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Posted: 2022-07-18 21:40:00

Alphabet CEO Sundar Pichai sent a surprising memo to his staff this week: “Moving forward, we need to be more entrepreneurial, working with greater urgency, sharper focus, and more hunger than we’ve shown on sunnier days,” he wrote, according to tech news site The Verge.

Not only did his message underscore the increasingly challenging outlook for tech firms, it marked a shift to a tougher tone from the tech industry that is poised only to intensify in the weeks ahead. Meta chief executive officer Mark Zuckerberg’s own warning to employees last month was even darker: “Realistically, there are probably a bunch of people at the company who shouldn’t be here,” he said in one of his weekly Q&As with staff. The Facebook founder added that he was pushing for more aggressive goals. “Some of you might decide that this place isn’t for you,” he added, “and that self-selection is okay with me.”

Mark Zuckerberg has always considered himself a wartime CEO. .

Mark Zuckerberg has always considered himself a wartime CEO. .Credit:AP

It’s a little jarring to hear a tech CEO turn up the heat in a way that echoes Jack Welch’s rank-and-yank approach to culling low performers. Tech companies, after all, have generally operated like employee nirvanas, paying high salaries and offering lavish perks from catered meals and free concerts, to on-site massage and egg freezing.

But the sharper tone is necessary. Tech has entered an unfamiliar era of uncertainty, marked by tumbling shares and hiring slowdowns — challenges that would have been shocking even a year ago. To make matters worse, social media firms like Google’s YouTube, Facebook and Instagram are also facing heightened regulatory scrutiny while trying to refashion their products on the fly to fend off competition from ByteDance’s TikTok.

All told, the sunny days of tech’s unstoppable growth are over, and the latest warnings from Pichai and Zuckerberg suggest not only that second-quarter earnings due later this month could leave investors aghast, but that they are positioning themselves to get tougher on the workforces they have indulged for years.

Zuckerberg is, according to his own reported description, a wartime CEO by nature. He was influenced by the writings of Facebook investor Ben Horowitz, who posits that a peacetime CEO “focuses on the big picture,” while a wartime CEO “cares about a speck of dust on a gnat’s ass.” While a peacetime CEO tries to minimise conflict, a wartime CEO “heightens the contradictions.”

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Relentlessly ambitious and competitive to the point of being paranoid, Zuckerberg has run Facebook with a sense of urgency even when times were good. In 2012 he chased Instagram and bought the company for $US1 billion after warning his CFO that the company “could be very disruptive to us,” according to emails published in antitrust proceedings against the company. Two years later he bought WhatsApp for $US19 billion for apparently similar, defensive reasons.

That naturally caught the ire of antitrust regulators, and Zuckerberg’s shameless approach to cloning competitors has also earned him accusations of being a copycat. (A running joke is that Snap CEO Evan Spiegel is Facebook’s head of R&D, thanks to all the features Facebook has aped from the smaller company.) But when times are lean, that kind of ruthlessness can also help protect a company’s bottom line.

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