Facebook. Apple. Amazon. Netflix. Google.
The five leading tech companies that comprise the popular acronym, FAANG. Beyond the economic scope of each individual company, FAANG collectively is an ecosystem that not only dominates the consumer tech experience, but also a large portion of the employment and career opportunities for developers, marketers, lawyers, and other domains in technology. Due to their high visibility and current cache, job seekers may unwittingly ignore excellent opportunities in more mainstay tech companies such as IBM, Microsoft, Siemens, or smaller, less consumer-visible companies.
A career-seeker should ask themselves: Are FAANG companies really worth the energy and buzz that they receive? Since the attraction of employment at FAANG companies is fairly well known (high compensation, well-defined career paths, direct impact on consumer-facing products, opportunities to contribute to open-source projects, a certain status among the development community, etc.), it is also important to examine the potential drawbacks of employment with one of the big five. After all, the brand name does not guarantee that the company is the right fit for you as an employee.
Let’s examine five notable reasons why a FAANG company may not be right for you.
A note: I want to acknowledge that this list is subjective and does not represent 100% of experiences in the industry. These bullets may not be true for all developers at FAANG companies.
1) Projects at FAANG companies may require less creative engagement
Compared to a smaller or start-up company, the day-to-day operations at a FAANG company are far more solidified. Generally, these companies are focused on managing a small window of improvement upon their pre-established systems and functions. The larger the organization, the more specialized each position is within its structure, meaning that the average worker has a limited and prescriptive scope of involvement.
The problems that the average programmer is tasked with solving may not, therefore, require much creative engagement. The problem-solving skills needed for these projects are aimed less at creative or ethical motivations, but at maintaining a particular notion of functionality.
Due to the nature of their revenue systems, FAANG companies focus heavily on advertising. Most notably, Facebook, Netflix, Apple, and Google operate through the so-called, “attention merchant business model”, a term coined by writer and lawyer Tim Wu to describe industries that accumulate revenue by capturing and reselling the attention of consumers. Similarly, Amazon continues to bring in revenue by hegemonizing the retail e-commerce market. In 2018, eMarketer theorized that by 2020 Amazon would account for 7.0% of total digital ad spending in the US. Advertising is the hook upon which these companies hang.
As a result, most developers employed by FAANG companies are tasked with problems relating to advertising for the goal of profit management. Many projects are aimed largely at harvesting consumer attention by developing strategies to show advertisements to more people. In fact, in a recent posting on Facebook Careers for the position of Software Engineer, the sole responsibilities listed are to “design and implement . . . software components for serving ads” and to “build the next generation of our advertising products”.
Monetization through advertising is an objective that certainly does not interest every software developer and may, in fact, conflict with personal values. Many people yearn for employment that addresses other interesting business problems or socially minded goals.
This is not to suggest that big companies are necessarily less conscious of social issues; however, it may be a challenge to find positions within FAANG companies that diverge from their fundamental business models. Advertising may not keep your interest long-term, and it may not satisfy your call for ethically oriented projects.
2) Corporate culture can be a challenge to certain types of people
Every company possesses its own corporate culture that characterizes and shapes the attitudes and strategies of the company as a whole. Corporate culture has a profound effect on an employee’s experience in their work environment. While each of the FAANG companies possesses its own distinctive culture, they all share common traits that arise simply from their size and scope, and, with the exception of Apple, all of them are fairly young as far as corporations go.
One of the primary complaints from former FAANG employees is a frustration with the bureaucracy needed to manage such a large-scale corporate system. Layers of impersonal management, oversight, internal politics, and poor work/life balance are common traits in enterprises of this size. Similarly, professional development can be hampered by systematic structures for benefits, pay raises, and promotions.
In a large management system, excellent work can easily become invisible or disregarded because of multi-layered systems of management ambitions, even with the best of intentions at all levels. For someone who values a more direct relationship between their delivery and rewards, or who desires a voice in decision-making, a large enterprise may be a frustration hard to overcome.
3) Harder to stand out from the crowd
FAANG companies attract hundreds of thousands of applicants who all pursue the same, coveted positions. More competition makes it harder to stand out. FAANG companies are to the tech world what Ivy league schools are to college applicants: while they might carry a certain status, the application process can be challenging to overcome due to demand and the high levels of performance. While some thrive in this kind of competitive environment, others need a more collaborative and supportive one to thrive. It is wise to assess where you fall in this spectrum.
These highly competitive and high-performance environments, by their very nature, raise the bar on entry-level positions. They want the best of the best, and they are flooded with applications, so they can tend to stick to a list of requirements and dismiss an applicant who does not have proof of education or experience, even if they are capable and trained. Getting a job with a FAANG company can feel like a rigged system that favors those with specific qualifications or titles.
Even once you obtain employment with a FAANG company, that same competitive culture is likely to continue because of the size and business model of a large organization. These companies need to keep up with changing demands and pressures, and as a result, they often want people who can land and immediately deliver with minimal attention to their development.
If you are looking to stand out from the crowd, or you don’t want to spend your energy on a competitive battle, it may be worth considering a smaller company, which can offer a more holistic flexibility or a more seasoned company that has developed a more inclusive approach to bringing in and raising up talent over time.
