Large companies are scaling back on office perks and incentives to cut costs as prices continue to rise.
Key Details
- Many large businesses are cutting back on employee perks, including wellness allowances, free coffee, free dry cleaning, cab services, and in-office lunches.
- Since the start of 2022, there have been more than 216,000 tech layoffs as large tech companies hired quickly during the pandemic and realized they did not need as many workers.
- To save money, companies began dialing back on employee perks, and if the cutbacks didn’t help, many resorted to laying off employees.
Why it’s news
During the pandemic and the years leading up to 2020, many tech companies were known to be fun and exciting workplaces with an abundance of perks given to employees to keep them in the office. Having a fun place to work was a major selling point in hiring talent for rapidly growing companies.
After the pandemic, more companies began adding extras such as free transportation, free food and coffee, and other exciting perks like on-hand massage therapists to get employees to join the company and start in the office rather than remotely.
Many companies are scaling back on the perks to cut costs, which feels like a punishment for employees. Many employees have grown accustomed to the add-ons and feel they are a bonus form of compensation, and cutting them back is like punishment.
As more layoffs continue to surge through the tech sector, many companies are first trying to cut back on the extras before resulting in letting go of employees. Facebook ended free laundry and dry cleaning services for employees before firing 11,000 workers, Twilio Inc., which has already faced two rounds of job cuts in the last five months, slashed its employee allowances for spending on wellness and books. Salesforce, which is cutting 10% of global staff, is also dialing back on many benefits like free coffee, according to The Wall Street Journal.
Although many employees have reported being hurt by the lack of complimentary amenities, other employees who were laid off reported job security is worth more than free perks.
The cost of the free amenities started adding up quickly for companies with a large number of employees, and as prices continue rising and businesses struggle for revenue, the perks are being cut and could see no return.