The Scoop: Big Tech Joins the Tech Cooldown
Also: happens when a well-funded tech company threatens to sue over a LinkedIn post?
👋 Hi, this is Gergely with a bonus, free issue of the Pragmatic Engineer Newsletter. If you’re not a full subscriber yet, you missed the issues on Profit centers vs cost centers in tech, the one on Measuring software engineering productivity - and the one on Dotcom bust vibes across the industry. Subscribe to get this newsletter every week 👇
As an update, The Pragmatic Engineer Talent Collective has more than 300 vetted software engineers and engineering leaders, about 80% of them based in the US and EU. If you are hiring for outstanding software engineers – frontend, fullstack, backend, mobile, data – or for engineering leadership talent, apply here to get instant access to these candidates hand-picked by me.
This issue is an excerpt from this week’s subscriber-only The Scoop issue. I wanted to share two pieces from that issue: one on what can happen when a well-funded tech company threatens to sue over a LinkedIn comment.
And - perhaps more importantly - how the hiring market across Big Tech is rapidly cooling down, and what this might mean for anyone hoping to either get into Big Tech, or move jobs within this group. If you’re in this group, it can be a good idea to take action before things slow down even more.
What happens when a well-funded tech company threatens to sue an employee over a LinkedIn post?
As I was browsing LinkedIn yesterday – Wednesday July 13th – a post popped into my feed which grabbed my attention because it was about Bitpanda, the crypto trading startup which laid off about 25% its staff just weeks ago, as covered in The Scoop #16. The post was this:
I had to stop scrolling. Bitpanda threatening to sue a former employee because of a spicy LinkedIn post; is this a joke?
I checked the referenced post from two weeks ago, which was a typical rant from someone upset that the company they once worked for and loved, had done layoffs. The post used stronger language than is usual and was just full of emotion. Take this section:
“I used to love Bitpanda back in the days when I worked there but oh how the mighty fall. (...) I am sat here, shaking with anger for the employees and I don't even work there anymore! Genuinely shaking with anger. I have to bite my tongue to not tag specific people here but you know who you are and you are complicit in ruining hundreds of peoples' lives.”
The post gathered a few hundred likes, got less than 50 comments and a day later, everyone seemed to have moved on and forgotten about it.
Well, not Bitpanda. The company, in what seems like an attempt to remove all criticism of them on the social network, kicked off legal action that is known as SLAPP.
What is a SLAPP (Strategic lawsuits against public participation)? It’s a larger and more powerful lawsuit either threatening to sue or suing a smaller and financially weaker person or entity whom the plaintiff doesn’t necessarily intend to fight. The goal is to intimidate and exhaust the smaller player – financially, emotionally – so they remove the criticism of the plaintiff, rather than run up a sizeable bill defending themselves in court
SLAPPs have a chilling effect on freedom of speech and are often used as an intimidation tactic. It’s not surprising to see such a tool used by oppressive governments against journalists, but I have not seen a well-funded startup use it, especially not for a LinkedIn post no one cared about anymore.
The odd thing about Bitpanda resorting to such bullying was how the company prides itself as a great employer, and has been voted as the #1 startup to work for in Austria, the company proudly advertising this news. As I understand, in Vienna – where it’s headquartered – it was the most desirable place to work for local software engineers, at least until the recent layoffs.
The risk of issuing a SLAPP is that a company can easily trigger the Streisand effect. The Streisand effect is the phenomenon whereby the more a company tries to hide some information, the more visibility it gets. It’s typical for a company to try and suppress information via a cease-and-desist letter. However, instead of being suppressed, the media gets interested and reports on it far more extensively than on the original information, spreading the story far wider.
Sure enough, after Declan Mulrooney – the former Bitpanda employee – published that he had received a cease-and-desist letter, the Streisand effect kicked in. Given how ridiculous such a lawsuit would be, especially in Austria, where free speech is strongly protected and the LinkedIn post was nothing but a series of opinions, I reshared this threat, and also offered to cover his legal fees, given that this person being threatened with legal action was unemployed. Other tech workers chimed in, offering to start a fundraiser.
At this point, Bitpanda’s Chief Growth Officer reached out to me directly, explaining they had no choice but to pursue the case. She wrote:
“We had to issue the legal letter not because he was expressing his feelings, but because he publicly accused Bitpanda of doing an illegal restructuring. This is an unsubstantiated claim that is not only untrue, but defamatory and damaging to our reputation. (...)
Everyone is free to express their own opinions, being them positive or negative. We all own what we say and do though, with the consequences that come along when we make unsubstantiated, defamatory claims. Otherwise, where do we draw the line?”
