Wall Street analysts believe that lowering costs will improve profits, and it probably will in the near term. Too many times, though, downsizing results in a loss of innovation capability and momentum which ultimately hurts shareholders as well as employees.
Another thing to consider: it’s very hard or significantly harder for large companies to innovate on their own. More likely; they’ll buy someone else and then build in/integrate functionality.
100% this. You have to spend on your existing tech and revenue streams. All of a sudden something like AI crops up that makes your entire processes obsolete. But you have to kill your product and your profits to make the jump, and even if you do, you're slower and coming from behind.
Innovator's dilemma kills companies that don't frequently evolve and reinvent. Or that don't have multiple billion dollar revenue streams to support the failing areas.
There is a lecturer, Aswath Damodaran, who actually teaches in depth about the perils of businesses pretending to be something they're not. Businesses that find greedy ways to dress up the pig, and avoid their destiny in the life cycle. Businesses shouldn't last forever. There are a select few who manage to survive by reinventing themselves, but those are only a few.
The incentive to block or prevent innovation, in order to protect their existing cash cow, is enormous.
See also: Google and Search (which has become dog shit now, btw).
Also already seeing it with generative AI. ChatGPT, Bing, and Bard seem to have only gotten worse since their debuts as layer upon layer of monetization integration and content blockers are added to appease existing corporations.
Used to be you could have an LLM quickly find the cheapest flight between two places over some given large span of time, but the last few times I tried most of the text in the result was devoted to encouraging me to hire a travel agent or use a site like expedia, which it is more than happy to refer me to. Doubly insulting is that sometimes they will give the rationale that they are refusing in order to "protect human jobs," when, in reality, those companies are going to replace their employees as fast as physically possible with these technologies. They just don't want anyone saving a buck in the mean time, so they are dedicating their efforts to hamstringing competing technologies.
The degredation of quality for LLMs is honestly amazing. The idea that someone, somewhere, was using ChatGPT to write some shitposts about Jews was enough for them to totally lobotomize the service and model in general. Basically killing its use in business or pleasure.
You didn't really believe we'd be given full access to that forever, did you?
That was an opening shot. A demonstration of capabilities. The announcement of a new contender.
There's a reason Microsoft is now the most valuable company in the world, and it won't be because you'll have free and easy access to this technology.
It is being, and will continue to be, used to replace the need for human labor in any and every way possibly applicable.
We saw Hollywood immediately protest this, and they now have new agreements.
That was in a heavily unionized industry.
But most of the world is not unionized.
Its the monetization of information resources. Think like Netflix used to be the only shop in town, it had the full run of everything. Then everyone starts to carve out their piece and Netflix becomes shit. So when AI consumes every known piece of information to form its output, its super good. When all the data sources start being excluded, the outputs become shitty or manipulated.
> could have an LLM quickly find the cheapest flight between two places over some given large span of time
I'm... not sure that's possible? Unless the LLM has access to ticket prices between all locations over that time, but in that case it's just a search, you don't need an LLM for that.
Sure, an LLM can do something you might task a human with doing, but if the human has to go to airline websites to search for flights, then that's outside of what an LLM can do without hallucinating.
This is why it irritates me that companies say net neutrality would've hurt innovation. Only a simple minded fool would believe that drivel. I don't think I need to explain how rolling back NN would actually harm innovation long term.
> The incentive to block or prevent innovation, in order to protect their existing cash cow, is enormous.
This, I feel, is due in no small part to corporations being large enough to buy influence.
Digital cameras were stunted because, I believe it was Kodiak, didn't want it to cut into their film sales. We didn't get that technology for I want to say a decade or better after it was developed, because of the perverse incentive to preserve a worse-for-the-consumer, more costly model.
The internet and streaming was another, though that came on so quickly and was so evidently better that they could do little to stop it. Especially since TV had become a bloated corpse of greed with almost more advertisements than actual programming at the ludicrous cost of $70+ a month.
"Pay $70 a month for access to a scheduled data broadcast that plays when it wants, not when you want, oh, and half of everything on it is advertisements" Cable TV was outrageously profitable, vastly overcharging for what it delivered, and then doubling down and milking further profit with ads.
It's really telling how much people resist ads now.
This doesn't really apply to digital cameras. Kodak, which was the dominant film player, didn't really have a leg in the business and famously was driven to pretty much bankruptcy because they wouldn't embrace it. It was just that the tech was expensive and took its time, like most technology.
3D printing is actually a better example. The FDM process was invented in the 80s and patented by Stratasys. Only when the patent ran out in 2005, along with some other technological developments, allowed the technology to be developed into the current revolution it is, brought on by the open source community.
>Digital cameras were stunted because, I believe it was Kodiak, didn't want it to cut into their film sales.
[Being the size of a toaster obviously played no role.](https://spectrum.ieee.org/first-digital-camera-history)
Every first model is large. This one also had a screen, which it didn't need, to demonstrate the potential of a digital vs film camera in reviewing images real time. It was a prototype and technology demonstration, not a production model
They deliberately stopped iterating on the project because of the impact on their film revenue.
You should read the article you linked, this information is all there. :D
It's a good thing for companies to die and new ones to be born. It rids the world of inefficiency and calcification and it rewards the younger professionals launching new businesses.
Employees at larger companies aren't compensated for innovation so why do it. You make the company 10 million dollars they give you a parking spot closer to the front door for a few months.
In January of 2020 I worked 80 hour weeks to ship a product that saved my fortune 50 company 10s of millions of dollars of cloud costs a year.
In February of 2020 I got laid off when they axed a third of their engineers due to the pandemic.
Also innovation has to fight its way through the politics and entrenched interests. For example, Nokia had a new phone that would have meant moving away from the old Symbian OS, but that created tension between the Symbian and Maemo teams when the company should have been focused on the new threat of the iPhone.
You can even end up with too much innovation that goes nowhere, because it is not aligned with any overall goal of the company but is just in the service of someone's promotion or empire building. Google is notorious for this.
I think its just not what they're good at. I work in biotech:
Worked at 10,000 employee company - Extremely good at making products people use, improving their products, keeping quality high. Every employee has a role and a department, which means innovation that should often happen by collaboration doesn't work, cos employees don't even know each other exist, are in different timezones/buildings...
Now I work in 10 person company (got laid off last Autumn). We all work together, brainstorm together, very creative place to be. But if we wanted to mass produce our product, none of use have all the skills or contacts we would need so would need a large company to help get it into place.
Most small biotechs/spin outs go bust, but a large company wouldn't tolerate 80% of its R&D teams failing (failing is guaranteed part of research). They only want to invest in stuff they are sure will be profitable (not early stage research then...)
I think the intolerance for failure is the really big problem. Politically as much a company wants to be forward thinking failure is bad politics so leaders who run teams which produce failures get their teams shrunk or otherwise stagnate. I've listened to leaders at a former startup now giant corporation try to explain why they still have a startup mentality while actually revealing that they do not in fact embrace the company's motto of "[failure you learn from is progress]" instead only taking safe bets.
There is a third problem of internal politics choosing bad winners when deciding what to put into production. If you were choosing between 5 possibly viable internal products the team that by chance is most politically influential has the best chance of being selected for investment. If instead you consider 5 external companies for aquisition a lot of the politics that can cloud judgement go away.
Biotechs have both. They can’t always be purchasing new companies. Maybe one every few years and it’s usually a company that already has a product on the market. But you are right about your other point, most people at those large companies are doing tasks that small companies don’t even think about. Like improving raw materials, increasing yield, qualifying backup suppliers, decreasing time for lot release…
I believe the arguments are generally that
1. When you grow as a company you generally become more risk averse as you don't want to mess up the cash flow you do have, so making those bets on innovative products and processes becomes much less common
2. Big companies move much slower just due to their size and the amount of levels everything has to go through to focus on new directions whereas smaller startups are more agile and can quickly change gears when needed
3. As a big company you're much more likely to have more regulatory eyes on you than a small startup that might be able to skate by in a lot of gray areas that may lead to innovation
So why not just buy a small startup that can do these things the big companies generally can't once they've made good progress on their product/service/etc
Because innovation is a random thing. A company can spend billions and stay behind a small start up. 1 in a 1000 startups will do something significant. It’s not easy. It’s easier to buy that one that made enough progress leaving other 999 behind, than trying to develop a 1000 ideas themselves. It’s not even given that you will make a breakthrough at all.
