The tech layoffs which came in the spotlight amid Elon Musk's antics at Twitter, have turned into a bloodbath with all major firms in the sector barring Apple, slashing their workforce. As CEOs justify job cuts as cost reduction, some such as Google's Sundar Pichai and Goldman Sachs' David Solomon have taken pay cuts themselves. But while reducing their own salaries makes CEOs look generous while thousands lose their livelihood, are the executives really taking a hit?
A great sacrifice?
Recently Zoom announced that it will layoff 1,300 people, while its founder and CEO cut down his own salary by 98 per cent. Now this may seem like a sacrifice, but in reality most of the income for top level executives comes from their stock holdings.
Some local context
For instance, while Mukesh Ambani has been foregoing his Rs 15 crore annual salary for two years in a row, his family's stake in Reliance Industries hit a 12-year high of almost 50 per cent in 2020. RIL's thriving stocks continue to reflect in Mukesh Ambani's net worth, adding more than Rs 82,000 crore to his wealth in the first five months of 2022.
What are tech CEOs playing at?
Coming back to tech CEOs, Zoom's stock surged by 10 per cent when it announced layoffs and a pay cut for the CEO Eric Yuan. This means that Yuan, with 22 per cent shares of Zoom, might even make more money than the salary he is foregoing. Similarly, stocks of all major tech firms have jumped after layoffs as they hint at a lower financial burden.
Google gained 15 per cent after firing 12,000 people, and Amazon surged by 19 per cent on the stock market, with promises of increasing efficiency by reducing expenditure on staff. Meta bounced back by a massive 50 per cent, after Mark Zuckerberg laid off workers and also launched a share buyback programme.
Workers are the only losers
This clearly shows that behind all the emotional speeches where CEOs take responsibility and are lauded for taking paycuts, they aren't losing much. At the same time, real human beings fired abruptly and their families face a struggle, while their colleagues in the sector continue to live with anxiety about layoffs.
