No More Rock Climbing Walls? Silicon Valley’s Insane Perks Are Unsustainable

Employee perks like climbing walls, vacation money and on-site barbers have been a signature part of Silicon Valley’s start-up culture. But with venture capital funding drying up and cash-strapped businesses eager to get liabilities off the books, some companies have had to face the unthinkable: limiting the free-for-all.

In March, file-sharing site Dropbox told employees it was nixing its free laundry service and shuttle bus to San Francisco, according to the San Francisco Chronicle. Once-unlimited guests at the office’s free dinner hour and open-bar Fridays were capped at five per month.

In a staff email, the company said it was spending at least $25,000 per person on perks each year. That’s about $38 million annually, according to the Chronicle’s estimate, based on the Dropbox’s roughly 1,500-person headcount.

Meanwhile, when a 5-foot chrome statue of Dropbox’s panda mascot appeared in the company’s lobby last month, it was accompanied by a note apologizing for the hubris of its commission.

“It wasn’t the right call,” the placard read. “While it’s OK for us to have nice things, it’s important to remember to ask ourselves, ‘would I spend my own money this way?'”

Quartz reached out to Dropbox for comment and will update this post if it responds.

Beyond the financial implications of lavish expenditures, bragging about over-the-top perks has also lost its luster.

Evernote discontinued its fabled home cleaning service years ago, and spokesperson Greg Chiemingo told Quartz that the company’s perks now are “nothing out of the ordinary.”

The long-term value of employee perks is up for debate, but taking them away is still a near-certain hit to morale, even for potential employees. The dissatisfaction of losing privileges is greater than never having had them in the first place, entrepreneur Dan Ruch recently wrote in Fast Company.

Ruch, CEO of the business travel site Rocketrip, wrote that many companies approached perks incorrectly from the outset, focusing on universal entitlements with questionable returns, like free gym memberships for all, including employees who rarely use them.

Instead, he wrote, “perks should be conditioned on behaviors that make the perks sustainable in the first place.” In the gym example, this may mean a rebate for employees who go frequently enough to reap the physical and cognitive benefits of exercise.

It may be time for companies to rethink what constitutes a perk. Workers are happier and more productive with greater autonomy and flexibility in their schedules. The best office perk of all, as political economist William Davies previously told Quartz, may be “a system where employees can go to work, and just do the work.”