• A trifecta of economics, pandemic-era realities, and political pressure is changing tech culture.
• From Big Tech to Silicon Valley startups, companies are pushing to "do more with less."
• Leaders aren't shy about wielding their power and aligning around a hard-driving strategy.

For years, Shopify CEO Tobi Lütke enjoyed a reputation for growing the $125 billion e-commerce company without working the grueling hours expected of startup founders.

"My job is incredible, but it's also just a job. Family and personal health rank higher in my priority list," he wrote in a now-deleted post on X, then Twitter, shortly before the pandemic, as reported by Business Insider at the time. "The only times I worked more than 40 hours in a week was when I had the burning desire to do so."

This year, even Lütke appeared to change his tune.

"I'm at home for dinner but I work at least 10 or so hours a day and a lot of the weekend," Lütke wrote on X. He was responding to a user who called him a "counter-example" to a meme suggesting you can't have work-life balance and a breakthrough startup. "I don't want people to get misguided by this meme."

Across tech, the tables have turned for employees as performance pressure and proclamations of "efficiency" and "intensity" replace perks and pampering. Sweeping layoffs have become the norm in an industry that, in recent memory, enjoyed job security. The pressure to dominate in AI has created intense competition, as companies use the technology to do more with fewer workers. Already hard-driving workplaces have become even harder.

While the situation for tech employees has been changing since the pandemic boom ended in 2022, more recent developments include a decidedly different tone from executives. Now, companies aren't just making these changes; they want to be seen making them.

Meta earlier this year said it was cutting 4,000 employees deemed low performers as CEO Mark Zuckerberg said the "culturally neutered" corporate world had gotten away from "masculine energy." Amazon insisted that employees return to the workplace every weekday, a policy some employees say is stricter than before the pandemic.

Other companies have cracked down, too. Microsoft, which was once referred to as a "country club" for its relatively lax culture, cut 2,000 employees as it overhauled its review process to eliminate underperformers more quickly.

Google, which practically invented tech perks like free lunch, started an "efficiency drive." Its cofounder Sergey Brin, who had stepped away from leading Google but now often shows up to work on the company's Gemini AI models, recently recommended that employees working on its Gemini tools should work 60 hours a week and go into the office "at least every weekday." Wall Street has rewarded this rigor, as stock prices of Meta, Amazon, Microsoft, and Google's parent, Alphabet, have surged since 2022.

Startups also see a trickle-down effect from Big Tech companies' pressures. Krish Ramadurai, a partner at AIX Ventures, said he had noticed a "pronounced shift" toward leaner teams and rigorous performance standards at startups.

Between performance-based cuts, return-to-office mandates, and the stripping of workplace perks, it's clear not only that the tech industry is done coddling employees, but that companies want to send the message those days are over. BI interviewed employees from tech giants, including Microsoft, Google, Amazon, and Meta, as well as various tech startups, about the changes. Some spoke on the condition of anonymity since they're not authorized to talk to the press, though their identities are known to BI.

Meta, Microsoft, Google, and Amazon did not comment. Shopify did not respond to a request for comment.

From comfy to collapsed

For years, fierce competition for tech workers meant companies spoiled employees with astonishing salaries and swanky perks, such as in-office massages and free food cooked by fancy chefs.

By 2022, tech companies seemingly couldn't throw enough money at workers. Early that year, Amazon more than doubled its maximum base salary, and Microsoft gave across-the-board raises to employees up to a certain level of seniority to dissuade them from leaving for competitors.

As the pandemic boom ended, tech stocks plummeted, and interest rates increased through 2022. This prompted an efficiency drive by many companies as investors demanded profitability over growth at all costs.

Also that year, companies watched the billionaire Elon Musk's handling of the Twitter acquisition, in which he cut thousands of employees, plus perks like free lunches, and demanded a commitment to a new "extremely hardcore" vision and "long hours at a high intensity." At one point, Twitter workers were begging on Slack for toilet paper and clean bathrooms amid Musk's drastic cost-cutting.

As of late last year, Fidelity valued X at only about 20% of the $44 billion that Musk bought it for in 2022. Still, his approach may have expanded what the tech industry thought possible in terms of workforce and cost cutting.

