- Tech companies will continue to cut benefits, and may begin cutting 401(k) matches and health care benefits.
- Many workers will not leave their jobs after losing the benefits that once defined the tech industry.
- But experts say that could change if workers’ financial incentives are cut.
Tech companies have long touted top office perks like on-site dry cleaning, ice cream bars, and paid egg freezing services to recruit and keep top talent happy.
Now all that is changing. The economic slowdown has led many companies to cut jobs and benefits, creating an identity crisis among some tech workers. The technology sector has cut nearly 200,000 jobs since the beginning of 2023, according to Layoffs.fi, a website that tracks the industry’s job cuts.
Meanwhile, Google has reduced hours for some on-site cafes and Twitter has cut free lunches. Meta employees said the company appears to be serving snacks and cereal in its cafeteria — after the Facebook owner already canceled its on-site laundry and elevator subsidy program. Big tech companies aren’t the only ones, either: tech startups and venture funds opted to cut back on lavish holiday parties last year.
In this new era of austerity, few benefits are safe from being cut — and some may never come back. Tech companies, in particular, are “preparing for a longer period of time to slow demand and capital investment, so they’re looking at long-term benefits,” Glassdoor chief economist Aaron Terrazas told Insider.
There is no end to cleansing for the benefit. As long as the tight labor market threatens a talent drain, companies will miss out on these benefits, experts say.
“The corporate floor seems pretty low right now,” said Daniel Keum, an assistant professor at Columbia Business School. “More benefits are going to be taken away, but people are not leaving for a number of reasons, including the downturn in the industry where many people are looking for work.”
But employers should note: some benefits are more sacred to employees than others.
While many tech workers can get by without free sushi bars or massages, they rebel against financial perks like 401(k) matches, disability insurance and health care benefits, including fully covered egg freezers or deep prescriptions. Discounts.
The most important benefits
The set of benefits that technology companies offer is vast. This includes the frivolous, like restaurant-table reservations, and the more financially meaningful, like generous employee discounts, travel expenses, and tuition fees.
Keim called the more influential benefits “invisible wages.” They are not directly reflected in the salary of the workers, but it will make their life easier and reduce the cost, he said.
The loss of these benefits is more likely to drive away current or future employees. In a May 2 survey of college seniors, recruiting-software provider, 42% of respondents said they expect employers to offer 401(k) matches, 34% companies should provide financial planning, and 28% said they want a student-loan repayment program.
“A lot of people end up coming to a practical position about what to give up and what options are available,” Terrazas said.
Even if such changes lay off workers, tech companies won’t rule out cuts to these financial benefits, experts said.
With the rise of artificial intelligence and offshoring, workers may have a harder time asking for more benefits. And new coding and engineering talent waiting in the pipeline is poised to keep the tech job market tight.
So if you work in tech, get ready to say goodbye to some of your favorite perks — maybe forever.
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