Silicon Valley engineers joked you'd go to LinkedIn to retire. Then came the PIPs and layoffs.
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- LinkedIn's company culture has undergone a transformation over the past year, workers say.
- PIPs and layoffs marked the end of cushy perks and a "rest and vest" culture.
- Senior leaders want the company to be "scrappy" in the age of AI.
When LinkedIn told engineering managers to pick out the lowest-performing workers to place on performance-improvement plans early last year, it felt to many like the end of an era at a company.
"There seemed to be a shift towards what some people felt was an antagonistic approach towards the workforce, where they rescinded certain benefits and perks with our communities," said one engineering manager who was asked to rank his team members.
The manager would go on to lose his own job, as did 136 other engineering managers axed by LinkedIn in October as part of sweeping 700-person job cuts — the first to directly affect engineering teams. The company had earlier laid off 716 sales, operations, and support workers in May.
Business Insider spoke with 13 other current and former employees, who said the job cuts followed a swift tightening up at the company and a dramatic shift from the LinkedIn of the past. They requested anonymity as they weren't authorized to speak to the media, but their identities have been verified by BI.
Like other tech firms, LinkedIn and its employees benefited from a decade of ZIRP, the zero-interest rate environment that led to lofty tech valuations, which gave rise to big salaries and splashy perks. The effects were compounded by COVID-19, as millions of people spent the majority of their time online during lockdowns.
Then the ZIRP era ended. Inflation took hold. Interest rates shot up. Nearly half a million employees are estimated to have lost their jobs at tech companies over the last two years. Satya Nadella, CEO of LinkedIn's parent company Microsoft, said in a January 2023 memo that companies were cutting back on digital spend.
The pain of this shift was felt across Big Tech companies, but it was particularly shocking at LinkedIn, which was known for what some called a "rest and vest" culture.
"For years, there was a semi-joke that some people in Big Tech go to LinkedIn to retire," a current engineer told BI. "It was very rare to get fired or let go at LinkedIn in the past."
Now, according to another current worker: "We still have a monopoly in the space, but to achieve the same level of growth we've had in the past, more work has to be put in. It's not an easy win anymore.
"I think those stressors have trickled down to the employees," the worker added.
Amid a transformative year for the social network, LinkedIn spokesperson Nicole Leverich said the company has continued to prioritize its employees.
"LinkedIn's culture and values continue to be our competitive advantage, especially as we come off a record year where our talented team came together to transform how 1 billion people use LinkedIn to learn, sell, and get hired," Leverich said in an emailed statement. "And while we're adapting the way we work to meet new opportunities, our number one priority is always our talent."
The golden days of growth
Some LinkedIn workers like to reminisce about what one engineer called the "golden days."
After the professional network was acquired by Microsoft in 2016, its annual revenue growth was in the double digits. Some of that growth coincided with the pandemic, when many of LinkedIn's most engaged users were stuck at home, on their laptops, and looking for a new job.
For employees, benefits were abundant and included uncapped food for staff and their guests, a $75 morale budget per employee each quarter, a generous reward system, and a bonus day a month to recharge.
"When I joined one of my mentors said, 'Welcome to your early retirement job,'" a current employee who has been at the company for several years, told Business Insider.
"We were never trying to build out the newest tech or catch the latest trend and as a result, working there meant you weren't trying to accomplish things. If you were, you'd be trying to join Google or Apple," this person said.
Tightening up
The "golden days" officially came to an end in early 2023, some workers said, and culminated in layoffs by year-end.
Last February, engineering managers were instructed to place about 10% of their reports on performance-improvement plans, called "PIP" for short, nine of the current and former employees Insider spoke to said. PIPs have become increasingly common at the major tech firms and can be a precursor for being let go.
Leverich said the company never gave managers a mandate to put a certain percentage of employees on a PIP. The spokesperson declined to comment on whether the number of employees placed on PIPs has increased over the last year.
LinkedIn rates its workers on a scale of one to five, seven workers told BI. A five rating means the worker is exceeding expectations, while a one or a two is an opportunity for a manager to put the individual on a PIP, they said.
Before 2023, workers could get a "soft three" if they had a good relationship with their boss, a former engineering manager said.
Now those workers are receiving one and two ratings, two former managers said.
"We were told to find people to put on PIP," a former engineering manager said. "I had to find two people on my team to put on a two rating. Nobody was a two but we had to force put somebody on a two."
A current engineering manager added that the goalposts for performance reviews had shifted. "In this new environment over the last year, three is scarier than it was before because now the threat of PIPs is viable," he added.