"People paid attention because the prevailing wisdom was you couldn't take out that much of an engineering organization and put that much instability on it and not have it fall over," Brad Porter, the founder and CEO of Cobot, told BI. "It did come close to falling. He pushed right to the edge of it actually falling over, but it didn't fall over."

'Do more with less'

By the end of 2022 and in early 2023, tech giants had conducted unprecedented rounds of layoffs. Meta, Amazon, Google, and Microsoft collectively laid off more than 60,000 employees during that time.

Layoffs have remained at a steady drip across the industry since. Such cuts have become so frequent at Google, for example, that employees have taken to crowdsourcing information on layoffs in an internal Google Doc.

Employees told BI about the pressure across the industry to "do more with less." "There's lots of uncertainty," one longtime Amazon employee said, "and lots of pressure to perform the jobs of multiple people at the mercy of ruthless middle management."

Tech companies are also culling middle management layers. Amazon in September announced a plan to increase the ratio of individual contributors to managers by 15% by the end of this month. In December, CEO Sundar Pichai told his staff that Google had cut vice president and manager roles by 10% as part of its efficiency drive. Microsoft also monitors what it calls "span of control," tracking the number of reports per manager.

Performance pressures

Amid the cuts, employees across the industry say companies are dialing up the performance demands.

Meta told its staff in January that it would eliminate roughly 5% of its workforce, or about 4,000 employees, to "raise the bar on performance management," as Zuckerberg wrote in an internal memo.

Google also increased pressure on employees. Perhaps most telling was Pichai's December comments attempting to clarify what "Googleyness" means for a modern Google. Once a squishy and vague philosophy for the search giant's corporate culture, Pichai said he believed it now meant, among other things, being "mission first."

"There is more pressure for individuals to be better in their roles, and there is much more aggressive performance management happening these days," a longtime Google manager said.

"We're being asked to do more for less," said another current longtime Google employee.

That same Google employee said that Silicon Valley had been moving toward more ruthless, efficient workplaces for a while — and that the current political climate "gives them the green light to do it openly." Google has been working to become more efficient since its chief investment officer Ruth Porat joined the company as CFO from Morgan Stanley in 2015, "but now the masks are off," the person said.

Microsoft was once referred to as the tech industry's "country club," meaning a place employees would go after they were done working hard in their careers and wanted to coast before retirement. A change this year shows how far Microsoft has shifted when it fired 2,000 employees deemed low performers without severance and ended their health benefits the same day. This kind of performance-based mass cut showed a shift for the tech giant.

One longtime Microsoft senior-level employee said they felt that the "culture shifts toward firmer performance expectations" at peer tech companies like Google, Meta, and Amazon made it more acceptable for Microsoft to do the same.

At TikTok, the pressure to perform jumped last year after the company directed managers to deliver more low scores in performance reviews, leading to PIPs and eventual exits. At the same time, six current and former employees told BI their goals had become much harder to hit. One staffer called the goals "unattainable."

The company has also recently heightened RTO requirements for some teams. In February, it told its US e-commerce workers that in addition to being in the office five days a week, they would physically need to be in the building for eight hours a day. Ten current and former workers told BI that burnout had become common, leading to some going on mental health leave to get a break. TikTok did not respond to a request for comment.

"You feel like if you're not hitting a target, even if it's a moving target, you're in trouble," a former staffer who went on leave for mental health reasons told BI. "For me, it was just feeling like a failure, like I couldn't do anything right."

It's gotten hardcore in the 'valley of death'

The increasing pivot to performance has even made it to already hard-charging startups.

Startups have a time-honored tradition of an always-on, work-first lifestyle. Early employees are expected to put in grueling hours of coding and customer support during this critical phase, known as the "valley of death," when startups are flush with initial funding but not yet profitable.

The free-money era tested this tradition of hustle and thriftiness. Investors heaped money into small startups when interest rates bottomed out, and the blitz scaling that followed set off an arms race of perks to help startups attract top talent. Employees could work from home and set their own schedules. They pocketed wellness stipends and trotted the globe on extravagant off-sites. The tech startup Bolt gave many employees Fridays off.

"I think many individuals — founders included — lost sight of the true goal of a company. It is to make money," Mang-Git Ng, the founder of Anvil, a paperwork automation company, told BI.

Now, the executives who had lavished high salaries and fancy perks on their employees are resetting expectations, winding down remote work, and cutting head count.

