Tech Companies Increasingly Faced With Choosing Between Profits And Employees
Many of the largest Silicon Valley technology companies have come a long way from the days of being run out of garages by college dropouts. Some of them are now among the largest publicly traded corporations in the world. Most are still run by the founders, who are now among the wealthiest and most powerful people in the world.
Somewhere along the way, building world-changing products evolved into maximizing profits, even if it meant forgetting what originally inspired them. The problem, as is becoming more common, is employees of these companies are increasingly becoming displeased with their employer's decisions.
Let's start with Google. When the company was founded, its code of conduct said "Don't be evil," which became its de facto motto until the company removed it in 2018. There's no shortage of results when searching for Google employees being mad. Last year, Google employees were livid when they found out the company was reportedly working on "Dragonfly." A search engine designed for China, Dragonfly would require users to link their phones to perform searches, therefore enabling the government to use it to spy on citizens and blacklist anything it wanted. Google said it halted the program, although some employees aren't convinced.
In a similar incident, following employee backlash, Google pulled out of a project with the U.S. military that would've used artificial intelligence to improve the accuracy of drone strikes. There's articles describing the internal strife at Google such as "Three Years of Misery Inside Google, the Happiest Company in Tech" and "Everyone’s Mad at Google and Sundar Pichai Has to Fix It."
Meanwhile at Microsoft, employees are upset about the company winning the Department of Defense's Joint Enterprise Defense Infrastructure (JEDI) contract last week. The company apparently didn't listen to its employees, who even wrote an open letter last year saying "We joined Microsoft to create a positive impact on people and society, with the expectation that the technologies we build will not cause harm or human suffering." Following the news Microsoft won the contract, the group said "As Microsoft workers, we are now complicit of 'increasing the lethality' of the U.S. Department of Defense."
Microsoft employees were also recently upset with Github, one of the company's subsidiaries, for its contract with the U.S. Immigration and Customs Enforcement agency. Another example details how Microsoft employees were upset about a deal the company struck with the military to sell AR headsets that would be used for training and active battlefield situations.
Facebook, which has been described as "cult-like," also appears to have its fair share of unhappy employees. This week, a group of Facebook employees sent a letter to co-founder and CEO Mark Zuckerberg expressing anger at his decision to allow politicians to post ads on the social network without being fact-checked, calling it a "threat to what FB stands for." Earlier this year, employees were unhappy with the company's decision to outsource content moderation positions to third-party companies.
For each of these companies, and likely many more in Silicon Valley, there's countless articles about the variety of issues employees are unhappy about. It's interesting to see how they have transformed over the years and how the people who helped them achieve astronomical valuations now seem to be the ones most commonly upset. At a time when regulators are breathing down the necks of these companies, the last thing they need is for their employees to turn on them as well.
Chalk up another loss for SoftBank. Softbank is set to take a loss on Wag, the dog walking app it invested $300 million in at a $650 million valuation. The company, which is down to about $100 million in cash and had annual sales of less than $50 million, is now seeking a potential buyer for less than $300 million. The most likely suitor could be Petco, which is trying to keep up with its competitor Petsmart, which recently spun off pet e-commerce company Chewy.
This is obvious, but the strike really hurt General Motors. Just a few days after striking a deal with the UAW, GM cut its full-year earnings and automotive adjusted free cash flow guidance. Earnings are now expected to be in the range of $4.50 to $4.80 per share, down from the prior forecast of $6.50 to $7.00 per share. Automotive adjusted free cash flow is now expected to be between zero and $1 billion, down from the prior forecast of $4.5 billion to $6 billion. Overall, the strike will cost GM $3.8 billion for the year with about 300,000 units in lost production.
Sounds like something out of James Bond. WhatsApp, which is owned by Facebook, has sued Israeli technology company NSO Group for allegedly assisting government spies break into phones around the world. The suit claims 1,400 people, including diplomats, political dissidents, journalists and senior government officials, across four continents were targeted in a hacking campaign. NSO denied the allegations, saying "In the strongest possible terms, we dispute today’s allegations and will vigorously fight them." WhatsApp is used by roughly 1.5 billion people worldwide.
Back to the drawing board. After pulling its flavored pods from shelves in anticipation of them being banned, Juul is laying off 500 employees, including top executives. The company's new CEO, K.C. Crosthwaite, removed the Chief Administrative Officer, Chief Financial Officer, Chief Marketing Officer and Senior Vice President of Advanced Technologies. The cuts are substantial, as the company currently employees 4,100 people. In a statement, Crosthwaite said "As the vapor category undergoes a necessary reset, this reorganization will help JUUL Labs focus on reducing underage use, investing in scientific research, and creating new technologies while earning a license to operate in the U.S. and around the world."
Got a spare hundo? According to the Federal Reserve, you're more likely to come across a $100 bill than a $1 bill for the second-consecutive year. Over the last decade, the $100 bills' share of total currency in circulation has gone from 73% to 80%. As for the total currency in circulation, it's now an estimated $1.76 trillion and accounts for 8.2% of gross domestic product, the highest level in at least 36 years. Prior to the 2008 financial crisis it was just 5.6%.