Coming up with an actually innovative idea and building a viable business out of it is like rolling a die 5 times and needing it to come up as 1 five times in a row or else you die.
It's infinitely more efficient to let little fish take on that risk, grow or maintain your existing viable business, and then buy one of the survivors of that lottery before they grow the business as much as they can.
Someone above, u/possibillistic , has already explained this.
Look at Dungeons & Dragons: it has been fifty years, surely someone can come up with rules that are better than 'roll a twenty sided die and see if you hit!' - and yet, there are hundreds if not thousands of newcomers that make better games that don't have even a fraction of the traction.
Google was an amazing example of this. The machine learning that is owned by OpenAI or Microsoft should be easily eclipsed by the search-engine MASTERS, right? And yet, Google-Bard is just not catching up as it should.
It is so weird that showing up second in any innovation race tends to give you a 'Participation' ribbon instead of a silver medal. I can't say that i understand it, but it is really easy to observe.
OpenAI beat Microsoft and Google by creating a core of world-renowned AI experts with a really exciting mission and approach to AI development. They then poached all of the top-top-top-tier talent from companies like Google and Microsoft.
Google made all of this possible by clamping down on letting researchers publish, while restricting what they could work on to "only billion+ bets". The problem is that by saying you can only start on a project if it will reach $1B ARR, you preemptively kill a lot of the ideas that can actually get there.
If you look at the landscape of AI right now, an absurd percentage of the "tech leaders" in the space all went *through* Google. But, they didn't stay there. It's well-known that Google invented the Transformer architecture that launched the current era of generative AI tech. What's less discussed is the fact that *every single author of "Attention is All You Need"*, to a person, left google within a few years of its publication.
Luminaries such as Andrew Ng, Ilya Sutskever, Dario Amodei, Noam Shazeer, they all went through Google Deep Mind, or Google Brain, or some other wing of Google research, and left after a few years to go work at more exciting/interesting places.
This is amazing information that i only had bits of / thanks for putting this so succinctly. These four paragraphs describe how the virtual universe is shifting before our eyes right now.
I am curious what you think of the 'memristor', the fourth in the set of resistor, capacitor and inductor.
https://en.wikipedia.org/wiki/Memristor
We use the big three components everywhere in electricity, water-fluid, gravity and heat-transfer. And yet! The Memristor never really saw the light of day.
If you have any idea why this happened, as a pleb, i would love to know.
I think your product determines whether second place is participation or silver medal.
My company does some things really well with its product stack. Probably a lot better than our main competitor. The problem is our main competitor is an old giant, and has a broader reach than we do.
So even though our product came after, and innovated more, we just can't win a lot of those battles because the prospects are already so entrenched in other products in the competitor's suite that we weren't going to win them no matter how good we were.
Having said that, being 2nd place in something like food is probably still extremely successful and well-known by everyone. Lays vs Pringles. Who is the winner? Honestly I couldn't tell you off the top of my head- but they're both household names.
Or, and this is where it gets a bit tricky, sometimes you want to be second to market. The first innovators can spend all the money, find out what works but also go down all the blind alleys and then often another company can swoop in and reap the majority of the profits off that work by iterating more successfully from that point.
Lots of products and services are highly replaceable and consumers don't always care who came to market first, they care who is giving them the best quality price ratio right now.
As an old guy, i'd say that this is a LOT more prevalent in the internet age than in my day.
Kleenex® and Saran Wrap became house-hold brands for goodness sakes. These are not complex products. Now it is possible to get entire laptops from China for $70 or less, which is really... weird? (for my generation).
It's not. The vast majority of people commenting on this stuff have zero experience making these decisions. There are a lot of reasons why companies get bought. The fraction of the time that it's about buying technology itself, it's generally still a combination of factors. It's pretty rare that a big company sets out to buy some specific capability. It happens, and it's pretty high profile when it does happen, but it's the rare exception overall. Typically, acquisitions in tech are opportunistic. You hear from bankers pitching a troubled asset, and you make a decision: is this a cheaper route to a piece of tech we wanted anyway? Does this accelerate our timelines realistically? Quite often (especially in bigger companies with experience doing acquisitions), the answer is simply: no, this won't save us time. What WILL save us time, though, is gathering information during a vetting process that can be used to build a better version of the product you were considering.
It isn't generally a question of ability or desire to innovate, it's a question of value vs time. Small inexperienced leadership underestimates the cost of acquisition and large companies generally don't. I speak from direct experience on this having been on both sides of the table (acquiring and being acquired).
I was just speaking with someone at one of these tech companies who didn't get dropped on the latest round of playoffs, and he explained to me like this.
Employees, especially engineers have been moving around for the past 3 years for higher salaries, or getting raises where they are to stay with the company. So by tech firms taking turns firing people, they basically just shift and trade the workforce around, but hire them at lower salaries. When you've just been fired you're willing to take a lower salary to for security. Employers know that.
So the tech firms still get employees, at a lower rate, and the employees often still go back to work, but for less money.
He said it's a calculated way to reset wages in the industry.
youth-shoring in other words... Not new...
40 years of IT inside my belt, and youth is moving up the ladder faster while I'm not. Not worried, I am not going to fail supporting broken-in and reliable HW vs fickle cloud products and pro-experience. Yeah, cloud is how I saw how IT would progress but I didn't foresee the cost of it, the risk, the shitty interfaces...
We hire and fire dozens of users per week. We offshored, nearshored and kinda metastasized data-keeping across given some conditions. But one trend is to the cloud - since 5 years - to no real results. Now we have a new push and all the platforms in view can't handle the load NAS systems happily support since 20 years! So we're creating more problems for "maybe a bit of ease handling the data".
We went from efficient in-house built support/change system, to shitty SAP to Jira. Opps, forgot the Notes nightmare... However the company doesnt go down given how shitty these softwares are. Monkeys just push buttons. The support teams went from local to external to offshored... Really, none did better than the in-house who knew who to contact. Meanwhile critical software support was being juggled between clueless India call centers time-wasting efforts until escalated to a dev in USA 3 days later... Who takes 10 minutes to fix your issue...
And it doesn't get better! What will AI imagine without experience? :) Can't wait for retirement LOL
Yep. This is just a very chaotic way of resetting wages that the executives view as being overinflated.
Unfortunately, inflation won’t stop increasing, so the rich will get richer and poor will get poorer, as always.
The company I work for is mandating return to office because they believe it will spark innovation. So far, it’s sparked people leaving and nobody is happy
I’m a SWE at a big tech company with an RTO policy. When I go in, I’m overwhelmed by meetings because those are our “collaboration” days. Yeah you could argue work gets done, but it’s usually just discussing designs and maintaining our scrum activities, or getting updates about some project. Rarely do these days contribute to our sprint burndown.
In contrast, I started a project with a friend remotely over Discord. We’ve only ever collaborated online for this project, no in-person meetings. It all works out fine, we blast through our requirements and implementation. Everything goes 10x faster and we’re innovating far more. Yes it’s far less complex than navigating a big tech organization to get solutions implemented, and yes the project is far less complex than the systems I work on at work. That doesn’t change the fact that we were able to design an entire system and start churning out code in the course of just a few hours, whereas at work the design will take 3 weeks due to vetting processes before a single line of code is written.
Communicating the complexity of a system is a lot easier when you’ve got a room and a whiteboard, sure. But we literally just used discord and excalidraw and it worked fine.
I’ve found collaboration while remote is just as efficient as in person, as long as team mates reach out to each other and don’t rely on scheduled meetings.
Company executives think they need to be able to walk past people talking to each other for teamwork to happen. Meanwhile in teams or slack it’s just: “hey, can you hop into a call? I’ll share my screen”.