I responded, confirming that we’re calling the bluff and ready to go to court over what is clearly a SLAAP. By this point, the employee in question had received interest from Bloomberg and The Financial Times, about covering this SLAAP. I also reached out to Bitpanda’s founder and CEO for comment on why they are threatening to sue over an opinion piece - but never heard back.
A day later, Bitpanda formally withdrew its threat to sue. As the Declan Mulrooney shared in the final update:
“IT IS OVER. Bitpanda has dropped its case against me! We won. 🥳️
Legal bullying loses...again.
Within two hours of reading my response to the lawyers and demanding no further correspondence from them, I was contacted by a a very special face from Bitpanda who graciously told me that all proceedings will end and that it was regretful that this ever happened with which I agree. Of course they know they would never have won this case but now I can breathe more easy and go about my life.
I can not confirm whether this applies to ALL of those who received legal notices but you can refer them to this. If you receive more letters, forward them to me and I will deal with them. If I am free, so are you and I will fight for that. My case is not over until your cases are over. That goes for any case like this in the future from Bitpanda - who watches the Panda? Me. 🧐”
What is the takeaway for founders and CEOs? Be careful about using SLAPPs or cease-and-desist orders to try to remove information from social media. Only do it if you are willing to pursue a case in the glare of media reporting about your lawsuit, and if you have a good reason to. If the reason is petty, such as personally disliking an opinion on the internet, or if the power imbalance is large, like threatening to sue a former employee who is unemployed; then there’s a good chance the media will report it extensively.
Also, be aware of your employer brand. Bitpanda has consciously built a strong employer brand. However, what will future employees think of the firm, in light of the SLAAP? Perhaps that Bitpanda will not hesitate to sue if they share anything negative about the company, even years after leaving the company.
What is the takeaway for employees who are threatened with lawsuits unless they remove information they’ve posted? It’s that complying with a demand which comes from a much more powerful entity is not the only option.
If the request is outrageous because there’s a power imbalance, then there’s a chance you can rally the support from the media, and, ultimately, embarrass the company into dropping the legal threat. You can do what Declan Mulrooney did and share publicly that you’ve been issued with a legal threat, and ask for support in spreading the news.
In this case, Bitpanda might have messed with the wrong person. Declan Mulrooney is not a software engineer: he is a communications manager. His original post was written in a way that resonated with many people: David bullied around by Goliath for no good reason. Also, not having a job at the moment, Declan had little to lose, but lots to gain by calling out the company. As a note, Declan is open to work if your company is hiring someone in marketing or creative communications.
You can also consider launching a crowdfunding campaign to cover legal fees. Such a campaign can achieve multiple things at the same time: spread more awareness and gather financial support from people who dislike companies abusing their power.
Reaching out directly to the media is also an option, although it’s more powerful if you gather enough attention online that reporters reach out directly to you. This is because the journalists get far more pitches than they can process, so sending a direct pitch might get lost in the crowd.
If you fail to gather enough media attention or community support, you’ll have to decide if it’s worth your financial and mental wellbeing to go on a long and tiring fight against the bigger entity. However, if you don’t try to rally support, you’ll never know.
To close off: I have heard claims that Bitpanda has issued similar cease-and-desist letters to other employees. I expect the company has withdrawn these by now. But if this is not the case, feel free to contact Declan or myself.
Big Tech bracing for an economic slowdown
Apple is likely to curb hiring efforts from the fall, and Netflix has already done so. Meta slowed down hiring. Joining this group are Google, Microsoft, Oracle, VMWare. Here’s an overview of how much changed in just five months:
Where in Big Tech are there no hiring freezes? The two notable companies where hiring is continuing as normal is Amazon. Apple might be slowing down hiring from September, though I confirmed this to be the case in only a few organizations. Still, it would be a surprise if, in the face of high inflation and economic uncertainty, Apple does not take a more conservative view with hiring, across the board.
This past week, Google announced a hiring slowdown, Oracle a plan to cut back on costs – and is laying off heavily – Microsoft did make cuts, and Facebook employees are worried the company will push up attrition. I covered more on all of these topics in The Scoop.
We’re now in the situation where many Big Tech companies have slowed down hiring: Google, Facebook, Microsoft, Twitter, Netflix, and Tesla are in this group, and Apple will likely join them in September. The only major company where hiring is as before is Amazon.
If you are planning to move into Big Tech or switch jobs, now might be the time to make that move. I would not be surprised if all of Big Tech slows hiring by the end of the year, out of caution. This will mean more competition for fewer openings, and likely only jobs for more experienced software engineers, engineering leaders and other tech professionals.
To read more details about the hiring slowdowns and freezes, and what employees inside Facebook and Google have shared, read this week’s The Scoop issue.