The shift echoes changes at Microsoft, LinkedIn's parent company. In 2023, Microsoft introduced a new employee-rating system only visible to managers, BI first reported. Managers were also told to limit the number of workers hitting the top rating. At the time, a Microsoft spokesperson said there were no requirements for managers to give employees a lower ranking.
Four LinkedIn workers said that a few months after the company began putting more people on PIPs, LinkedIn senior vice president of engineering Mohak Shroff told staff in an all-hands meeting that LinkedIn planned to change its engineering culture to become more "scrappy" and embody the mantra of "move fast and break things."
"Being 'scrappy' became an internal joke," one engineer said.
Perks were also scaled back. The company had introduced "lift-up days" during the pandemic, one Friday a month where no meetings were held and staff could choose how they wanted to spend the day. Some workers said staff could spend the day pursuing leisure activities. The perk is no longer available today, four people told BI.
LinkedIn's revenue growth was also decelerating. In the 2022 fiscal year, LinkedIn's revenue had climbed 34% from the previous year. That fell to 10% year-over-year growth in the fiscal year for 2023. For its first quarter 2024 earnings, the company said it anticipates revenue growth in the "mid-single digits."
A sprint to release AI products
Shroff's declaration that LinkedIn's culture should become more scrappy coincided with an increased focus on AI across the tech industry, as the launch of ChatGPT kicked off an AI arms race.
The company began pushing hard to roll out AI products quickly, six workers said.
"Everyone I've talked to that has worked on it [AI] is being way overworked and all burned out because it's being pushed so heavily," one current engineer said.
LinkedIn rolled out an AI-powered "Coaching Experience" in October 2023, along with a tool to help recruiters find candidates faster.
The reasoning behind some company decisions on AI is not always clear to the rank and file, the engineer added, with workers joking that decisions are "based on vibes."
"The culture shifted without question in the last year or so," an engineer said. "We're not at Amazon, Google, or an AI startup trying to solve the most hard-hitting, high-velocity technical challenges in the world — it's LinkedIn. That was always fine because we had one of the least evil technical products, we connect people."
LinkedIn spokesperson Leverich said the company's new AI products "all ladder up to our vision of creating economic opportunity for every member of the global workforce."
Tensions spilled into all-hands spat with CEO
Kelly Sullivan/Getty Images for LinkedIn
LinkedIn's pivot to a "scrappy" engineering culture coincided with a downward trend in employee morale, seven people told BI.
Some pointed to the company's quarterly employee survey, which is shared on a team-by-team basis.
"The survey showed people didn't understand the vision of LinkedIn and they weren't excited to come into work anymore," one worker present for internal discussions on the survey said, commenting on the most recent autumn poll.
The frustration spilled into the company's September all-hands, held by CEO Ryan Roslansky, shortly before hundreds of staff got cut.
During Roslansky's Q&A, one employee claimed publicly that he'd faced retaliation and discrimination by a manager, and complained that HR hadn't responded, according to a transcript of the meeting seen by BI. Roslanksy responded and suggested the worker discuss the issue one-on-one, people who attended the Q&A said.
"That all-hands meeting made people even more nervous," a former worker said.
Some 668 employees went on to lose their jobs in the October layoffs. Adding salt to the wound, a list of around 500 people impacted was leaked to the workplace-discussion app Blind.
"The layoffs have definitely had a chilling effect," one worker said. "It's made people realize that the company has higher standards of accountability. I think people had become used to a company that was incredibly permissive of a lower work ethic."
Some workers think the debloating was overdue
Some workers see the layoffs and increased focus on performance as a much-needed course correction.
"There were a lot of people that joined during the pandemic, but we remained relatively stagnant in terms of growth," an engineer said. "People would work for months on a new feature and it would get zero adoption."
And LinkedIn isn't alone in pushing for growth and efficiency.
After three years of pandemic growth, most of the major US tech firms laid off staff and were rewarded by investors for focusing on efficiency over expansion.
"The broadly defined tech industry mistakenly assumed that the growth they saw in 2021 could persist, but it was always unlikely to occur," Madison and Hall analyst Brian Wieser told BI.
"Once reality set in — amplified by the realization of higher interest rates and overstated concerns about an economic downturn, which of course never happened — they started reducing spending on many activities."
Microsoft, LinkedIn's parent company, has seen its share price rise 61.2% in the last year.
"We'd become bloated and a lot of people were spinning their wheels for a time," the current employee said. "We needed a reprioritization."
Are you a current or former LinkedIn employee? Got a tip?
Contact Jyoti Mann at jmann@insider.com or via direct message on X @jyoti_mann1. Contact Grace Kay at gkay@insider.com. Reach out using a non-work device.
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