Yeah this is it. The only issue I can see is integration of new teammates. Remote works really well if you’re well-acquainted with teammates. But if you’re not, it can feel awkward and unnatural to reach out. This issue is exacerbated by the fact that being fully remote limits your ability to become well acquainted with your teammates.
And typically, most people do the real brainstorming on their own after learning about the objective in a group setting.
IMO brainstorming in a group setting can lead to people going with an idea simply out of social pressure to go with a solution, rather than deciding on a collection of ideas brought up in a later discussion.
Yeah, that’s true that social dynamics affect problem solving. I’m a consultant and was coaching a team one time where nobody would say a thing until their boss said their idea. Then everybody just went along because the boss would absolutely shut down any open discussion or divergent thinking.
I told them this was a big problem and they didn’t want to hear it. We didn’t get along…
> but it’s usually just discussing designs and maintaining our scrum activities, or getting updates about some project.
"We need to have a meeting to plan when the group can get together to organize how much more frequently our daily status calls can occur. Our progress isn't fast enough so we may need to document our time in 5 minute increments."
There is a difference between you an your friend working together and a company of hundreds of people working in large condenses written by other people.
Sounds like your office is hybrid which is nice
Humans crave social validation. Perhaps all you needed was a five-minute check-in every day from someone who gets your stuff (and they too, same).
Class projects with 4+ people are usually 'one person does all the work, another helps the first person a bit and the rest...watch'. I am concerned that this is what offices sort of do a lot, like it is a tendency that sets in over time.
Covid probably increased productivity as suddenly you are accountable as your own individual 'class project'. I am curious, actually. If any of you have any studies on the effects of office synthesis-catharsis, i'd love to read them.
> Humans crave social validation.
This is very true, but it’s used far too often to prop up unsupported conclusions. As a dyed in the wool introvert, I prefer my social validation to come in the form of minimal group interactions and a complete avoidance of interpersonal office politics. I also crave the social validation of more time spent with family and loved ones, rather than some corporatist crap about convincing me that my coworkers are my family just because I spend a third of my life dealing with them.
At one of the big FAANG companies, they have internal data that shows relatively big slow downs in new product development since Covid. Productivity (sales per person) is still high, but they are worried about their future. It does, however, remain to be seen if you can put the genie back in the bottle. A lot of workers have realized that they don't want to live to work anymore, and are concentrating on better work-life balance.
There are so many contemporaneous things that could explain a slowdown in new product development other than wfh though. I know FAANG have the ability to analyze those other factors, but I also know managerial incentives can override actual analysis.
Yeah. And clearly at least at Amazon they don't have that data otherwise Jazzy wouldn't have said that he's doing it because he talked to other CEOs and they're doing it as well.
It's a BS explanation. Also how do you even calculate "new product development?" A slow down in new product development because you're streamlining resources to focus on a few key areas is a good thing, we don't need 100 of the same tools just slightly different flavours in the market.
Tbh i do like 1 day a week in the office to socialize and build a rapport with colleagues, but it definitely has steeply diminishing returns after that.
The other issue is that it destroys the good work culture that got them there from the more Machiavellian who’s better at the game of thrones politics.
our CEO said he could never imagine laying people off when things are shit. We run a pretty lean operation already and doing so would save pennies and we'd lose critical people which would thereby fuck us in the ass lmao. All our execs are actually very gung ho about *never* laying off during downswings in fact layoffs is not an avenue our company has ever taken, but also during these times expect real innovation/output from our teams to help drive things back up. Which I'm okay with. It's fun to laugh through the pain of our company being in the shitter while iterating on ideas and coming up with plans/visions to launch us back into good times. We went public not too long in the distant past and one of the key concerns our leaders had was the erosion of the culture that made us tick, and I think the moment we start seeing things like layoffs, which has never happened where I work, that would be the signal that things have finally eroded. So far so good though. We're currently in this stage where it feels like a home grown company but is somehow public, and you can definitely feel the forces of wall street trying to drive us towards shittier long term decisions in lieu of shortsighted gains, but so far our leadership block has stood strong. I don't expect this to last forever though, but I'm going to enjoy it while things are okay.
conversely, the last company I worked at (boeing), layoffs were practically a guarantee at some point in your tenure
To add to your comment, a lot of companies have been taken over by finance guys. Instead of being CFO, where they belong, they are now CEOs. Boeing is a great example of this.
They’re the children and grandchildren of people who actually built things. They have only ever known extraction of wealth, and weren’t taught to build it.
Google has been struggling to innovate for years now. With the recent spate or layoffs I think they’ve damaged their strong culture and trust with their employees which will make it even harder to innovate.
A buddy of mine keeps the electrons moving through the capacitors for Google, and he’s been saying that the creatives at the company have been beaten down for almost a decade.
Yeah. I’m not sure on the actual timeline but his take on it is that morale has been slowly and consistently sapped away from their workforce. His big issue is being able to hire talented technicians for his team because the interview process is both well known and openly onerous. The people he needs are the least likely to apply.
Tech in general struggles to innovate, and IMO a big driver is the financialization of business. Innovation requires a level of risk taking, which requires some level of understanding the technology at play to fully assess the risks. Meanwhile, the decision makers at a lot of these companies are MBAs who come from programs that preach the idea that having technical knowledge/skills isn’t important, and that what is actually important is that labor costs must be minimized above all else. This results in company cultures dominated by people who’s primary “qualification” is having successfully bullshitted themselves and others into believing that a degree in buzzwords and cost cutting is the same as having actual skills, while being unable to open a PDF on their own without it being a full on crisis.
Folks wonder why Costco has an exponential curve to their market value and it seems to be entirely because they want to compound longterm profit rather than extract as much value as possible for the next quarter.
It boggles my mind that this is a radical concept these days. We all understand immediate gratification vs long term gain, (even 1 marshmallow now or 3 tomorrow) but for some reason in the stock market this goes out the window.
Because in the stock market, you can take your short term gain, bail, and use it somewhere else to do it again immediately. They aren't trying to build anything but their bank accounts.
Which is contrary to the original concept of the stock market anyways; it was *supposed* to be about investing in companies you believed in and wanted to do well, which has a net positive on society, this does not.
I firmly believe that day trading and silly things like shorts and options should be banned. Only long trading should be allowed. The original purpose of raising capital in exchange for a reasonable share in profits is gone, only insatiable greed remains.
Won’t get an argument from me. Stock insurance, credit default swaps, student loan backed securities… these things do nothing to contribute and are eroding the system.
Hell after the 1929 crash, they created the Glass-Steagal Act to help prevent it from happening again; it was finally repealed in 1999 from heavy lobbying and it **only took 8 years** for the greedy Wall Street brokers to do it once more.
Also pushes a lot of the people who don't get laid off out. I did a phone screen last week with a super talented tech lead. He used to have 2 junior SWEs that worked with him. They both got laid off and the company expects him to do his work plus the work of those 2 juniors for no additional pay. So of course he's like "fuck that" and is looking to jump ship which will leave his team with zero SWEs.
This is of course all by design. I mean, *maybe* they really did think they could just keep the one guy doing three people's work, but more likely they wanted to cut his whole team but only wanted to pay severance to the two juniors.
The consultants doing these slash-and-burn jobs absolutely account for attrition and only lay off a fraction of the total number they intend to cut.
Why do you all think an MBA made people do this and not the most basic incentives. Nobody had to teach them this.
I fear we’re gonna throw out all business literacy, much of which clearly tells you this is no t sustainable behavior, and result in more of this behavior because nobody is even thinking anymore.
You need good business people, the problem is bad people make it to the top of companies. Smart business people see the costs behind the profits, the ignorant don’t.
> Wall Street analysts believe that lowering costs will improve profits
This only works where there are inefficiencies on an assembly line.
This is a completely stupid philosophy when dealing with knowledge workers and their products. But bean counters don't know this.
