Altman to return after OpenAI employees threaten mass exodus

OpenAI employees have some of the most in-demand skills in tech. When a majority threatened to resign over Sam Altman's firing, they had and used that leverage.

The return of Sam Altman as OpenAI's CEO ends one of the most dramatic employee actions ever seen in tech. Most of the company's 770 employees threatened to quit over the ouster of Altman, their CEO and a company co-founder.

Altman's reinstatement agreement, posted on X, formerly known as Twitter, at 1 a.m. EST on Wednesday, is still being finalized. However, it could mean that employees loyal to OpenAI might stop answering calls from recruiters.

The employee threat put OpenAI's board of directors in an impossible position. The employees and their skills are in high demand, given they work for a ground-shaking company disrupting enterprise IT roadmaps with large language models, a technology quickly being integrated into HR systems and beyond. OpenAI also pays well, another indicator of in-demand skills.

OpenAI advertises a salary range of $200,000 to $385,000 for a senior software engineer. The pay range for an "engineering manager, AI inference systems" can reach $500,000. Benefits include "unlimited time off and 18+ company holidays per year" and an annual learning and development stipend of $1,500.

Tech employees haven't shied away from public stands against employers over military contracts, environmental practices and other issues. They have staged walkouts and signed letters and petitions. But nothing rivals the organized mass resignation as detailed in the letter to OpenAI's board of directors.

Analysts debated whether OpenAI's employees would have followed through on their threat to quit, but no one questioned the marketability of employees if they had done so.

One company that might have benefited from a mass exodus is Microsoft, which worked quickly to bring Altman and co-founder Greg Brockman to the company. Microsoft has a 49% stake in OpenAI. The software giant laid off 10,000 workers in January.

If OpenAI employees had quit, they would have been "able to find employment almost immediately and at a salary that is higher than what they currently are being paid," said Victor Janulaitis, CEO at Janco Associates and a labor market analyst.

OpenAI employees joined the company "for the mission and the big payoff, stock options and the dream of building something big enough to reward them with huge wealth," said Josh Bersin, an independent HR analyst.

Other options

If Altman hadn't returned or if a new CEO hadn't quickly inspired people, Bersin expected most OpenAI employees to leave for Anthropic, Google, Salesforce or one of the many AI startups in this space.

Every major billion-dollar company has an inspirational leader like this, and when he or she is replaced, it's unusual for the company to recover its momentum.
Josh BersinIndependent HR analyst

"Every major billion-dollar company has an inspirational leader like this, and when he or she is replaced, it's unusual for the company to recover its momentum," Bersin said. "In this case, I have never seen so much value destroyed in such a short period of time from a single decision that clearly was not really thought out."

But David Foote, a tech industry labor market analyst at Foote Partners, sees the situation differently. It's not a precedent "for a hot company to have a divorce at top." However, he noted that this situation is unusual because of Microsoft's $13 billion investment in OpenAI and its lack of board representation.

For now, Microsoft wants OpenAI to succeed, "so they don't have sufficient motivation to start raiding the company much beyond those they've already hired," Foote said.

Had Altman not been reinstated, Foote expected many OpenAI employees would have stayed in hopes of working at Microsoft one day.

"There is always a lot of emotions raging in a situation like this," Foote said. But he believes things will soon calm down at OpenAI, and he's not expecting a mass exodus. Some workers who have resisted offers "may be thinking twice about them, and maybe a few will bite, but it's not going to be many."

Josh Brenner, CEO of Hired, a job-matching platform for technology jobs, said OpenAI employees "are among the best-positioned tech candidates to receive multiple offers despite the overall challenging job market."

Since AI is a relatively new skill, Brenner said there is a shortage of qualified talent available "to match companies' insatiable demands. This makes the competition for top talent in this field even more intense."

The San Francisco Bay Area currently has the highest demand for in-person and hybrid AI candidates, and this is where OpenAI has its headquarters, Brenner said.

Update: Altman stated his intent to return to OpenAI after publication of this article.

Updated on 11/22/2023.

Patrick Thibodeau covers HCM and ERP technologies for TechTarget Editorial. He's worked for more than two decades as an enterprise IT reporter.

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