Jenna Teterin, Stanford University
Every engineer wants to work at FAANG.
At least, that’s what every first-year computer science student hears upon arrival at universities across the nation. Almost immediately, the term FAANG evolves beyond its (admittedly slightly outdated) acronym for Meta (Facebook), Apple, Amazon, Netflix, and Alphabet (Google)—it becomes the all-encompassing term for the Big Tech companies that seemingly every engineer dreams of one day joining. Rumors of exorbitant pay and standing at the forefront of technological innovation excite those new to Python or C++, and for a lucky few, those rumors become reality.
However, this reality is not independent of the world in which it resides and while Benjamin Franklin claimed that the only inescapable things in this world are death and taxes, economic volatility is a close third. Inflation, interest rates, and the threat of a recession endanger even the Big Tech companies tech enthusiasts once deemed “too big to fail.”
While there’s no threat of Apple or Netflix “going under,” this immunity doesn’t extend to its employees. Within the last two years alone, Big Tech has let go over 104,000 employees, with FAANG companies at the forefront of this trend: Meta, Amazon, and Alphabet, making up three-fifths of this consortium, have each seen their layoffs reach the tens of thousands.
The numerical aspect of these layoffs is staggering in its own right, and the trend’s rapid and sudden onset certainly has not helped employee morale. As described by multiple Meta ex-employees affected by the large-scale job loss, over ten thousand product managers, recruiters, and even engineers could be let go over email with no warning.
It’s important to note that FAANG companies aren’t unique in their struggle. 2023 saw Vodafone lay off twenty thousand employees and Maersk let go of ten thousand, indicating that sectors such as telecommunications and shipping are just as susceptible to changes in the economy. However, these industries haven’t been idealized quite to the extent of Big Tech, and as more and more employees have lost their jobs, the illusion of FAANG immunity to hardship has faded.
Still, it is in times of economic hardship that silver linings are most cherished, and this recent wave of unemployment is no exception.
While FAANG has had talent knocking on their door, their Silicon Valley startup neighbors have experienced a talent shortage. This comes as no surprise, as established companies have historically provided compensation, stability, and benefits that their smaller, newly-formed counterparts are unable to match. For many students, especially those graduating with student loans and debt repayment plans that require immediate attention, startups, even if intriguing, inevitably lose out to the glitz and glamor of tech giants.
Now, as a case study of structural unemployment occurs in real time, those watching the tech industry are reminded that talent is not simply lost in a vacuum once the termination letter is received. Jaded from recent experiences in Big Tech, many software engineers have turned to smaller companies that provide them with the chance to see their work translate to a bigger impact. The startups that once struggled to find human capital have gained access to a new workforce—one that is willing to take a risk and attempt to reach the forefront of technological innovation from a smaller launching pad. This approach is not without its merits, as startups are crucial to the economy due to their outsized impact on economic growth. According to John Wu and Robert D. Atkinson of the Information Technology and Innovation Foundation, technology-based startups “contribute more to innovation, productivity, and competitiveness” than their non-tech counterparts. An influx of talent in startups, rather than Big Tech, might just be the push that leads to the discovery of the next century-defining technology.
However, it’s hard to see the bigger picture when sitting at a college dorm desk. It’s even harder to look beyond the headlines of hiring freezes and layoffs as a student hoping for an internship, or better yet, a job. For some, working at a company whose size pales in comparison to FAANG may be disappointing, even disheartening. But as we all know, economists focus on facts, not feelings. And the economists say it’s going to be okay.