Some Silicon Valley Companies Continue to Pay Service Staff, Others Lay Them Off

Seven months into the pandemic, Silicon Valley offices remain mostly empty. Some are at quarter capacity. Most are still totally shut down.

While many white-collar employees for these companies are continuing to work from home, that’s not the case for the janitors, bus drivers, cafeteria workers and security guards, most of whom are contractors. Even white-collar contractors at Silicon Valley firms have reported getting different treatment from full-time employees during the pandemic.

Some companies like Facebook and Alphabet are still paying service workers and have vowed to continue as long as the headquarters are shut. Other companies are deciding to lay them off. With the pandemic, there are few places right now to find new service work.

Recalculating the Benefit of Ancillary Jobs

The ancillary service jobs that are imperiled right now both at company headquarters and in the surrounding area have long been considered a major benefit of having businesses like Facebook, Yahoo and Alphabet in the community. Even if the programming jobs were relatively few and often brought in workers from around the country or overseas, locals would have a shot at cleaning the offices, shuttling around employees, working in cafeterias or at nearby restaurants.

Companies that make their money through the internet, like Alphabet (the parent company of Google) and Facebook, don’t create nearly as many jobs at their firms compared to manufacturing companies.

For example, Facebook and Alphabet together have around 170,000 employees. That’s about the same as General Motors, which employs roughly 164,000. But while the employee numbers are similar, the valuations are vastly different. Right now, at the end of September, the market capitalization of Facebook and Alphabet together is $1.727 trillion. That’s 41 times as much as General Motors is worth on the market.

Even though these wealthy corporations don’t employ people like manufacturing companies, it has been argued that they are beneficial because of the ancillary jobs.

In 2012, UC Berkeley economist Enrico Moretti said each tech job creates five service jobs. True or not, this argument helped get tax breaks for companies like Twitter and Google to grow their presence in the Bay Area. But with offices shut down and people working from home, the pandemic has upended that calculus.

A Surprising Lifeline

When I spoke with Liliana Morales, who used to work as a prep chef at Facebook, she was having a hard time finding a quiet spot in her home. The bathroom is usually a good bet, but even it can be breached. During our interview, her youngest child busted in several times.

Morales’s three kids were all “at school,” when we spoke. That means three separate Zoom calls in the same common space of their small home. It’s in East Palo Alto, four blocks from the Facebook headquarters. When the pandemic happened, Morales worried she’d lose her job. But instead, her supervisor said they would keep getting paid even though they were not allowed to come in to work.

“I was thankful because I didn’t expect they would do the right thing,” Morales said.

Some Silicon Valley companies like Facebook and Alphabet are continuing to pay contractors. Both those companies have been doing well during the pandemic, hiring thousands of new employees. Even so, they could have easily decided to lay off service workers, most of which are employed through third-party subcontractors.

Maria Noel Fernandez is a campaign director with the labor group Silicon Valley Rising. She says service staff working through contractors are only getting treated well now because workers and the labor movement brought attention to Silicon Valley’s two-tier class system.

“Had these workers not been organizing in the streets and in boardrooms over the last several years, I don’t know we’d be in the same place," Fernandez said.

Not all Silicon Valley companies are standing by their contract workers, though.

A subcontractor working for Lyft laid off 63 janitors via text messages in September; subcontractors for Tesla laid off 280 bus drivers and janitors; subcontractors for Verizon-owned Yahoo laid off 120 cafeteria workers. With the pandemic, these workers are struggling to find replacement employment.

Searching For Jobs That Don’t Exist

Every workday for the last 12 years, Agustina Sanchez woke up early and headed to the cafeteria at Yahoo. She worked the front of the house, and loved the job. She liked explaining the menu, taking special orders. She says the cafeteria felt like it was her home.

Then, early in September, she got a message from the subcontractor who employed her. It said that she and her colleagues were getting laid off.

Sanchez said she got a bunch of texts from the Yahoo employees she used to serve. They’re upset and offering to try and help her out, but there is not much they can do. The office is going to be shut for the foreseeable future, and they are employees who can work from home.

Yahoo did not respond to a request for comment. There is currently no official count of how many contract workers in Silicon Valley have lost their jobs in the pandemic and how many are continuing to be paid. That number would be difficult to tally, as there are thousands of different subcontracting firms in Silicon Valley and the Bay Area.

Sanchez said this all feels like a nightmare, especially in the Bay Area where some people get more and more and more, while so many are struggling just to survive. Sanchez said she’s already looking for a new job, but now no one is hiring since the pandemic.

While Sanchez looks for another job, she has been working with her church to deliver food to other service workers in her neighborhood who have contracted the coronavirus and are quarantining. It’s hard for her right now, she said, but she’s grateful she at least has her health.

Resources

Here is a list of KQED guides to navigating financial hardship during the pandemic:

• How to File for Unemployment
• Stressed About Paying Rent? Check Here First
• How to Apply for California's Disaster Relief Assistance Fund for Undocumented Immigrants
• Where to Find Free Meals and Food Services
• How to Navigate Bills Right Now