It's not... that's why there is an engineering principle behind developing software. Especially in tech you need skilled employees that don't cut corners. If you have a bad apple it will spiral out of control leading to hiring more and more people. However, the quality of the product won't increase, nor the pace of development. More often than not it is beneficial to keep the amount of developers as small as possible to ensure you have proper control over the project. It is always important to keep track of time spend between releases, quantity of release, and money spend per quantifiable unit. Usually when you see a steady increase in price per unit, it is time to get rid of some employees to increase efficiency. In tech more employees does not mean faster products, but at best more services.
What happened is, they overhired. Maybe they wanted to scale up for a short amount of time to build new services and were done at some point or they noticed that the metrics didn't work out the way they predicted and the bubble bursted.
Yep, but by then the damage is also done to the engineers. The great engineers cave to a lower paying job and the rest dominoes, as who is giving up a job when they are laying off thousands by the week.
Before Jack Welsh there was a very sane saying in senior leadership in business.: **You can't cost save your way to excellence.**
After Jack Welsh: "We don't need happy customers, we need lower costs."
On top of that the remaining employees will not put their all into the company as much because they know they are disposable. It’s a catch 22 if they need to cut due to over hiring then they lose productivity from the current workforce, especially when in some cases entire departments at the companies were shredded
1. Have a room full of MBAs making 7 figures look at a graph of growth trends for the company in the past 2 years.
2. Use that growth trend to predict what the growth will look like over the next two years with no consideration to other factors (market saturation, sustainability, etc…).
3. Go on hiring spree to demonstrate to investors that the company is prepared to meet the labor demand of the projected growth.
4. Use those predictions to generate investor excitement and pump the stock price.
5. Execs receive nice dividend payouts with the increase of stock price
6. Company comes nowhere near hitting the projected growth.
7. Stock falls
8. Company buys back the stock.
9. Lay off everyone the company hired during step 3.
10. Rinse and repeat
That is exactly what my old company is doing. Stock rose before their latest quarterly results. Results didn't hit estimates, stock dropped 17%. Company is buying back more of the stock to juice up the price. They are letting people go.
Stock buybacks used to be illegal, now they’re incomparably greater than dividend payouts or reinvestment into expansion or R&D as a share of profit use. It’s a disgusting disgrace.
My company just announced a bunch of stock buyback, conveniently before settling an FTC investigation into a hacking incident, and also conveniently right in the time frame where the following years' stock bonus price is being determined. I swear they're doing anything and everything they can to fuck with the price riiiight before last year's bonuses vest.
Stock doing well. Stock buyback announced, stock jumps. Stock remains status quo. FTC settlement, stock crashes for 3 days in a row. Stock bonus from last year vests next week.
The only real reason IMO is that they aren't taxed (except the capital gains, to a lesser extent and potentially much later). Otherwise they're both just handouts to shareholders.
Buybacks/dividends are important in the sense that nobody would invest in stock without the chance to make a return, but I think the balance needs to be tipped back in favor of reinvesting profits. A tax on buybacks plus a prohibition on dividends/buybacks within 2 years of layoffs (or vice-versa) would IMO go a long way towards encouraging companies to actually use their profits in ways that benefit workers and the economy.
AI blocked at work.
Jobsecurity confirmed, checkmate MBAs.
New filters enabled, you even google something like "AI, GPT, Open, LLM, Automation" we send you straight to compliance training.
Nothing better than no real world experienced analysts and investors telling people how to run a business vs providing additional data points to help make decisions.
Also why I'm so tired of the sway firms like Gartner and forrestor have on markets. They used to be seasoned vets turned expert analysts. Now theyre mostly out of school or haven't been in real work for 15+ years.
I once had a CFO and board demand an immediate death to a big sum of money we were paying a contracted dev firm that had built a part of our platform that our inhouse dev team had no time to address. Nearly killed the business all because they lacked the context that we were getting a 5-8x ROI on that cash out and wouldn't hear it.
all these mba consultants are literally parrot the same shit and usually executives leverage them to make decisions they already decided on.
Remember back in the 90s everyone and their moms decide to offshore their teams to india driven by the same business consultants and (shock pikachu face) blows up because of time zone, culture, work quality.
Chesterton's fence is a thing
People don't realize that every time the MBA consultants get blamed for bad behavior from a company, that investment to hire them is paying off. Consulting firms are primarily staff aug and scapegoats.
Source: was staff aug scapegoat for a while.
As someone who works for a dev consulting firm we recently got kicked out of grooming for stories because some MBA decided we cost too much to be in them. Turns out now we spend even more time asking the BAs about requirements because their requirements aren't the best or clear, asking their internal team what their desired solution approach even is, and bringing up implications they didn't consider that make some of the specifics being asked for or the approach the internal devs came up with not feasible.
So basically they save paying the 3 of us about 1-2 hours every other week so we can spend roughly that long on every other story we do talking to people.
To be fair outsourcing your core platform to contractors who won't have to support it long term and know it is a pretty bad strategy, but sounds like dumber chasing dumb
For sure. It was a necessary evil and the roadmap had us going away from dependence but keeping it as a very effective upsell. They chopped it up a year before that would've happened.
Edit: to add, it wasn't core to the product itself, but a complementary management and web interface. We had so many orgs asking for API dev support, I just productized it so no dev would be necessary to get the same benefit. we moonshotted because of this move, and fell like a sack of shit when it was prematurely killed.
> Lay off everyone the company hired during step 3.
No. Lay off anyone in the top % of the pay bracket. By the time you're laying people off, you kissed any sort of concept of productivity goodbye anyway.
Good observation. Contrary to popular belief very few companies actually rely upon last in first out for layoffs unless it is unionized workforce. High earners on teams are frequently targeted. In addition, orgs may heavily eliminate roles in supporting products that the company sees little future.
Also alot of these companies grew during low interest rates and borrowing money was cheap. Now we are in a high interest rate environment so they have to cut cost
This is one of the larger reasons. Money has gotten more expensive. When money was cheap and the market was really booming these companies hired a lot of people because it was cheap and you didn’t want to get left behind when your competitors were hiring all of the talent.
Now that everyone is struggling it's safer to let people go since competition isn't hiring or is laying people off. I feel bad for the employees and wish there was a better way to help them transition to new careers.
A lot of these big tech companies have massive money in the bank. They can hold out without having to resort to laying people off (especially as layoffs are expensive) it's just greed
For many it's also just normal to shed some people due to projects ending etc.
These huge companies are packed with people that do nothing. Thousands of people that go to work and do fuck all.
Our corporations are designed to maximize shareholder value, whereas the economy itself is designed to drive debt and subsidize industry: mostly private defense contractors, gas and oil companies, home, auto, education loans, and a few others.
You can change [or in some instances simply enforce] laws governing corporations, changing their incentive structures, without needing a new economy
Was that ever really the case in the US? By many metrics average Americans have more stock ownership than past generations, but most stocks retail investors have no hope of having any meaningful influence. Collectively they own a relatively small percentage of the overall market and a significant percentage of their exposure to the market is in mutual funds or ETFs. There has been a resurgent interest in individual stocks among retail investors, but it still isn't a huge percentage of most average persons investments, which aren't a huge percentage of the market. Occasionally you might have some meme stocks that retail investors can temporarily pull up the valuation, but that's generally been rather short spanned and if the fundamentals are still garbage will eventually come back to earth once enough people decide to take profits or the news on the actual company as opposed to meme stock posts becomes so gloomy it is too hard to ignore. The only reason some of those meme stocks retail investors had much of any influence was that they had such relatively low market caps. You'll never realistically hear of a case of a notable meme stock trend makes waves on non small cap stocks.
The person you're responding to is talking about employee-owned companies, not retail investing.
In general, I think the GME-driven obsession with retail investing is harmful (to the investors themselves). Considering almost all professional money managers underperform the S&P, I don't understand why we would want to encourage amateurs who know even less than them to gamble with their savings instead of just parking their money in a low-cost index fund.
When you are making such ridiculous profits and then place those profits above the human beings who made those profits possible, you start believing that with less people, you can make even more profits. It's a loop of ignorance and greed. Is that capitalism or pure greed? It's both.
It's like everyone in these comments has a short term memory problem. It wasn't even a year ago that these companies were hiring 2-3 times as many people as they are currently laying off.
