The “perk-cession” has landed: companies are cutting back on employee benefits as profit takes precedence
Farewell, unlimited kombucha tap… and free post-meeting Pilates. As corporations prioritize cost cuts, cushy employee perks that’ve long been used to attract talent are vanishing faster than tortillas at a build-your-own-taco happy hour. From Silicon Valley’s tech titans to Wall Street’s banking walruses, the “perk-cession” has arrived, The Wall Street Journal reports.
Companies are slashing benefits like barista-brewed coffee, fitness classes, pet insurance, extra PTO days, and catered meals.
Some examples: Meta ended free laundry and dry cleaning, Salesforce canceled its wellness retreat, and Goldman Sachs nixed free cabs to the office.
Not just the fun stuff… About half of US companies plan to cut benefits like parental leave, childcare subsidies, and adoption programs, a new survey suggested.
Hard fork… The perk-cession comes after mass layoffs at companies that are scaling back after hyper growth during the pandemic. Meta, famous for its cushy office perks, slashed 11K employees in the biggest layoff of the year so far. Beyond tech, banks like Goldman and Citi and manufacturers like GM and Ford have announced reductions.
But the US job market is historically hot: In January there were nearly two open roles for each available worker, and unemployment was just 3.4%.
Unbalanced: But that’s largely thanks to the hospitality industry (think: hotels, restaurants), which became the US’s fastest-growing employer.
Perk-cession is a symptom… of the efficiency bug. Instead of growth at all costs, the focus for many companies is now profit at less cost — which means “efficiency” is key. And ping-pong tables don’t exactly scream efficiency. Disappearing perks and layoffs are just a few symptoms of the profit focus, which could translate to better returns for investors. Meta shares popped after Zuck announced 2023 was the company’s “year of efficiency.”