Google employees in a company canteen. The company has shortened the opening hours of some on-site cafes. Portal
- Technology companies continue to cut their benefits and may start cutting 401(k) shares and healthcare benefits.
- Most employees won’t leave their jobs even if they lose perks that once defined the tech industry.
- But experts say that could change if financial incentives for workers are cut.
Tech companies have long offered generous office perks like on-site dry cleaning, ice cream parlors, and even paid egg-freezing services to recruit top talent and keep them happy.
Now everything changes. An economic slowdown has prompted many companies to cut jobs and benefits, sparking an identity crisis for some tech workers. According to Layoffs.fyi, a website that tracks job cuts in the industry, the tech sector has shed around 200,000 jobs since early 2023.
Meanwhile, Google has reduced the opening hours of some local cafes and Twitter has cut free lunch offers. Meta employees said the company appears to be restricting snacks and cereal in cafeterias — after the Facebook owner had already shut down on-site laundry and its Lyft subsidies program. It’s not just big tech: Tech startups and venture funds chose to scale back or scrap their lavish Christmas celebrations last year.
In this new era of austerity, few perks are safe from cuts — and some may never return. Tech companies, in particular, “are preparing for an extended period of slowing demand and capital investment, and as such are considering longer-term cuts in performance,” Aaron Terrazas, Glassdoor’s chief economist, told Insider.
There is no end in sight for the perk cleaning either. Companies will give up those benefits as long as the tightening labor market keeps the risk of talent drain at bay, experts say.
“The floor for companies seems pretty low right now,” said Daniel Keum, an assistant professor at Columbia Business School. “Other perks will be removed, but people will not leave for many reasons, including the current industry downturn with many people looking for work.”
But employers should note: some benefits are more sacred to employees than others.
While many techs can do without free sushi bars or massages, chances are they’ll resent changes in financial benefits like 401(k) matches, disability insurance, and healthcare benefits including fully-covered egg freezing or expensive prescription drug discounts .
The main benefits
The range of perks that technology companies offer is wide and varied. This includes something as frivolous as making reservations at a restaurant, and things that make more financial sense, such as generous employee discounts, travel expenses, and educational reimbursements.
Keum called the more effective perks “invisible wages.” They’re not directly reflected in employees’ salaries, but they make their lives easier and less expensive, he said.
Losing these perks is much more likely to result in current or prospective employees being turned away. In a survey of college graduates conducted on May 2 by iCIMS, a provider of recruitment software, 42% of respondents said they expected employers to offer 401(k) matches, 34% said companies do financial planning should provide, and 28% said they wanted a student loan payback program.
“Most people eventually come to a pragmatic attitude about what to give up and what the alternatives are,” Terrazas said. “The trickier conversations are about remote work, dependent health insurance coverage, and 401(k) matches.”
Experts said tech companies would not rule out cuts to these financially significant perks, regardless of whether such changes would anger workers.
The rise of artificial intelligence and increasing outsourcing of work abroad mean it could become harder for workers to demand more benefits. And a flood of new programming and engineering talent waiting in the pipeline should keep the tech job market tight.
So if you work in tech, you may have to say goodbye to some of your favorite perks forever.
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