Over the past year, I’ve heard the same concern from Founders and CFOs: “Our younger employees don’t seem to care about equity the way we expected.” And it’s true. Gen Z is entering the workforce with unprecedented levels of skepticism, disengagement, and emotional distance from corporate tradition.

There’s data to back this: Studies have found a real generational shift in how young professionals perceive corporate promises, advancement paths, and long-term incentives like equity. Gallup polling and recent McKinsey research show employee engagement at decade lows, with workers under 35 driving much of the decline. Gen Z reports worse outcomes across the most important engagement indicators, from clarity of expectations to growth opportunities, further fueling doubt about employers’ promises and long-term rewards.

But the research suggests Gen Z’s apathy is not rebellion for rebellion’s sake. It’s a form of self-preservation shaped by economic instability, threat of automation, constant industry disruption, and declining trust in employers. This generation graduated into layoffs, watched equity reset overnight, and saw IPOs pushed years out. So, while some leaders see logging off at five and skipping the optional Zooms as a lack of commitment, others recognize that Gen Z is simply paying attention enough to set boundaries. As this generation steps into an uncertain landscape, can you blame them?

And, when equity’s perceived value is tied to an employee’s belief in the company’s future, these trends matter.

Layoffs, Valuations, and Delayed Exits: Why Equity Feels Uncertain

With more than 30,000 layoffs occurring within the first six weeks of 2026 (and another 30,000 in one fell swoop from a staple tech company), tech has been off to a bumpy start. Despite record profits in some segments, falling company valuations have chipped away at the perceived value of employee equity. Startups and high-growth companies are staying private longer, delaying IPOs and other liquidity events. For employees, that means equity feels less tangible, less predictable, and less motivating. Even when things are going well, headlines signal that their jobs are always at risk. The uncertainty stacks up fast.

Reframing Equity and Introducing Liquidity

So, what can you do about it? First, communicate equity more transparently, especially to new hires and younger employees who already express skepticism. Here’s some of the guidance we keep coming back to at Sequoia:

  • Acknowledge uncertainty upfront, even when the reality is uncomfortable. Employees appreciate honesty about market volatility.
  • Connect grants to measurable milestones. Tying equity to clear individual or company performance markers helps employees better understand timing, potential value, and how their own contribution makes a difference.
  • Give employees information about refresh cycles earlier. In a layoff-heavy environment, explaining how refresh grants work, and why they exist, can reduce confusion or fear.
  • Link equity to purpose and mission. When employees, particularly Gen Z, see social or mission-driven value in their work, they are more willing to view equity as part of a larger shared outcome rather than a disconnected financial incentive.

Beyond communication changes, liquidity programs like tender offers have become essential tools for maintaining morale, if you can offer them. These programs provide employees with opportunities to convert equity into tangible cash without waiting for an exit. And, in a contracting labor market, liquidity can differentiate an employer from competitors who are offering only theoretical long-term incentives.

For employees, when something is both uncertain and abstract, like equity, it feels misleading or even untruthful. While a single Founder or CFO can’t wave a magic wand and create total predictability around equity, there are opportunities to add clarity and opportunity, even for the most skeptical employee.

Gen Z continues to reshape expectations around work and purpose. Companies have to adapt their compensation & equity strategies accordingly. Ask a Sequoia advisor about developing and communicating your equity program.

Cris Cafiero — Cris is a Business Consultant at Sequoia, where he advises high-growth, investor-backed companies on people strategy across their total people investment and HR infrastructure. With 10 years of experience working with SMBs in the PEO industry and over five years advising startups at Sequoia, he partners closely with founders, finance leaders, and HR teams to help them scale thoughtfully while navigating compliance and operational complexity. As a licensed health and life insurance producer, Cris is trusted to build competitive healthcare and total rewards strategies for startups vying for top talent. He spent six years of his career in San Francisco and now resides in Southern California with his wife and two dogs. Outside of work, he writes a newsletter on the topics he advises clients on and enjoys travel, golf, reading, and music.