"Everyone who comes into our office at Decagon has opted into working with a team that's here because we want to do big things and see bigger and better results," said Jesse Zhang, the founder of Decagon, who now badges into the office six days a week. "There's no such thing as a rocketship that doesn't have a certain level of intensity to fuel its trajectory."

Call it the Big Tech trickle-down effect.

"Founders aren't sugarcoating it," said Natan Fisher, who runs a recruiting firm, SingleSprout, that specializes in hiring technical talent. "I've had a few cofounders tell employees they aren't working hard enough, and, 'If you're not all in, no hard feelings, we can give severance, but we can't slow down.' Late nights, weekends, even people crashing at the office, it's real."

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Emma Cosgrove, Eugene Kim, and Pranav Dixit contributed to this report.

• TikTok Shop, the e-commerce arm of TikTok, launched in Mexico in February.
• It offers sellers a bridge into Latin America, a fast-growing region for online shopping.
• Its arrival in the country offers a way for US Shop sellers to hedge against a possible TikTok ban.

TikTok's future may be up in the air in the US, but it's ramping up in other parts of the world.

The company officially launched its e-commerce product, Shop, in Mexico in February after testing it in the country. The platform is still getting off the ground there, but it's attracting local sellers like beauty brands Sarelly, Renova, Pink Up Cosmetics, and Sinless Beauty.

The move across the border is also opening an opportunity for US brands to expand into a fast-growing market — and hedge against a possible TikTok ban.

Beauty brand KimChi Chic Beauty, supplement brand Beast Bites, and security-camera brand Wyze are among the US companies planning to expand into Mexico, per two Shop agencies that work with the firms.

"It's a logical play for any seller that saw success or could see success on TikTok Shop," said William August, CEO of the social-commerce agency Outlandish, which runs a livestream facility in Los Angeles and recently set up operations in Mexico. "Regardless of what happens in the US, they should be doing it anyway."

TikTok Shop has grown quickly in the US since it first began testing the feature there in 2022. But the app is operating on shaky ground due to a divestment law that requires its Chinese owner, ByteDance, to sell the app or essentially stop operating in the US. While that hasn't deterred many brands that sell goods on TikTok in the US, some are busy diversifying onto other platforms like live-selling app Whatnot or entertainment platforms like Flip and LTK. Moving into other TikTok Shop markets, like the UK, Singapore, and now Mexico, is another tactic.

How a US brand can expand into Mexico

In some instances, Outlandish is helping US merchants launch in other countries by registering a local business on their behalf, called a merchant of record.

The company also acts as a one-stop shop for other services, like logistics and compliance.

Outlandish set up a joint venture with marketing and retail media firm MindgruveMacarta to help bring US and global brands onto TikTok Shop. In February, Outlandish sent its US livestream training managers to Mexico to teach local staff about selling live, August said. It plans to open a video production hub in the country with the capacity to produce thousands of shopping videos.

"So long as you have a good product, when you enter a new market with TikTok Shop, you can grow a brand there," August said.

Social-commerce agency Orca is also working with third-party logistics providers in Mexico to help US brands start selling in the country, offering services like inventory management and compliance, said its CEO Max Benator. "If you're a brand in the US, you can't just turn on in Mexico," he said.

Shop's entry into a neighboring country allows US sellers to do more than lower their risk from a US ban. It gives them access to an e-commerce market that's on the rise. In September, EMARKETER forecast that e-commerce spending in Latin America would reach close to $180 billion in 2024.

Mexico, in particular, is expected to drive a lot of that growth. In 2024, EMARKETER forecast Mexico would be the fifth-fastest growing e-commerce market in the world, growing online sales by 15.7%.Major retailers like Amazon, Walmart, and Mercado Libre are investing billions of dollars to improve their operations in Mexico and reach a nascent customer base there, according to the firm.

"Mexico and Latin America are some of the fastest growing e-commerce markets in the world," Benator said.

• Investors are opening their wallets to social-shopping startups as TikTok's US future sits in limbo.
• Companies like Whatnot and ShopMy have raised rounds in the tens of millions of dollars.
• Upstarts are also making acquisitions and launching creator funds to capitalize on the moment.

The moment is ripe for social-commerce startups in the US.

