In the spring of 2020, as a new and highly contagious virus spread throughout the country, the US came to a standstill. The economy shut down, cities emptied, and white-collar workers were sent home en masse. Platforms like Zoom, Slack, and Microsoft Teams surged in usage as WFH became ubiquitous. From remote schooling and virtual weddings to app-based grocery delivery and livestreamed concerts, the pandemic accelerated and cemented society’s increasing reliance on digital platforms. Already one of the most powerful forces in the American economy, the tech sector suddenly became the infrastructure underpinning every aspect of life.
Tech giants went on an unprecedented hiring spree, scrambling to meet new demand and cement their dominance. Where tech workers already had tremendous labor market power in the preceding decade, the postpandemic boom for technology tilted the balance even more sharply in favor of workers. Demand for technical skills exploded, and tech companies scrambled to recruit engineers, designers, and data scientists, often without fully knowing what to do with them.
Between 2019 and 2022, Amazon and Facebook more than doubled their head count, growing by 92 percent and 93 percent, respectively. Microsoft added nearly 80,000 new employees, while Google brought on over 60,000. With so many workers joining the industry, many were onboarded to teams with no immediate tasks, held in reserve for future projects that hadn’t yet been planned—they were, in other words, hired with nothing to do.
Tech’s pandemic-era hiring boom was underwritten by an extraordinary financial backdrop shaped by over a decade of loose monetary policy. In the wake of the 2008 financial crisis, the Federal Reserve slashed interest rates to near zero to stimulate the economy. And for most of the 2010s, rates remained near zero, creating what economists call an era of zero interest rate policy, or ZIRP.
With money easy to borrow and venture funds flush with cheap capital, tech firms expanded aggressively, and office workers reaped the rewards: skyrocketing salaries, unprecedented job mobility, and the leverage to demand more from their employers. The result was a golden age for tech workers. Many could choose which projects to join, pursue skill development on the clock, or even negotiate permanent remote work arrangements. In this environment, tech workers were prized assets, courted and catered to in ways rarely seen in other industries.
Then inflation hit as an unprecedented flood of pandemic-era stimulus cash went into the hands of consumers, and the Fed responded with one of the most aggressive tightening campaigns in decades. Rates were raised from near zero to roughly 5.5 percent, with the bank making 10 consecutive hikes in just 15 months. As intended, the economy turned cold. The S&P 500 fell 19.4 percent, the largest drop since 2008. Sectors across the board felt the slowdown. Real estate activity plummeted as higher mortgage rates discouraged potential homebuyers. Top retail and entertainment firms, from Walt Disney to Nike to Home Depot, were similarly hit as consumer spending drew back.
But more than any other sector, the tech industry, which had soared to unprecedented heights during the pandemic, fell the hardest. Having experienced outsize gains during the easy-money boom years, tech’s rapid ascent was followed by an equally dramatic crash.
Major tech firms began missing Wall Street’s expectations. Amazon reported sluggish growth and razor-thin margins. Google saw four consecutive quarterly declines in profit, hit hard by a slowdown in digital ad spending. Microsoft also faced headwinds, with its cloud business, its key growth driver, showing signs of deceleration. The exuberance that had fueled the postpandemic rally evaporated, and the air came rushing out of the sector’s inflated valuations. Almost $4 trillion in combined market value vanished from Amazon, Facebook, Apple, Google, and Microsoft. Facebook lost two-thirds of its value. Amazon lost half. And nearly $1 trillion was shaved off Microsoft’s valuation. At year’s end, the industry fell 30 percent, making 2022 the third-worst year in the industry’s history, after the 2008 financial crisis and the bursting of the dot-com bubble in 2000.
Almost in lockstep with the Fed’s unprecedented interest rate hikes, tech companies, long buoyed by an unshakable belief in inevitable growth, implemented a series of mass layoffs and budget cuts. The industry that had once prided itself on generous perks, sprawling campuses, and nonstop hiring began to speak a new language of financial restraint. For the first time in years, the tech industry, rather than pitching itself as the frontier of unstoppable growth and expansion, presented a different vision of its future: austerity.
So why was tech hit so hard? An industry built on cheap capital suddenly found itself exposed to a level of risk that made the dominant business model no longer tolerable. In a high-interest-rate environment, the opportunity cost of risky bets increases dramatically because cash can accrue real value in safer assets. As a result, investors became more cautious, demanding safer returns and more predictable outcomes instead of long-shot promises of future monopolies.
For tech firms, this new financial environment meant that executives could no longer justify burning cash in the name of growth. Lavish spending on massive compensation packages, generous perks, and playground-like offices started to look less like visionary leadership and more like fiscal irresponsibility. The massive hiring spree of previous years was now recast as misguided bloat.
But rather than acknowledge their own reckless expansion, CEOs and venture capitalists threw the blame on workers. Silicon Valley investor Keith Rabois, a prominent voice among tech elites, declared that thousands of employees at companies like Facebook and Google were doing “fake work.” He complained that new employees, referring to those brought in during the pandemic hiring spree, simply had to “sit at their desks and do nothing.” David Ulevitch, a general partner at the prestigious venture capital firm Andreessen Horowitz, similarly suggested that as much as half of Google’s white-collar workforce wasn’t contributing meaningful labor. He blamed the rise of “bullshit jobs” across big tech firms, suggesting that many roles existed primarily to fill a head count, not deliver results.
