're deeply interconnected.

People like Gary Gensler and CFPB Director Rohit Chopra say they are doing something based on existing law.

There has to be new law. Digital tokens need to be classified and defined. Digital assets are a new class of financial instrument. There are currencies that are digital monies like USDC. There are things that clearly would be deemed to be securities. There are things that are somewhere between a commodity and a security. There are things that go through the lifecycle as they evolve.

I think forward-looking jurisdictions are starting to define a token taxonomy and define these and then align those with the appropriate supervisors. But write new rules. If you want to register a token, how do you do that? What are the disclosures? It's not an equity in a company, but you probably need disclosures. There's very much the need for tailored policy here.

The technology enables a lot of new things. This is a space where you’ve got to write new rules. This is, in my view, a failure of Congress. This is a failure of Congress because at the end of the day, we need new rules. Congress has to step up.

This crisis has been described as a setback for lobbying that would lead many politicians and policymakers to pull back.

I don't agree with that. In fact, if you look at what's being said today by House leaders, by members and some of the staff, they're leaning in hard. I think it's going to be the opposite. I think it's going to create higher conviction.

Now, you can take a cynical view and say, “Well, people were only paying attention because there was money being given to campaigns.” I don't buy that. The White House press secretary today made a statement that we need to regulate the crypto industry. It's now a White House press secretary issue, which says something. I think you're going to see a lot of work. You're probably going to see a lot more hearings. I think you're going to see real motion, not a pullback.

If a return to hustle culture is bubbling up from this week’s bloodbath of layoffs, Esther Crawford may be that movement’s poster child. A photo of Crawford — a director of product management at Twitter — sleeping on the floor of the office went viral on Twitter last week as Elon Musk prepared to lay off half the company. Evan Jones, a product manager who reports to Crawford, captioned it “when you need something from your boss at Elon Twitter.”

The photo sparked a debate around just how devoted you should be to your job, with some replies labeling office all-nighters as would-be “labor violations” and fodder for “trauma bonding” while others commended Crawford for her dedication.

Large tech companies have been on a hiring spree for years. Compared with startups, Big Tech has long offered employees a better work-life balance and — thanks to the talent shortage — less aggressive performance management, leading to the “rest and vest” stereotype immortalized in “Silicon Valley”’s portrayal of Big Head drinking Double Gulps on the roof at Hooli. But with seemingly endless growth no longer in the cards, that may be about to change.

The brutal layoffs at Twitter, Meta, and Salesforce, following other large cuts at Stripe and Lyft, could mean Big Tech jobs are about to get a whole lot less cushy. Already, Salesforce has updated its policies to make it easier to fire people, and Musk has told employees that remote work is no longer allowed at Twitter.

Crawford sleeping at the office seemed to exemplify this shift, and among those who expressed support were similarly minded tech leaders. Former GitHub CEO Nat Friedman was one such founder who cheered Crawford on.

“This is how great new things are built, more often than anyone has been willing to say during the last decade’s cultural revolution in Silicon Valley,” Friedman tweeted on Saturday.

Not all founders think this way. Miguel de Icaza, who co-founded developer tool maker Xamarin with Friedman, disagreed with that assessment, tweeting that he had left Xamarin at 5 p.m. each day to prioritize a “healthy work/life balance.”

“I think that asking people to work extra hours just [gives] you low quality output,” he wrote. “And in the context of these layoffs is crass.”

And Crawford herself addressed the furor over the viral tweet.

“Doing hard things requires sacrifice (time, energy, etc.),” Crawford tweeted. “We are less than one week into a massive business and cultural transition. People are giving it their all across all functions: product, design, eng, legal, finance, marketing, etc.”

The tight labor market put more power in the hands of workers, which — at least in Big Tech — has led to a shift away from hustle culture and toward work-life balance and self-care. Nolan Church, the co-founder and CEO of the people-leader talent marketplace Continuum, said hard work had become “demonized” over the last decade.

“It hasn’t been trendy to talk about hard work,” he said. “People call it hustle porn. It has been bad-mouthed for the last five, 10 years.”

Tech perks on TikTok

Celebrating Big Tech employment for the perks, not the hustle, has become a trend among some tech workers on TikTok and YouTube.

“Day in the life” TikTok videos earnestly highlighting companies’ iced matcha and office rooftop views have led some to post sneering comments about Big Tech’s lavish perks and overstaffing, dismissing project and product manager roles as “largely fabricated, redundant jobs” and calling on tech companies to fire “70% of non engineers.” The criticism is similar to that lobbed at the two product managers who described their jobs in a TikTok shot in a pool while on a work trip earlier this year.

In early August, the Twitter account @VCBrags (which uses the screen name “VCs Congratulating Themselves”) roasted “TikTok tech influencers” with a starter pack meme highlighting supposed traits like “earning six figures with no experience” at jobs that “[consist] of sending emails.”

Two weeks later, Craft Ventures general partner (now a “helpful at the margins” unofficial Twitter adviser) David Sacks criticized a “day in the life” video, tweeting “Does anyone still work?”

These videos clearly struck a nerve on social media: Tech workers celebrating their companies’ perks — mostly the free food — with little footage of them at their desks became scapegoats for their employers’ cratering stock performance.