Investors are betting big on platforms like Whatnot and ShopMy. In January, Whatnot said it closed a $265 million fundraising round after crossing $3 billion in livestream sales in 2024. ShopMy also said it closed a new round worth $77.5 million after reaching profitability.

"The timing of this raise aligns with a fundamental shift we're seeing in the market — creator marketing is evolving from an experimental channel into a core performance driver for brands," ShopMy's CEO Harry Rein told Business Insider.

Part of the category's momentum stems from TikTok. Over the past year, the company helped popularize livestream selling and connect thousands of merchants with influencers via its e-commerce tool, Shop.

But the app's US future is uncertain. It's disappeared from app stores and faces other fallout from a divest-or-ban law that requires its Chinese owner to separate from its US assets. Some e-commerce partners are testing alternative platforms to diversify where they sell.

Outside ShopMy and Whatnot, apps like Flip are gaining steam this month. Flip, a TikTok-like app focused on user-generated product reviews, recently landed in the top 10 in Apple's app-store rankings. Flip could benefit from a TikTok ban if the company fails to find a path forward by an April deadline set by President Donald Trump.

"If the TikTok ban does move forward, these platforms have a huge opportunity," said Ollie Forsyth, a former senior manager at investment firm Antler who now writes the newsletter New Economies. "Not only can they acquire huge volumes of creators, they can also acquire a huge number of new consumer users."

How social-commerce startups are seizing the moment

On top of investors pouring cash into social-commerce startups, startups themselves are spending now to capitalize on a moment of flux in the US market.

Flip pledged to offer equity grants to creators, for example, to encourage them to engage more on the platform.

Attracting new users in large numbers will be key to filling the TikTok void if a ban were to go into effect, said Matt Nichols, a partner at Commerce Ventures.

TikTok Shop succeeded because it had a unique combination of a large user base and an algorithm that could match those users with products they were likely to buy, Nichols said.

"Twenty years ago, retailers dictated what consumers purchased, and there was a long sales cycle," Nichols said. These days, there are "more quickly changing demand trends based on influencers, which has worked really well for TikTok Shop, but also hyper-fast retailers like Shein."

As an investor, he sees the best opportunities in startups working to help retailers and influencers succeed on other platforms that already have similarly big user bases, like Instagram and YouTube.

Former TikTok e-commerce leader Sandie Hawkins said in a recent interview with BI that the shopping experience TikTok made popular is likely to be imitated elsewhere.

She said social shopping creates a "community environment" where friends tell you what they think you should buy. "You're taking those recommendations right there, and you're closing the loop instead of having to send them to go someplace else," she said.

Here's a breakdown of some of the big deals announced in January in the social-commerce category:

• Livestream shopping app Whatnot closed a $265 million Series E round at a roughly $5 billion valuation. DST Global, Avra Capital, and Greycroft led the round, with participation from Andreessen Horowitz, Lightspeed Venture Partners, and Durable Capital Partners, among others.

  Whatnot's CEO Grant LaFontaine told BI the company planned to use its new funding to scale marketing, product, and engineering and expand into new markets like Australia.

• Gloss Ventures, an investment company focused on launching creator brands through social commerce and other channels, raised $15 million from private-equity firm Peterson Partners.

  Gloss Ventures' cofounder Quinn Roukema told BI the new funds would support its marketing efforts and plans to expand retail sales globally.

• Creator-affiliate platform ShopMy raised a $77.5 million Series B round led by Bessemer Venture Partners and Bain Capital Ventures. Menlo Ventures participated, as did previous investors Inspired Capital and AlleyCorp.

  Rein, ShopMy's CEO, told BI the company planned to use its funds to expand into new categories like hospitality and health and wellness, as well as to scale its performance marketing tech with new data analytics and measurement features.

• Influencer-marketing firm Later announced a $250 million acquisition of affiliate company Mavely. The deal was funded with a strategic investment from growth equity investor Summit Partners. CEO Scott Sutton told BI the purchase aimed to help Later offer clients a fuller picture of their marketing spend.
  
  He said Mavely has 120,000 creators driving sales of over $1 billion in merchandise value.
  
  "All of that data and all of that ability to track what's happening in the creator economy helps us to make money for creators, helps consumers discover the right types of products, and helps us deploy ad dollars for marketers in a really seamless way," Sutton said.