4) Cost of living and relocation are growing
Many software developers seek positions with FAANG companies largely for compensation in areas like Seattle and the Silicon Valley. While the $100K+ paycheck and signing bonus may seem like a good reason to relocate to these tech capitals, many employees fail to consider the total, longer-term cost of living in these parts of the world. In Silicon Valley and the greater Seattle area, rent prices are climbing to some of the highest in the US. The pay that FAANG companies promise actually makes these high rates quite average in comparison.
A college graduate might be able to weather the costs by sharing an apartment with multiple roommates while climbing the compensation ladder to higher levels. But what if the climb is slower than planned or hoped for? If you can’t afford living in the urban center near employment, are you willing to commute significant distances?
According to the INRIX Global Traffic Scorecard for the US, Seattle ranks 6th in the annual time spent in traffic, coming to 138 hours annually, while commuters in the Bay Area lose nearly 5 days a year sitting in traffic. This boom in tech industries has led to other challenges that similarly affect quality of life, such as gentrification, overpopulated schools, housing crises, and increased cost of food.
Yes, a FAANG company can offer you seemingly fair compensation, but that number should be considered relative to the overall cost – both in dollars and hours – of the places where you would be living. Don’t be distracted by the digits!
5) FAANG companies may not be as reliable as they seem
One of the common misconceptions about large businesses is that employment will be more reliable than a smaller company. There is some truth here, but it is worth noting that company size does not guarantee employment stability. FAANG companies will not necessarily outlast smaller tech companies; no industry is immune to collapse or reconfiguration. For several years, investors and economists have expressed concerns about the longevity of FAANG companies for two main reasons. Firstly, most industries that become monopolized are vulnerable to a bursting economic bubble. Secondly, FAANG companies are vulnerable to public opinion.
Let’s break down concern #1: the potential FAANG bubble.
Simply put, the tech bubble is an economic term that refers to an unsustainable, unmanageable market rise that eventually bursts. The Dot-com bubble occurred in the early 2000s due to “fad-based investing” in Internet companies and sent many tech markets into decline. Many economists and investors theorize and debate that we may be heading down a similar path with FAANG companies.
The threat of decline is ever-looming in a capitalistic system. A FAANG bubble is not inevitable, but even these massive companies can succumb to faltering or collapses. Remember: these are for-profit enterprises. When macroeconomic conditions change, they adjust to maximize profit — if that means laying off hundreds or thousands of employees, they will. If you have doubts, just look to the history of predecessors in the industry, such as IBM, HP, Intel, and Microsoft. The size of FAANG companies alone does not guarantee long-term employment.
Concern #2: vulnerable to public opinion.
Economists, tech professionals, journalists, and the like have continually articulated concerns about the effect of social and cultural perspectives on the longevity of these large tech companies. A company can only thrive when the public continues to support it, and the increasing social anxieties surrounding issues such as data privacy, monopolies, and environmentalism have led to a depreciated public opinion about FAANG companies.
Facebook and Apple have been scrutinized for issues relating to facial recognition, privacy violations, and the usage of personal data. Google and Amazon have suffered continued attacks and lost significant lawsuits relating to accusations of data mining and data stalking.
Consequently, a large number of users and advertisers are abandoning these companies, and smaller companies around the globe are responding to these social concerns by developing so-called “safer platforms”. Though there are no proven indications that the FAANG companies have suffered economically from these accusations, it is clear that public opinion can shift away from industries thought to be impenetrable.
The issue of environmental sustainability has also shifted public opinion about these big five companies, most notably, Amazon, which was ranked as one of the worst companies for global warming efforts by non-profit ClimateCounts. Consumers and users are increasingly aware of their effect on climate future, and as more studies accuse these monopolizing companies of large-scale environmental degradation, more and more users seek alternative sources. Large corporations must yield to the voices and values of their users, and FAANG companies will continue to suffer blows as more scandals and accusations damage public opinion.
What should you take from this?
The perception that FAANG companies are inherently more reliable than smaller companies is not necessarily the case. These companies are not impenetrable, and they are susceptible to change, decline, poor management, or the changing winds of public opinion. FAANG companies do offer a certain form of stability that a smaller start-up cannot, but that should not lead you to the conclusion that FAANG companies are the better option solely due to their size. No company is too big to fail.
Wrap up
FAANG companies are the current gold rush. They may be the right choice for you if your personality, your risk/reward tolerance, your competitive spirit, your perseverance, and your fundamental skills are a good match. But they aren’t the only companies to employ your abilities in a satisfying, well-compensated career that has a long-term future. A smaller company, a start-up company, or even a job with a non-engineering company may offer you the freedom, flexibility, and corporate culture that will make you not only a more successful worker but also a more fulfilled one as well.
The skills you have and the skills you are learning are vital to the sustenance of any company. The question shouldn’t be, “how do I get a job as a developer?”. Rather, ask yourself, “what kind of job and life do I want to have as an employee?”.
Latest comments (1)
Thank you for your comment. I agree that this is a major deterrent for many developers, and it is a very relevant concern to consider when thinking about employment. Certainly smaller companies are not necessarily more ethical, but it's important to consider the track records of larger monopolies, especially when there is so much accessible information about the issues of FAANG companies.