Tech CEOs also piled on. Google CEO Sundar Pichai announced at an all-hands meeting in 2022 that there were “real concerns that … productivity as a whole [was] not where it needs to be,” adding that workers needed to “minimize distractions and raise the bar on both product excellence and productivity.” Wayfair CEO Niraj Shah, in an infamous internal email to his employees, threatened workers for being lazy, saying that “there is not a lot of history of laziness being rewarded with success.” Meanwhile, Mark Zuckerberg responded to claims of fake work by declaring 2023 the company’s “year of efficiency.” After losing billions in the capital market crash, tech’s billionaire class needed somewhere to pin the blame.
This new rhetoric portrayed tech workers as undeservingly privileged while deflecting accountability away from the very decision-makers who inflated their own bubbles, all while laying the ideological groundwork for the sweeping structural changes that would soon follow—none more blunt or brutal than mass layoffs.
For asset-light tech firms, where capital isn’t tied up in facilities or merchandise, labor is the largest cost and the easiest line item to cut. During the ZIRP years, keeping extra engineers on payroll was a small price to pay compared to the potential upside of a breakthrough they might help deliver. But in the high-interest-rate environment of 2022, every employee represented a financial trade-off, and firms had to weigh their cost against the guaranteed return of simply holding that cash in the bank. In this context, tech workers were no longer assumed to be future value creators by default; instead, they had to earn their place by delivering short-term returns. Unlike traditional workers, whose daily labor continually generates revenue for their employers, most tech workers are tasked with developing automated digital products—platforms, software, or other bits of code—that don’t require daily labor to operate.
Because of this, laying off tech workers does not result in an immediate loss of revenue, since the value of their past labor has already been congealed into the codebases on which digital products are built. As a result, the absence of their labor may not be felt until much later, if at all. So, whereas a traditional firm would see a direct reduction in revenue when cutting the workforce, layoffs in tech (especially in product teams) have the reverse effect, functioning as an immediate cost-saving measure (and thus a boost to profitability) without short-term penalty.
This is precisely the mechanism that tech firms took advantage of when they started a wave of layoffs to restore profitability and regain investor confidence. At the end of 2022, Facebook cut 11,000 jobs, amounting to over 10 percent of its workforce. Amazon followed by axing 10,000 corporate employees. Twitter, in the most extreme case, cut 80 percent of its staff when Elon Musk took over the company. By year’s end, nearly 93,000 US-based tech workers had been let go, marking a historic high for the industry. The trend only accelerated in 2023, with total layoffs reaching over 191,000. Even firms long seen as stable employers, such as Google and Microsoft, each eliminated over 10,000 positions. Every layoff announcement triggered a bump in stock price—Facebook’s first major round sent shares up 5 percent overnight. Wall Street analysts applauded the “discipline” and “focus on efficiency.” By the end of 2023, pessimism over the job market shrouded the industry, long thought to be largely immune to layoffs.
Tech workers’ labor market power vanished overnight. Even highly qualified candidates struggled to secure a single interview, let alone an offer. Online forums and LinkedIn feeds filled with despairing accounts of tech workers applying to hundreds of jobs with no response. In 2023, new computer science grads faced their worst year since the dotcom bubble burst. For the first time, the industry’s workforce—long thought to be a haven for good jobs—was forced to reckon with a new level of precarity.
What began as a financial response to a deteriorating macroeconomic outlook has since solidified into a lasting managerial strategy. However, these new austerity measures, initially framed as a necessary correction, have far outlived the conditions that justified them.
Throughout 2023, the US economy repeatedly defied expectations. Consumer spending remained strong, job growth beat forecasts month after month, and inflation gradually slowed. By mid-2023, as inflation dropped to 3 percent (from 9 percent in the year prior), the Fed had managed a so-called soft landing, cooling the economy without tipping it into recession. Tech giants like Facebook, Google, Microsoft, and Amazon all reported stronger-than-expected earnings in the first quarter of 2023. Meanwhile, the release of OpenAI’s ChatGPT injected a new jolt of boosterism into the sector—along with a massive infusion of new capital.
And yet, even as recession fears subsided and earnings rebounded, the instruments of austerity remained active. With each layoff announcement rewarded by a bump in share price, job cuts became a reliable lever for stimulating investor confidence. Now that employers have reasserted dominance over tech workers, they are showing no intention of relinquishing it.
To fully understand tech’s crackdown on its workers and its embrace of illiberal politics, it’s not enough to see the attack solely as a response to macroeconomic pressures. Important, too, is the broader cultural and political context in which such an attack on tech workers was being waged. By the start of this counteroffensive—over two years into the pandemic—the good image of the tech industry had been thoroughly smeared. The techlash had hardened into a durable anti-tech sentiment.