Interest rates went up, investment revenue goes down. This isn't rocket science. When that happens it's time to trim the fat.
Yeah, this is definitely being overlooked in a lot of these discussions. Just as a frame of reference, while not a traditional tech company, Accenture does a load of consulting and work with the tech industry. Between August 2020 and March 2023 when they did their first layoff, Accenture hired 230,000 employees (globally). That's an average of 238 per day or 334 per weekday. That's a hiring rate that is difficult to even fathom. They did it to meet demand from their clients who were riding the wave of near-free loans. Then that money dried up and they had to cut 19,000 jobs. But even with the layoffs, they still hired 211,000 employees in the 2.5 years previous.
shame intelligent innate prick domineering crime continue shocking pet pathetic
*This post was mass deleted and anonymized with [Redact](https://redact.dev)*
I’ve been in this industry for decades. These cycles happen regularly, it’s best to keep an eye on your products’ profitability and where VC investment money is going and keep your skills up to date. Also invest in the market so you can reap the same rewards that investors do. Companies will snip entire product lines and let people go - they get sued less that way, so watch the reorgs so you don’t find yourself in the wrong group.
If you smell blood in the water, it’s time to jump to the new department or job.
My personal philosophy has always been to be somewhat flexible to location, so I can take advantage of opportunities all over the country.
Good tech skills are somewhat rare, relative to the total workforce. So if people aren’t finding jobs it’s likely due to lack of flexibility.
Agreed. Tech companies never know how much to hire, they usually just follow the leaders. Is NVDA hiring because of ? Better start hiring, we don't want to miss out. Is AAPL cutting staff? They must know something; get HR on the phone.
Layoffs in tech aren't a bell weather for anything. And navigating layoffs is a *totally normal* part of working in tech.
They just have to read the article (I know, tough) to see that the issue is exactly that. These companies hired massive amounts of people during the pandemic on huge salaries to do nothing.
Cost of capital is too high. Projects are often financed by debt, and the risk is too high and margins too thin to justify the moonshot ideas of the past.
Couple that with the relative high cost of tech employees, it’s not a winning formula.
The only reason manufacturing is seeing a renaissance is because development costs are offset by local/state/federal subsidies.
It's the only way to use Reddit when it comes to any discourse on anything related to the economy. Scroll past the first 10 most upvoted comments which are inevitably stupid, sarcastic, designed to titillate the dumb masses, and almost always wrong
I'm in tech, so I can give some insight.
First off, the tech industry overtired during the pandemic and interest rates were near zero, now that we're in a post pandemic world and interest rates are back up, companies are starting the cut the fat.
Of course, they don't want to give up their PPP loans that were forgiven, so they're short staffing as much as they can while post ghost jobs or lowball offers that people won't take so they can claim "Well, we're hiring, but no one is taking any jobs."
Also, "booming economy" usually means stock market gains and higher profits, not the regular workers.
Because they over-hired, product development teams have been made slower for it, and now that free money is gone, a bunch of wasteful projects inside companies are getting canned because they don’t add to the bottom line.
It’s not that hard.
plus a lot of people got into "tech" by taking a six week coding boot camp during lockdown and write the kind of shitty code you expect from someone like that
after a couple years of the senior devs doing the actual work some of these companies realized they had a lot of dead weight
yep and even the article itself started off as bullshit
a sales rep for ads - digital or otherwise - isn't a "tech" worker. that's a salesman who should be able to ply his trade in another industry because his skills are sales related, not technical
a developer or network engineer working at a hospital is a tech worker even though they work in another industry. they're not healthcare workers just because their office is in the basement of a hospital
FAANGs are either resume builders or gambles on the hope that they can stick around the 4 or 5 years necessary for the total compensation to actually hit. there are far more tech jobs outside of tech companies than inside of them
Because it's not booming. I'm a truck Driver. Freight is slow and has been for the last 6 months. Freight being slow means people aren't buying stuff. If the economy was booming people would have spare money to buy stuff.
The cost for necessities like food and shelter is going up. While wages are going down. Even though the current administration says that inflation is down, reality shows otherwise. Just like the current administration says the economy is booming but reality shows otherwise.
To show shareholders that they are investing in AI. This means reallocation of resources that will accomplish two things: Focussed workforce and lower operating cost.
It's not booming and only media outlets with political motivations are claiming that it is. They are gaslighting the poor into thinking that if you don't feel normal right now, well you just must be a loser that doesn't make enough money.
The simple fact is, everyone is living off of credit to make ends meet. as of August 2023, 44% of clothing is purchased with credit. 32% of health and beauty products, 27% of electronics, 25% of home furnishing, 28% of appliances. The list goes on and is between 20% to 50% of all normal purchases, regular people make, are bought on credit. And the Google trends for things like "how do I return a new car I bought" or "what happens if I don't pay my credit card" are skyrocketing.
Based on Fed data, most people. Tech, banking, and consulting (often overrepresented on Reddit. Tech obviously overrepresented in this sub) just happen to be the places that are not booming.
Though the biggest increases have largely gone to lower wage workers and wealthier asset owners. College educated white collar workers at the upper end of the income distribution have seen fewer gains outside of their asset portfolios (homes and investments).
Unemployment (U-3) and Underemployment (U-6) rates are near all-time lows. Prime age (25-54) labor force participation is the highest it has been in a generation and near an all-time high.
Median real (inflation adjusted) wages have been increasing steadily over the last 2 years and are firming above pre-pandemic levels. This is to say that median wages are consistently exceeding inflation again.
"The US economy is booming"
No the fuck it isn't. And I cannot get through your paywall nor do I need to with outright lies like that. You're shitting on the heads of the 70% of Americans who are struggling just as hard as during the pandemic. Stop using the dishonest U3 unemployment statistic.
The economy is SICK. Inflation has way outpaced wages and people are poorer than ever. We are hitting record levels of suffering since we've been measuring this thing - most of it related to finances (we are tying levels that are the same as 2008 housing market PEAK levels, FFS). Our debts per household have skyrocketed hitting record numbers.
**The economy is SICK**.
Yeah, I'm not sure what "average" person is doing well, nobody I know is. Everyone's wages are the same or haven't kept up with inflation. Maybe it's just my circle, but people aren't doing well.
Showing a line going up isn't helping them.
Every day we have one of these stories and not one of them ever mentions that tech companies are still employing people and they never give the net employment numbers for the industry. That's massively dishonest and provides a warped view of what's happening in the market place.
Honestly I think most tech companies had more programmers than they actually needed.
You don't need a lot of programmers for a status quo. However this will definitely hinder innovation.
Literally just to please Wall Street and investors. They don't need to, they make huge profits, we are in a version of capitalism which is awful for workers, competitors, countries and their social law, a version that would make Adam Smith himself furious.
One of the big reasons is tax deduction changes. Tech companies used to be able to write off almost all comp related to software engineering and of this year they can’t. So costs went up dramatically.
https://blog.pragmaticengineer.com/section-174/
Wall Street analysts believe that lowering costs will improve profits, and it probably will in the near term. Too many times, though, downsizing results in a loss of innovation capability and momentum which ultimately hurts shareholders as well as employees.
Another thing to consider: it’s very hard or significantly harder for large companies to innovate on their own. More likely; they’ll buy someone else and then build in/integrate functionality.
The innovator’s dilemma
100% this. You have to spend on your existing tech and revenue streams. All of a sudden something like AI crops up that makes your entire processes obsolete. But you have to kill your product and your profits to make the jump, and even if you do, you're slower and coming from behind. Innovator's dilemma kills companies that don't frequently evolve and reinvent. Or that don't have multiple billion dollar revenue streams to support the failing areas.
Oh well. We shouldn't expect companies, even large one, to last forever, any more than we expect careers to, anymore.
There is a lecturer, Aswath Damodaran, who actually teaches in depth about the perils of businesses pretending to be something they're not. Businesses that find greedy ways to dress up the pig, and avoid their destiny in the life cycle. Businesses shouldn't last forever. There are a select few who manage to survive by reinventing themselves, but those are only a few.
