Silicon Valley has long considered itself an egalitarian utopia — a place where rebelling against hierarchy is encouraged and good ideas are supposed to bubble to the top, regardless of who has them. The reality has always been more complicated.
For years, a massive shadow army of contractors and temp employees has fueled not only the growth of some of the sector’s biggest enterprises but also a two-tiered workforce. Staff employees get cushy pay and benefits, while contractors go without perks, job security and status.
But now a new class divide is emerging inside Big Tech — one that goes beyond contractors versus employees. In this latest iteration, the fault line runs between those who are at the very top of the artificial intelligence hierarchy and everyone else. AI was supposed to flatten organizations. Instead, it risks creating only more deeply entrenched power structures.
Nowhere is that split more apparent than at Meta Platforms Inc., where those at the helm of the next technological revolution have been showered with eye-popping salaries and seemingly endless resources. Employees outside that tight circle — even those adopting AI tools — are viewed as bit players, expected to facilitate the transformation while increasingly in danger of being made obsolete by it. Meta Chief Executive Officer Mark Zuckerberg has acknowledged as much; last year on Joe Rogan’s podcast he said AI could soon do the work of some mid-level engineers.
You’ve heard of the K-shaped economy afflicting consumers. Call this the rise of the K-shaped company. Just like the broader economic landscape, Big Tech is bifurcating with a widening gap between the haves and have-nots. Those who are part of the upper leg of the “K” are the AI elite, ascendant and thriving as they expand their paychecks and prestige. Those on the lower leg are treated as disposable — their futures more uncertain, their power waning. “It has set the norm that exponential disparity within a workforce is okay,” says Laszlo Bock, a CEO coach and Google's one-time human resources chief.
It is, of course, all relative. Those on the lowest rung in larger society have it way worse than pretty much anyone working anywhere in the tech sector. But just as widening inequality has fueled anger and backlash outside the workplace, warning signs are flashing at Meta that companies face the same risk — that the technological revolution they're staking their futures on could also ignite an open workforce rebellion. Meta employees are signing petitions, openly criticizing management and, in the UK, even attempting to form a union. After years of executives reclaiming their authority in the post-pandemic era, Bock told me this might be “green shoots” in terms of power swinging back to employees.
Inside Meta, the contrast between the haves and have-nots is stark. Top AI executives and researchers are courted with nine-figure compensation packages. Some have reportedly been offered $500,000 in additional equity simply to stay, even as mass layoffs have loomed over much of the company. As one employee told Wired, only those with the highest pay and the closest ties to AI development are thriving. Another put it more bluntly: "The only people who are not unhappy are, literally, executives."
Some of the have-nots, meanwhile, have been forced to work on a team that’s been described as being drafted into soul-crushing gulag. Headcounts have continuously been slashed and median compensation cut even as profits grow. Workers’ keystrokes and mouse clicks have been tracked to train the company’s AI agents. (The company stopped the program only after experiencing the kind of security breach employees had warned about.) Meta Chief Technology Officer Andrew Bosworth summed up management’s general attitude: "You can leave, or disagree and commit."
The result is what some have described as a crisis of morale so dire that during the latest round of impending cuts, some were hoping to get laid off from a place once considered among corporate America’s most coveted employers. “They are confusing the Silicon Valley mantra of failing fast with reckless execution,” Harvard Business School professor Amy Edmondson told me. “This isn’t the noble messiness of AI innovation but a breakdown of basic management.”
Meta's leaders concede they have a problem. Executives have called the rollout of the company's new AI organization "atrocious" and acknowledged the workplace has become "brutal,” according to Wired. Zuckerberg has said the company made mistakes. Employees have been promised more attentive managers, more stability, no more mass layoffs this year, bigger team budgets and improved “micro” kitchens. An unpopular hot-desking initiative is being scaled back.
None of this is happening because management suddenly discovered empathy; it's happening because treating employees like replaceable cogs instead of partners turned out to be bad for business. Zuckerberg recently acknowledged that Meta's AI agent development has not accelerated as quickly as executives expected, Reuters reported. And as my Bloomberg Opinion colleague Parmy Olson noted this week, the company’s new Muse Spark AI system hasn’t matched the top benchmarks of frontier models from OpenAI and Anthropic PBC. It has also struggled at building open-source AI models.
In a K-shaped economy, distrust, fear and cynicism festers among those at the bottom. The same goes for a K-shaped company. When Zuckerberg announced a recent hackathon to boost morale, Wired reported that employees balked. They had too many other responsibilities and too little time in the wake of the recent layoffs. Others said they didn’t feel they could commit time to anything that did not go toward their performance metrics. “ I’m not sure that this company supports a hackathon culture anymore,” one employee posted internally. “I don’t believe there is sufficient feeling of safety to spend time on hackathon innovations,” wrote another.
The irony is that Meta already knows what went wrong. In a company memo, Bosworth wrote, “We've undermined the trust you have that your specific expertise and contribution will be valued, that you will grow and advance your career, and that this will be a place where you can actually have an impact.” That is what happens when a company creates both an aristocracy and an underclass inside its own workforce — an imbalance it will take far more than better snacks in the micro kitchens to fix.
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