The News: In a letter written by NVIDIA CEO Jensen Huang and shared by NVIDIA Human Resources Chief, Shelly Cerio, the company has boldly committed to zero layoffs and a company wide raise for all employees while eliminating traditional annual reviews. The letter can be found here.
Analyst Take: We are wading in unfamiliar waters and as the Covid-19 pandemic continues to limit the U.S. and many economies around the world, companies are having to make bold decisions as to how to handle the uncertainties of the next few quarters (at least). We heard from Salesforce CEO Marc Benioff early on, asking the tech community to commit to no layoffs, and this has been followed up by others such as Microsoft’s Satya Nadella and Cisco’s Chuck Robbins making similar commitments. However, up until this point, we haven’t heard about any companies doing the opposite and actually offering more money to the workforce while promising to let no employees go.
Showing true empathy to the employees, Huang shared in his letter his thinking:
In response to the falling economy, we announced that we are pulling in our annual review process. Immediately I received questions about whether we are also planning a layoff. NO — precisely the opposite. We are accelerating your raise to put some extra money in your hands. we can put tens of millions more dollars in the hands of our families in the coming months.
In essence, Huang sees this as a stimulus for his significant workforce of more than 13,700 employees worldwide. Huang wasn’t doing it only for charity though. It was apparent to me in the letter that he also understands the implications of this pandemic and the role that NVIDIA will have to play.
Huang Showed That He Truly Gets it — NVIDIA Will Be More Important
In the open letter, Huang not only pointed to the company’s greater commitment, but he eloquently pointed to the importance that the company will play during and after the Covid-19 battle is won.
There is no layoff. The work we do in graphics, science, AI, and robotics is more vital to the future than ever.
Huang points out that AI, ML, automation, PCs and so many of the technologies that NVIDIA is deeply focused on are not only important, but growing in importance as people will have different work requirements in the wake of the pandemic. Additionally companies will be looking to automation and AI to provide greater safety and eliminate unnecessary risk. The company is also deeply entrenched in supercomputing that can help identify therapeutics and identify patterns and trends that will help healthcare workers provide new standards of care or better plan for surges–These are just a few ways supercomputing can and will be deployed.
Overall Impressions of NVIDIA’s Decision to Keep All Employees and Increase Pay Packets
This was a big move by Jensen Huang and I believe it will not only enrich the culture, but pay dividends as calm, focused employees will drive greater productivity and this type of action will resonate with prospective talent in the long run that may be looking for a new home. In the valley, talent is a war in its own right, so being a more attractive place to land won’t hurt the company.
With times being so uncertain, I feel that the tech community, which should hang in well compared to many industries, has the capacity to take these types of actions. While I look forward to turning more attention toward new products, services, and innovation from the tech industry, stories like these deserve greater attention. Hence this research note…
Futurum Research provides industry research and analysis. These columns are for educational purposes only and should not be considered in any way investment advice.