The incentive to block or prevent innovation, in order to protect their existing cash cow, is enormous. See also: Google and Search (which has become dog shit now, btw).
Also already seeing it with generative AI. ChatGPT, Bing, and Bard seem to have only gotten worse since their debuts as layer upon layer of monetization integration and content blockers are added to appease existing corporations. Used to be you could have an LLM quickly find the cheapest flight between two places over some given large span of time, but the last few times I tried most of the text in the result was devoted to encouraging me to hire a travel agent or use a site like expedia, which it is more than happy to refer me to. Doubly insulting is that sometimes they will give the rationale that they are refusing in order to "protect human jobs," when, in reality, those companies are going to replace their employees as fast as physically possible with these technologies. They just don't want anyone saving a buck in the mean time, so they are dedicating their efforts to hamstringing competing technologies.
I haven't seen such a fast adoption of new technology by business since the late 90s, when the internet finally took off.
It's happening way faster than internet adoption. People don't seem to realize that adopting tech is accelerating.
The degredation of quality for LLMs is honestly amazing. The idea that someone, somewhere, was using ChatGPT to write some shitposts about Jews was enough for them to totally lobotomize the service and model in general. Basically killing its use in business or pleasure.
You didn't really believe we'd be given full access to that forever, did you? That was an opening shot. A demonstration of capabilities. The announcement of a new contender. There's a reason Microsoft is now the most valuable company in the world, and it won't be because you'll have free and easy access to this technology. It is being, and will continue to be, used to replace the need for human labor in any and every way possibly applicable. We saw Hollywood immediately protest this, and they now have new agreements. That was in a heavily unionized industry. But most of the world is not unionized.
Its the monetization of information resources. Think like Netflix used to be the only shop in town, it had the full run of everything. Then everyone starts to carve out their piece and Netflix becomes shit. So when AI consumes every known piece of information to form its output, its super good. When all the data sources start being excluded, the outputs become shitty or manipulated.
> could have an LLM quickly find the cheapest flight between two places over some given large span of time I'm... not sure that's possible? Unless the LLM has access to ticket prices between all locations over that time, but in that case it's just a search, you don't need an LLM for that. Sure, an LLM can do something you might task a human with doing, but if the human has to go to airline websites to search for flights, then that's outside of what an LLM can do without hallucinating.
This is why it irritates me that companies say net neutrality would've hurt innovation. Only a simple minded fool would believe that drivel. I don't think I need to explain how rolling back NN would actually harm innovation long term.
enjoy https://arstechnica.com/tech-policy/2024/02/republicans-in-congress-try-to-kill-fccs-broadband-discrimination-rules/
Why do these guys hate their voters?
> The incentive to block or prevent innovation, in order to protect their existing cash cow, is enormous. This, I feel, is due in no small part to corporations being large enough to buy influence. Digital cameras were stunted because, I believe it was Kodiak, didn't want it to cut into their film sales. We didn't get that technology for I want to say a decade or better after it was developed, because of the perverse incentive to preserve a worse-for-the-consumer, more costly model. The internet and streaming was another, though that came on so quickly and was so evidently better that they could do little to stop it. Especially since TV had become a bloated corpse of greed with almost more advertisements than actual programming at the ludicrous cost of $70+ a month. "Pay $70 a month for access to a scheduled data broadcast that plays when it wants, not when you want, oh, and half of everything on it is advertisements" Cable TV was outrageously profitable, vastly overcharging for what it delivered, and then doubling down and milking further profit with ads. It's really telling how much people resist ads now.
This doesn't really apply to digital cameras. Kodak, which was the dominant film player, didn't really have a leg in the business and famously was driven to pretty much bankruptcy because they wouldn't embrace it. It was just that the tech was expensive and took its time, like most technology. 3D printing is actually a better example. The FDM process was invented in the 80s and patented by Stratasys. Only when the patent ran out in 2005, along with some other technological developments, allowed the technology to be developed into the current revolution it is, brought on by the open source community.
>Digital cameras were stunted because, I believe it was Kodiak, didn't want it to cut into their film sales. [Being the size of a toaster obviously played no role.](https://spectrum.ieee.org/first-digital-camera-history)
Every first model is large. This one also had a screen, which it didn't need, to demonstrate the potential of a digital vs film camera in reviewing images real time. It was a prototype and technology demonstration, not a production model They deliberately stopped iterating on the project because of the impact on their film revenue. You should read the article you linked, this information is all there. :D
It's a good thing for companies to die and new ones to be born. It rids the world of inefficiency and calcification and it rewards the younger professionals launching new businesses.
Why is it harder for them to innovate than to buy a company?
Employees at larger companies aren't compensated for innovation so why do it. You make the company 10 million dollars they give you a parking spot closer to the front door for a few months.
> they give *your boss a parking spot closer to the front door for a few months. Fixed it for ya
In January of 2020 I worked 80 hour weeks to ship a product that saved my fortune 50 company 10s of millions of dollars of cloud costs a year. In February of 2020 I got laid off when they axed a third of their engineers due to the pandemic.
They’re so stupid. I call an MBA a masters in bob advancement… after the bobs in office space.
Also innovation has to fight its way through the politics and entrenched interests. For example, Nokia had a new phone that would have meant moving away from the old Symbian OS, but that created tension between the Symbian and Maemo teams when the company should have been focused on the new threat of the iPhone. You can even end up with too much innovation that goes nowhere, because it is not aligned with any overall goal of the company but is just in the service of someone's promotion or empire building. Google is notorious for this.
More likely, your innovation isn't on the product roadmap.
I think its just not what they're good at. I work in biotech: Worked at 10,000 employee company - Extremely good at making products people use, improving their products, keeping quality high. Every employee has a role and a department, which means innovation that should often happen by collaboration doesn't work, cos employees don't even know each other exist, are in different timezones/buildings... Now I work in 10 person company (got laid off last Autumn). We all work together, brainstorm together, very creative place to be. But if we wanted to mass produce our product, none of use have all the skills or contacts we would need so would need a large company to help get it into place. Most small biotechs/spin outs go bust, but a large company wouldn't tolerate 80% of its R&D teams failing (failing is guaranteed part of research). They only want to invest in stuff they are sure will be profitable (not early stage research then...)
I think the intolerance for failure is the really big problem. Politically as much a company wants to be forward thinking failure is bad politics so leaders who run teams which produce failures get their teams shrunk or otherwise stagnate. I've listened to leaders at a former startup now giant corporation try to explain why they still have a startup mentality while actually revealing that they do not in fact embrace the company's motto of "[failure you learn from is progress]" instead only taking safe bets. There is a third problem of internal politics choosing bad winners when deciding what to put into production. If you were choosing between 5 possibly viable internal products the team that by chance is most politically influential has the best chance of being selected for investment. If instead you consider 5 external companies for aquisition a lot of the politics that can cloud judgement go away.
Biotechs have both. They can’t always be purchasing new companies. Maybe one every few years and it’s usually a company that already has a product on the market. But you are right about your other point, most people at those large companies are doing tasks that small companies don’t even think about. Like improving raw materials, increasing yield, qualifying backup suppliers, decreasing time for lot release…
I believe the arguments are generally that 1. When you grow as a company you generally become more risk averse as you don't want to mess up the cash flow you do have, so making those bets on innovative products and processes becomes much less common 2. Big companies move much slower just due to their size and the amount of levels everything has to go through to focus on new directions whereas smaller startups are more agile and can quickly change gears when needed 3. As a big company you're much more likely to have more regulatory eyes on you than a small startup that might be able to skate by in a lot of gray areas that may lead to innovation So why not just buy a small startup that can do these things the big companies generally can't once they've made good progress on their product/service/etc
why use brain when money do trick?
This is going on memegen
Because innovation is a random thing. A company can spend billions and stay behind a small start up. 1 in a 1000 startups will do something significant. It’s not easy. It’s easier to buy that one that made enough progress leaving other 999 behind, than trying to develop a 1000 ideas themselves. It’s not even given that you will make a breakthrough at all.