But to Big Tech content creators themselves, there are obvious reasons for the videos’ focus on perks, rather than work: engagement and company privacy.

“If I created a real video of a day in the life of a product manager at a tech company, my video would be filled with me in a meeting room almost all day,” said Diego Granados, a senior PM at LinkedIn whose “day in the life” video has been played on YouTube over 42,000 times. “If you try to make it entertaining, then we need to show the fun parts that have nothing to do with proprietary information.”

Despite all the layoffs, Granados said he’s not noticing a drastic shift toward a more cutthroat work culture. He objected to the idea that Big Tech is overstaffed, and said that LinkedIn’s “great” work-life balance doesn’t mean he never works weekends to ship a new feature. LinkedIn’s parent company, Microsoft, cut fewer than 1,000 jobs last month, according to Axios, following an August restructuring at LinkedIn that reportedly affected its global events marketing team.

Albert Yang, a software engineering manager at Amazon Web Services who has made three “day in the life” videos this year (including a “realistic” remote work version), also said his company — now in a hiring freeze — is not overstaffed. If anything, AWS could use more head count, he said.

In Yang’s experience, Big Tech software engineers do about five hours of heads-down work per day, plus around two hours of meetings.

“A very focused five hours a day is pretty productive,” Yang said. “Obviously, there are days that will require you to work more.”

And Yang is feeling some pressure to work harder, both from all the layoff news and from his own desire to further his career. “This layoff situation definitely puts just a little bit more pressure on top of that,” he said, “but as long as I’m doing my job and performing well, exceeding expectations, I think I’ll be OK.”

‘Hiring people willy-nilly’

When Apoorva Govind joined Uber as a software engineer in 2017, she found herself on a team that, in her view, had no real purpose.

“Within one month, I was, like, ‘Oh, fuck. I need to get out of this team ASAP,’” said Govind. “I’m adding zero value and I know long term — six months, eight months, whenever they’re trying to do some kind of restructure — you know who’s going to get the axe.”

She changed teams within four months.

For Govind, who left Uber and founded a startup last year, the initial team she worked on formed because of a permissive culture around hiring, and motivation for managers to grow their teams as much as possible in order to boost their own careers and climb the corporate ladder.

“In most big companies, for the mid-level managers, they incentivize the number of people they manage,” Govind said. “That, in the end, leads into the situation that we’re in right now, which is hiring people willy-nilly, and now the people who suffer in the end are the workers.”

Climbing the corporate ladder is “easy” when you can justify it with, “My org is 60 people and now I’m ready for director,’” Church said.

“And employment/legal is not going to let you fire someone,” he added. “What’s been happening is that the underperformers on those teams end up transferring within the company, and then that manager gets completely abdicated from any responsibility.”

Church said this was a “dirty secret” at Google, where he worked as a recruiter until 2015, to be careful about taking an internal transfer who might just be a problem another manager is trying to get rid of.

When Big Tech overhires, it leads to more pointless meetings and busy work, said Flo Crivello, who spent 4.5 years at Uber before founding the remote office startup Teamflow.

“When you hire 10 people to do the job of one, it’s not like they’re going to work Monday and then go home the rest of the week,” Crivello said. “What that’s going to mean is a lot of useless work and lots of useless meetings and lots of useless conversations. Basically, the whole incentive is rotten from top to bottom.”

Tech companies didn’t just massively grow their head counts in the last couple of years. During the pandemic, many companies across sectors were so “panic-stricken” about the talent shortage that they held on to underperforming employees, PwC partner Julia Lamm said on a call with reporters last week. Now, four out of five HR chiefs say they’re reducing head count.

Talent shortage aside, performance management tends to be more lax at larger companies. As companies get bigger, they become less incentivized to weed out low performers: The risk of wrongful termination litigation increases, and managers are rewarded for growing larger teams, not culling them.

Govind recalled one former big-company colleague who didn’t write any code for two or three months, she said. But rather than being fired, he found a higher-paying job for a competitor.

Another colleague would flat-out ignore alerts that a system had gone down when he was working on-call. Govind said she complained about him repeatedly because his irresponsibility was causing trouble for others on the team, but he wasn’t let go until more than a year later.

“There’s this whole thing where people say ‘It’s so easy to fire people in the U.S.,’” Govind said. “Ask any manager in tech: They will tell you it takes them at least six months to one year before they can actually fire the low-performing people.”

Is this the end?

Silicon Valley will likely see a culture shift after all the carnage at Twitter, Meta, and elsewhere, but it won’t be a long-term switch, according to Church and Crivello.

Although the pendulum has swung back toward employers, it hasn’t swung that far, Church said.

“I actually think it’s still going to be on the employee's side for the foreseeable future,” Church said. “But I do think it has swung back slightly, in the sense that now, CEOs can be a little bit more realistic with how businesses are run. They need to drive profits, and money is no longer free, and sometimes we need to work on weekends.”

Crivello predicted that engineers’ lives would become 20% more intense for a year or so before going back to normal. It’s “just economics,” he said.

“Historically, there has been infinite demand for engineers and very little supply,” Crivello said. “These companies have very little leverage.”