This backlash gave new momentum to a rising populist left who have staked their rise on opposing the corporate behemoths of the country. Politicians like Bernie Sanders, Elizabeth Warren, and Alexandria Ocasio-Cortez made breaking up Big Tech a part of their political messaging. Their attacks on monopoly power, worker exploitation, and algorithmic bias galvanized a generation of progressive voters and turned the tech industry—once the darling of liberal America—into a symbol of corporate excess and unaccountable power.
When Joe Biden won the presidency in 2020, this anti–Big Tech left was folded into the Democratic coalition, bringing its hostility toward Silicon Valley into the heart of the administration. What followed was the most tech-skeptical Democratic government in decades. The Biden-era Democrats increasingly saw Big Tech as a monopoly threat to both markets and citizens—a sector that needed to be contained, not courted. Under Federal Trade Commission chair Lina Khan, the administration launched sweeping antitrust suits against Amazon and Facebook. The Securities and Exchange Commission and the Treasury Department cracked down on cryptocurrency markets, sending valuations plummeting. AI, too, became a target for scrutiny, framed as a safety and regulatory concern and in need of federal oversight. For many liberal tech billionaires, this animosity came as an affront to tech’s long-standing coalition with the Democratic Party.
Many of Silicon Valley’s top figures also felt personally snubbed. Elon Musk was excluded from Biden’s 2021 electric vehicles summit—a celebration of clean-energy innovation that included GM, Ford, and Chrysler but not Tesla, the company that had done more than any other to make the technology mainstream. Venture capitalists like Marc Andreessen and Ben Horowitz complained that they couldn’t get meetings with senior officials. Clearly, many in Silicon Valley came to feel they were denied the recognition and access they once enjoyed under President Clinton and President Obama, who had both championed American technology abroad and kept the industry deregulated at home. Alienated by this shift, tech’s billionaires drifted rightward toward Trump’s anti-woke, populist coalition.
The conservative ideas underpinning Trump’s following are not entirely new to the tech industry. Venture capitalist Peter Thiel, who had already become known for openly declaring freedom and democracy as incompatible, made his alliance with Trump clear during Trump’s 2016 run for the presidency. Curtis Yarvin, a tech founder, right-wing theorist and longtime advocate for “techno-monarchism”—a system whereby tech leaders would have the kind of power and control of the monarchy of old—had even forged ties to politicians like JD Vance and others under Trump’s wing. The combination of regulatory hostility, personal alienation, and cultural backlash accelerated the right’s ascent within what was then a mostly liberal sector.
The same techlash that pushed the Biden administration into adopting overtly anti–Big Tech policies also created the conditions for the tech worker movement itself, fueling an internal revolt from the billionaires’ own employees. As we’ve seen over the last few years, tech workers have repeatedly confronted their CEOs and others in the executive suite over military contracts, partnerships with Big Oil, and workplace harassment. They’ve also started to organize—from the first wall-to-wall union at Kickstarter to the formation of the Alphabet Workers Union, and with support from international unions like the Communication Workers of America and the Office and Professional Employees International Union. What many executives once dismissed as isolated acts of dissent came to be seen as an existential threat to their unilateral authority, spurring their own radicalization and class consciousness.
Andreessen explicitly linked his own radicalization to the tech worker movement, saying in a 2025 New York Times interview that he thought tech companies were “being hijacked to engines of social change, social revolution.” He added, “The employee base [was] going feral. There were cases in the Trump era [referring to the president’s first term] where multiple companies I know felt like they were hours away from full-blown violent riots on their own campuses by their own employees.”
Andreessen was not an outlier among the tech elite. Like many other Silicon Valley executives, he was a largely apolitical technocrat who had been told his entire career that progressivism and capitalism were not only compatible but mutually reinforcing, and that amassing wealth was proof of both moral virtue and entrepreneurial grit. The techlash—and especially the rise of the tech worker movement—shattered that illusion.
Out of this disillusionment emerged a new billionaire consciousness, a distinctly reactionary turn that broke with the old Californian Ideology that had defined an earlier cohort of Silicon Valley billionaires. Where worker autonomy had once been celebrated as a key to creativity and innovation, it was now being dismissed as indulgence, even weakness. What was once framed as a partnership between management and workers, united under a common mission, was openly recast as a power struggle—and management was determined to win.
Even before mass layoffs began, Andreessen was eager to frame tech workers for the bust, derisively calling them the “laptop class,” which he described as “Western upper-middle-class professionals who work through a screen and are totally abstracted from tangible physical reality and the real-world consequences of their opinions and beliefs.”
Going beyond the necessary cost cutting, tech’s newly radicalized billionaires used this moment to wage class war and enforce discipline on what they saw as an unruly workforce. Gone were the days of coddling tech workers and viewing them as the industry’s most valuable assets. Instead, the progressivism and idealism that had come, in part, from the techno-utopianism of the 2000s and 2010s was now seen by Silicon Valley’s executives and investors as an explicit threat. And so, these billionaires set their sights on winning the culture war and dismantling the left-liberal foundations they believed had turned their own workers against them. To do so, and to avoid another bout of Biden-esque regulation, they threw in their support with Trump, laying the foundations of what would soon be known as the tech oligarchy—a power bloc uniting capital and politics under a shared project of restoring control.