[удалено]
Coming up with an actually innovative idea and building a viable business out of it is like rolling a die 5 times and needing it to come up as 1 five times in a row or else you die. It's infinitely more efficient to let little fish take on that risk, grow or maintain your existing viable business, and then buy one of the survivors of that lottery before they grow the business as much as they can.
Someone above, u/possibillistic , has already explained this. Look at Dungeons & Dragons: it has been fifty years, surely someone can come up with rules that are better than 'roll a twenty sided die and see if you hit!' - and yet, there are hundreds if not thousands of newcomers that make better games that don't have even a fraction of the traction. Google was an amazing example of this. The machine learning that is owned by OpenAI or Microsoft should be easily eclipsed by the search-engine MASTERS, right? And yet, Google-Bard is just not catching up as it should. It is so weird that showing up second in any innovation race tends to give you a 'Participation' ribbon instead of a silver medal. I can't say that i understand it, but it is really easy to observe.
OpenAI beat Microsoft and Google by creating a core of world-renowned AI experts with a really exciting mission and approach to AI development. They then poached all of the top-top-top-tier talent from companies like Google and Microsoft. Google made all of this possible by clamping down on letting researchers publish, while restricting what they could work on to "only billion+ bets". The problem is that by saying you can only start on a project if it will reach $1B ARR, you preemptively kill a lot of the ideas that can actually get there. If you look at the landscape of AI right now, an absurd percentage of the "tech leaders" in the space all went *through* Google. But, they didn't stay there. It's well-known that Google invented the Transformer architecture that launched the current era of generative AI tech. What's less discussed is the fact that *every single author of "Attention is All You Need"*, to a person, left google within a few years of its publication. Luminaries such as Andrew Ng, Ilya Sutskever, Dario Amodei, Noam Shazeer, they all went through Google Deep Mind, or Google Brain, or some other wing of Google research, and left after a few years to go work at more exciting/interesting places.
This is amazing information that i only had bits of / thanks for putting this so succinctly. These four paragraphs describe how the virtual universe is shifting before our eyes right now. I am curious what you think of the 'memristor', the fourth in the set of resistor, capacitor and inductor. https://en.wikipedia.org/wiki/Memristor We use the big three components everywhere in electricity, water-fluid, gravity and heat-transfer. And yet! The Memristor never really saw the light of day. If you have any idea why this happened, as a pleb, i would love to know.
I think your product determines whether second place is participation or silver medal. My company does some things really well with its product stack. Probably a lot better than our main competitor. The problem is our main competitor is an old giant, and has a broader reach than we do. So even though our product came after, and innovated more, we just can't win a lot of those battles because the prospects are already so entrenched in other products in the competitor's suite that we weren't going to win them no matter how good we were. Having said that, being 2nd place in something like food is probably still extremely successful and well-known by everyone. Lays vs Pringles. Who is the winner? Honestly I couldn't tell you off the top of my head- but they're both household names.
Or, and this is where it gets a bit tricky, sometimes you want to be second to market. The first innovators can spend all the money, find out what works but also go down all the blind alleys and then often another company can swoop in and reap the majority of the profits off that work by iterating more successfully from that point. Lots of products and services are highly replaceable and consumers don't always care who came to market first, they care who is giving them the best quality price ratio right now.
As an old guy, i'd say that this is a LOT more prevalent in the internet age than in my day. Kleenex® and Saran Wrap became house-hold brands for goodness sakes. These are not complex products. Now it is possible to get entire laptops from China for $70 or less, which is really... weird? (for my generation).
It's not. The vast majority of people commenting on this stuff have zero experience making these decisions. There are a lot of reasons why companies get bought. The fraction of the time that it's about buying technology itself, it's generally still a combination of factors. It's pretty rare that a big company sets out to buy some specific capability. It happens, and it's pretty high profile when it does happen, but it's the rare exception overall. Typically, acquisitions in tech are opportunistic. You hear from bankers pitching a troubled asset, and you make a decision: is this a cheaper route to a piece of tech we wanted anyway? Does this accelerate our timelines realistically? Quite often (especially in bigger companies with experience doing acquisitions), the answer is simply: no, this won't save us time. What WILL save us time, though, is gathering information during a vetting process that can be used to build a better version of the product you were considering. It isn't generally a question of ability or desire to innovate, it's a question of value vs time. Small inexperienced leadership underestimates the cost of acquisition and large companies generally don't. I speak from direct experience on this having been on both sides of the table (acquiring and being acquired).
I was just speaking with someone at one of these tech companies who didn't get dropped on the latest round of playoffs, and he explained to me like this. Employees, especially engineers have been moving around for the past 3 years for higher salaries, or getting raises where they are to stay with the company. So by tech firms taking turns firing people, they basically just shift and trade the workforce around, but hire them at lower salaries. When you've just been fired you're willing to take a lower salary to for security. Employers know that. So the tech firms still get employees, at a lower rate, and the employees often still go back to work, but for less money. He said it's a calculated way to reset wages in the industry.
God this is grim.
youth-shoring in other words... Not new... 40 years of IT inside my belt, and youth is moving up the ladder faster while I'm not. Not worried, I am not going to fail supporting broken-in and reliable HW vs fickle cloud products and pro-experience. Yeah, cloud is how I saw how IT would progress but I didn't foresee the cost of it, the risk, the shitty interfaces... We hire and fire dozens of users per week. We offshored, nearshored and kinda metastasized data-keeping across given some conditions. But one trend is to the cloud - since 5 years - to no real results. Now we have a new push and all the platforms in view can't handle the load NAS systems happily support since 20 years! So we're creating more problems for "maybe a bit of ease handling the data". We went from efficient in-house built support/change system, to shitty SAP to Jira. Opps, forgot the Notes nightmare... However the company doesnt go down given how shitty these softwares are. Monkeys just push buttons. The support teams went from local to external to offshored... Really, none did better than the in-house who knew who to contact. Meanwhile critical software support was being juggled between clueless India call centers time-wasting efforts until escalated to a dev in USA 3 days later... Who takes 10 minutes to fix your issue... And it doesn't get better! What will AI imagine without experience? :) Can't wait for retirement LOL
Yep. This is just a very chaotic way of resetting wages that the executives view as being overinflated. Unfortunately, inflation won’t stop increasing, so the rich will get richer and poor will get poorer, as always.
So class warfare?
The company I work for is mandating return to office because they believe it will spark innovation. So far, it’s sparked people leaving and nobody is happy
Maybe the intention was silent layoff.
Quiet firing is what I've been calling it.
I’m a SWE at a big tech company with an RTO policy. When I go in, I’m overwhelmed by meetings because those are our “collaboration” days. Yeah you could argue work gets done, but it’s usually just discussing designs and maintaining our scrum activities, or getting updates about some project. Rarely do these days contribute to our sprint burndown. In contrast, I started a project with a friend remotely over Discord. We’ve only ever collaborated online for this project, no in-person meetings. It all works out fine, we blast through our requirements and implementation. Everything goes 10x faster and we’re innovating far more. Yes it’s far less complex than navigating a big tech organization to get solutions implemented, and yes the project is far less complex than the systems I work on at work. That doesn’t change the fact that we were able to design an entire system and start churning out code in the course of just a few hours, whereas at work the design will take 3 weeks due to vetting processes before a single line of code is written. Communicating the complexity of a system is a lot easier when you’ve got a room and a whiteboard, sure. But we literally just used discord and excalidraw and it worked fine.
I’ve found collaboration while remote is just as efficient as in person, as long as team mates reach out to each other and don’t rely on scheduled meetings. Company executives think they need to be able to walk past people talking to each other for teamwork to happen. Meanwhile in teams or slack it’s just: “hey, can you hop into a call? I’ll share my screen”.
Yeah this is it. The only issue I can see is integration of new teammates. Remote works really well if you’re well-acquainted with teammates. But if you’re not, it can feel awkward and unnatural to reach out. This issue is exacerbated by the fact that being fully remote limits your ability to become well acquainted with your teammates.
