Nvidia CEO Jensen Huang has stated that he prefers to invest in employee development rather than resorting to layoffs. He believes this approach has contributed to Nvidia’s position as one of the world’s most valuable companies.
Huang, whose employees often work seven days a week and may stay as late as 2 a.m. (but are reportedly motivated by generous compensation), believes his management style has been instrumental in Nvidia’s success.
Jensen Huang’s Leadership Style
Nvidia employees describe Huang as “demanding” and “not easy to work for,” but the 61-year-old business magnate believes “that’s the way it should be.” Nvidia, valued at $3.1 trillion, is a leading chipmaker whose semiconductors drive artificial intelligence technology.
“When you fire somebody, you’re saying, a lot of people say: ‘it wasn’t your fault’, or ‘I made the wrong choice’, or ‘there are very few jobs’,” Huang explained during a June interview when questioned about his reluctance to terminate employees.
To illustrate his belief in employee advancement, Huang shared his experience working as a janitor before becoming CEO. “Look, I used to clean bathrooms, and now I’m the CEO of a company. I think you can learn it. I’m pretty certain you can learn this,” he said.
“And there are a lot of things in life that I believe you can learn, and you just have to be given the opportunity to learn it.” Huang, whose net worth is estimated at $111 billion by the Bloomberg Billionaires Index, stated that he is “learning constantly” from the 60 individuals directly reporting to him.
The Taiwanese billionaire required employees to send regular emails to a centralised address outlining the five tasks they were currently working on. Occasionally, he would respond to these emails, requesting further information or providing instructions.
“And so I don’t like giving up on people because I think they could improve. And so it’s tongue in cheek, but people know that I rather torture them into greatness,” the Nvidia boss added. According to Huang, “coaches that that really believe in their team, torture them into greatness.”
The top executive noted, “So, I would rather torture you into greatness because I believe in you. And I think coaches that that really believe in their team, torture them into greatness. And oftentimes, they’re so close, don’t give up. They’re so close to greatness.”
The Role Of Compensation In Employee Retention
According to a Bloomberg News report, several current and former Nvidia employees have described the company’s work environment as a high-pressure cooker, characterised by long, demanding hours and meetings that frequently escalate into heated arguments. Despite these challenges, many employees remain at Nvidia.
Nvidia’s generous stock compensation package is a primary factor motivating employees to remain at the company. The stock options granted to employees are subject to a four-year vesting period, providing a significant incentive to stay.
Since 2019, Nvidia’s stock price has skyrocketed by over 3,700 percent. This surge has transformed engineers with the company since then into newly minted multi-millionaires. In the previous year, only 5.3 percent of Nvidia employees left the company. However, this figure was cut in half following the company’s market capitalisation surpassing $1 trillion.
