Silicon Valley is no longer the same: why IT specialists no longer want to work in San Francisco

Working for modern technology companies is losing its appeal. The level of job satisfaction among IT workers in Silicon Valley and other technology hubs has decreased markedly. Why does this happen, says Ain.

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Aaron Terrazas, chief economist of the Glassdoor portal, conducts a study of the labor market in the United States. He wrote a column about why IT salaries are falling and work-life balance is almost on par with Wall Street companies, which are known for demanding schedules and stress.

For the first time in a long time, tech workers are desperate.

The innovation industry has been an exception when it comes to employee satisfaction. Of course, the business goals were ambitious and the deadlines were terrifying. But the aura of building the future attracted energetic, educated youth to technology—not to mention the high salaries, the opportunity to enrich themselves with stock options, a relaxed dress code, and glitzy offices with lunches and sports.

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All this made IT workers happier than workers in other industries. During the pandemic, more than 80% of tech workers would recommend their company to a friend, according to Glassdoor—more than in almost any other industry.

That all changed in 2023: Tech worker satisfaction levels plummeted, almost matching those of finance and consulting—industries that often compete for the same group of highly educated, in-demand talent. In anonymous online communities such as Glassdoor's Fishbowl, there is a growing sense of anxiety among IT workers. More and more laid-off and newly hired professionals are unable to find work, gradually lowering their expectations for pay and job satisfaction.

“I can’t believe how hard it is to get a job this year. Since June 1, I have applied for more than 600 positions, passed several interviews, but did not get any further. This is killing me,” writes a Data Analyst in the Glassdoor #JobsInTech group.

“I have been looking for a job for over a year now. Work experience in IT – 25 years. Sent out over 900 applications. Reduced my salary expectations by half. Should I just give up at this point and change my profession? – asks the project manager.

For more than a decade, low interest rates, robust consumer confidence and an increasingly educated workforce have created a business ecosystem that encourages bold bets on the future. Technology companies, with their vision of new ways to connect the world and “live life,” were uniquely positioned to take advantage of society's thirst for inclusive growth.

But to do this, Silicon Valley needed savvy people who could deliver on these promises. These types of professionals were attracted to tech companies by money or a better quality of life than the grueling, albeit lucrative, cohort of Wall Street companies. Over the past decade, a steady flow of cash from investors has made it easier to keep those promises.

But over the past two years, the Federal Reserve has gradually raised interest rates, increasing borrowing costs to finance risky ideas. Businesses across all sectors of the economy have revised rates on their balance sheets and cut back on projects that were unlikely to generate profits in the short term. In an industry like tech, where companies regularly make multibillion-dollar bets on new technologies that may not generate real profits for years, this is a disaster.

This is weighing heavily on the tech job market, which has slumped sharply in at least two major tech hubs: the Bay Area and Austin, Texas. The local unemployment rate has risen more than half a percentage point over the past year, a broad signal of an imminent recession. Unemployment claims from information sector workers have doubled since last year and, despite the pandemic, are now on par with their peak in 2013.

But this is not even the main reason for the dissatisfaction of IT workers.

From hoodies to ties

At the heart of the tech industry's current malaise is an aging corporate culture. Glassdoor's employee satisfaction data shows two big changes that occurred in the last few years leading up to the COVID-19 pandemic, but the latest one has only accelerated them.

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Firstly, the “managementization” of the IT sector. Over the past five years, the ratio of specialists to managers has worsened - there are now more managers for every technology specialist than before. In 2018 and 2019, there was an average of 6,6 subordinates per manager, but after the pandemic, this ratio dropped to 6.

This is in stark contrast to the historically horizontal hierarchy in IT companies that contributed to the technology boom of the 1990s. Of course, as technology companies have evolved into more complex organizations, more layers of management are needed. But the basic result is the same: the people who make the products are increasingly moving away from the people who make strategic decisions.

Secondly, the best jobs in IT are not necessarily technical ones. Workers at large tech companies who report high job satisfaction in Glassdoor reviews do not hold technical jobs. These are not engineers or scientists, but specialists in the field of human resources or marketing.

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The truth is that jobs in technology have become very similar to jobs in other parts of the economy: high pay is usually justified by more demanding schedules and overtime (and often “working weekends”). This evolution is not unusual—it is a well-trodden path for past generations of innovators, from Ford Motor Company in the 1920s to Intel in the 1990s. They eventually became known as boring corporate giants when their products ceased to be disruptive and became commonplace in the world. economy.

Is it possible to return everything?

Restoring the spark of innovation among employees will require leaders to recalibrate their organizational compass: flatten organizational structures, focus on long-term planning so employees have a sense of stability, and reprioritize investments in the core technical talent that drives critical product development.

To get the industry back on the path to innovation, companies need to listen to their employees again and empower them to do what they do best.

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