Two Respected Pasadena Tech Companies Explain Why They Aren’t Laying Off Like Meta and Amazon

In the last decade, the tech industry became an undisputed economic driver with giants including Apple, Amazon and Microsoft closing the decade as the world’s first trillion-dollar companies. 

These companies grew even larger during the COVID-19 pandemic. The sector reported soaring profits as consumers upgraded their devices and sought cloud storage during pandemic lockdowns.

But suddenly tech companies are facing unprecedented challenges. 

Even before last week’s meltdown of Silicon Valley Bank, a major U.S. bank catering to the tech sector, Meta, Google, Microsoft, Amazon and a host of smaller tech outfits announced mass layoffs amid global economic downturn and recessionary fears. 

Paul Hershenson, co-founder of Art+Logic based in Pasadena, believes several factors are behind the layoffs this year.

“The pandemic caused a massive disruption to the supply chains. There was the government stimulus pouring money into the economy, there was this dramatic intermediate shift from in-office work to remote work, a bunch of large tech companies that made an enormous amount of money because of how the pandemic played out, leading to lots of hiring and then as the pandemic started to abate and the economy started opening and inflation came into play and interest rates started to rise, especially the venture environment for startups.”

While several companies announced layoffs, Art+Logic, one of the oldest and longest-operating remote software companies in the United States, did not reduce their employees over the last two years.  

Because Art+Logic was operating remotely even before the pandemic, Hershenson said it was easier for them to retain employees and prevent layoffs. 

Art+Logic started as a remote software company in 1990. While it has two offices on Lake Avenue, 95% of its employees work remotely over the last 32 years.  

“The reason why we got the office in the first place back in the 1990s when we started was because it was so unusual to be a remote company that it was difficult to persuade clients that we were a real company and impossible to persuade banks that we were a real company,” said Hershenson. “One of the benefits of the pandemic was that the world really caught up to us in terms of remote work, and at this point, nobody blinks an eye when they find out that there’s a tech company that doesn’t have an office anymore.”

“We were prepared, so we didn’t have to make any adjustments to operate remotely,” said Hershenson. “We were already operating remotely. Our office overhead is very low compared to companies with actual offices, so you know we didn’t have to worry about cutting costs in that way.”

Hershenson added the real impact for Art+Logic was secondary as clients had to curtail their spending which resulted in their reduced revenue. 

While going remote has worked for Art+Logic, Hershenson recognized this is not applicable for other companies. “Remote work environments are context dependent,” he said. “And it’s really something that a business has to consider for their own purposes.”

Hershenson has this to say amid current challenges being faced by tech companies to date. 

“I am confident that in time things will settle down. And I expect employment to remain very high, and the people who have been laid off will find good jobs. And that the companies that can weather the storm, keep a calm hand on the rudder that in time, we’re all going to settle down and things are gonna be just fine.”

Harrison Tang, CEO of Pasadena-based people search website Spokeo, has no plans of laying off employees — but of doing the precise opposite.

Tang remains buoyant in spite of his brush with the SVB Bank crisis. Spokeo came out unscathed.

“We have been actually growing via our own cash flow,” said Tang. “We are not doing any layoffs. In fact, we’re trying to leverage this opportunity to grow our team.” 

“It’s actually in some ways, an amazing opportunity to actually invest in our companies, in our teams, in our products, so that we can actually leverage this opportunity to gain more market share and actually win against the competition,” he continued. 

Tang said Spokeo just recently hired new employees.

Just like Hershenson, Tang’s company also shifted to remote work during the early stages of the pandemic. Eventually, they adopted flexible work arrangements, which gives people the option to work either at the office or at home anytime. 

“Unlike other companies who coerce their team members to come back to the office, we’re very open minded. We say: ‘Hey, if you want to come, it’s here. If you don’t want to come. It’s fine’.”

While remote work worked for his company, Tang is unsure this would work for others as well. 

He believes the future of work should be “personalized.”

“I don’t think we should set a blanket rule, right? Whether everyone has to come back to the office three days a week, or everyone who cannot come to the office has to work from home.”

He continued: “I think we should focus on personalization. And I think to get there, you need to build up infrastructures, governance structures and all that stuff. You have to ask more, and that potentially requires more personnel.”

For more information about Art+Logic visit: https://artandlogic.com.

More information about Spokeo can be found at: https://www.spokeo.com/about.