And typically, most people do the real brainstorming on their own after learning about the objective in a group setting. IMO brainstorming in a group setting can lead to people going with an idea simply out of social pressure to go with a solution, rather than deciding on a collection of ideas brought up in a later discussion.
Yeah, that’s true that social dynamics affect problem solving. I’m a consultant and was coaching a team one time where nobody would say a thing until their boss said their idea. Then everybody just went along because the boss would absolutely shut down any open discussion or divergent thinking. I told them this was a big problem and they didn’t want to hear it. We didn’t get along…
> but it’s usually just discussing designs and maintaining our scrum activities, or getting updates about some project. "We need to have a meeting to plan when the group can get together to organize how much more frequently our daily status calls can occur. Our progress isn't fast enough so we may need to document our time in 5 minute increments."
There is a difference between you an your friend working together and a company of hundreds of people working in large condenses written by other people. Sounds like your office is hybrid which is nice
Yes I called that out.
Humans crave social validation. Perhaps all you needed was a five-minute check-in every day from someone who gets your stuff (and they too, same). Class projects with 4+ people are usually 'one person does all the work, another helps the first person a bit and the rest...watch'. I am concerned that this is what offices sort of do a lot, like it is a tendency that sets in over time. Covid probably increased productivity as suddenly you are accountable as your own individual 'class project'. I am curious, actually. If any of you have any studies on the effects of office synthesis-catharsis, i'd love to read them.
> Humans crave social validation. This is very true, but it’s used far too often to prop up unsupported conclusions. As a dyed in the wool introvert, I prefer my social validation to come in the form of minimal group interactions and a complete avoidance of interpersonal office politics. I also crave the social validation of more time spent with family and loved ones, rather than some corporatist crap about convincing me that my coworkers are my family just because I spend a third of my life dealing with them.
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And that’s what they want. You quit they don’t have to pay unemployment or give you a severance package. It’s a lay off without laying you off.
Most of my innovation comes in the shower or my grumblings to myself after a wasteful meeting.
At one of the big FAANG companies, they have internal data that shows relatively big slow downs in new product development since Covid. Productivity (sales per person) is still high, but they are worried about their future. It does, however, remain to be seen if you can put the genie back in the bottle. A lot of workers have realized that they don't want to live to work anymore, and are concentrating on better work-life balance.
There are so many contemporaneous things that could explain a slowdown in new product development other than wfh though. I know FAANG have the ability to analyze those other factors, but I also know managerial incentives can override actual analysis.
Yeah. And clearly at least at Amazon they don't have that data otherwise Jazzy wouldn't have said that he's doing it because he talked to other CEOs and they're doing it as well. It's a BS explanation. Also how do you even calculate "new product development?" A slow down in new product development because you're streamlining resources to focus on a few key areas is a good thing, we don't need 100 of the same tools just slightly different flavours in the market.
Tbh i do like 1 day a week in the office to socialize and build a rapport with colleagues, but it definitely has steeply diminishing returns after that.
The other issue is that it destroys the good work culture that got them there from the more Machiavellian who’s better at the game of thrones politics.
our CEO said he could never imagine laying people off when things are shit. We run a pretty lean operation already and doing so would save pennies and we'd lose critical people which would thereby fuck us in the ass lmao. All our execs are actually very gung ho about *never* laying off during downswings in fact layoffs is not an avenue our company has ever taken, but also during these times expect real innovation/output from our teams to help drive things back up. Which I'm okay with. It's fun to laugh through the pain of our company being in the shitter while iterating on ideas and coming up with plans/visions to launch us back into good times. We went public not too long in the distant past and one of the key concerns our leaders had was the erosion of the culture that made us tick, and I think the moment we start seeing things like layoffs, which has never happened where I work, that would be the signal that things have finally eroded. So far so good though. We're currently in this stage where it feels like a home grown company but is somehow public, and you can definitely feel the forces of wall street trying to drive us towards shittier long term decisions in lieu of shortsighted gains, but so far our leadership block has stood strong. I don't expect this to last forever though, but I'm going to enjoy it while things are okay. conversely, the last company I worked at (boeing), layoffs were practically a guarantee at some point in your tenure
"I live my life a fiscal quarter mile at a time" Some CEO, probably
To add to your comment, a lot of companies have been taken over by finance guys. Instead of being CFO, where they belong, they are now CEOs. Boeing is a great example of this.
And Best Buy
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They’re the children and grandchildren of people who actually built things. They have only ever known extraction of wealth, and weren’t taught to build it.
pigs get fed, hogs get slaughtered
Google has been struggling to innovate for years now. With the recent spate or layoffs I think they’ve damaged their strong culture and trust with their employees which will make it even harder to innovate.
A buddy of mine keeps the electrons moving through the capacitors for Google, and he’s been saying that the creatives at the company have been beaten down for almost a decade.
Matches with when Sundar became CEO - he really is an ineffective leader
Yeah. I’m not sure on the actual timeline but his take on it is that morale has been slowly and consistently sapped away from their workforce. His big issue is being able to hire talented technicians for his team because the interview process is both well known and openly onerous. The people he needs are the least likely to apply.
Tech in general struggles to innovate, and IMO a big driver is the financialization of business. Innovation requires a level of risk taking, which requires some level of understanding the technology at play to fully assess the risks. Meanwhile, the decision makers at a lot of these companies are MBAs who come from programs that preach the idea that having technical knowledge/skills isn’t important, and that what is actually important is that labor costs must be minimized above all else. This results in company cultures dominated by people who’s primary “qualification” is having successfully bullshitted themselves and others into believing that a degree in buzzwords and cost cutting is the same as having actual skills, while being unable to open a PDF on their own without it being a full on crisis.
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Folks wonder why Costco has an exponential curve to their market value and it seems to be entirely because they want to compound longterm profit rather than extract as much value as possible for the next quarter.
It boggles my mind that this is a radical concept these days. We all understand immediate gratification vs long term gain, (even 1 marshmallow now or 3 tomorrow) but for some reason in the stock market this goes out the window.
Because in the stock market, you can take your short term gain, bail, and use it somewhere else to do it again immediately. They aren't trying to build anything but their bank accounts.
Which is contrary to the original concept of the stock market anyways; it was *supposed* to be about investing in companies you believed in and wanted to do well, which has a net positive on society, this does not.
I firmly believe that day trading and silly things like shorts and options should be banned. Only long trading should be allowed. The original purpose of raising capital in exchange for a reasonable share in profits is gone, only insatiable greed remains.
Won’t get an argument from me. Stock insurance, credit default swaps, student loan backed securities… these things do nothing to contribute and are eroding the system. Hell after the 1929 crash, they created the Glass-Steagal Act to help prevent it from happening again; it was finally repealed in 1999 from heavy lobbying and it **only took 8 years** for the greedy Wall Street brokers to do it once more.
Also pushes a lot of the people who don't get laid off out. I did a phone screen last week with a super talented tech lead. He used to have 2 junior SWEs that worked with him. They both got laid off and the company expects him to do his work plus the work of those 2 juniors for no additional pay. So of course he's like "fuck that" and is looking to jump ship which will leave his team with zero SWEs.
This is of course all by design. I mean, *maybe* they really did think they could just keep the one guy doing three people's work, but more likely they wanted to cut his whole team but only wanted to pay severance to the two juniors. The consultants doing these slash-and-burn jobs absolutely account for attrition and only lay off a fraction of the total number they intend to cut.
I've said many times. Wall Street aren't interested in twenty bucks next week if they can make ten bucks today. Damn the consequences.
MBAs were a mistake… that and the idea of permanent continuous growth. Which is by logic unsustainable.
Why do you all think an MBA made people do this and not the most basic incentives. Nobody had to teach them this. I fear we’re gonna throw out all business literacy, much of which clearly tells you this is no t sustainable behavior, and result in more of this behavior because nobody is even thinking anymore. You need good business people, the problem is bad people make it to the top of companies. Smart business people see the costs behind the profits, the ignorant don’t.
> Wall Street analysts believe that lowering costs will improve profits This only works where there are inefficiencies on an assembly line. This is a completely stupid philosophy when dealing with knowledge workers and their products. But bean counters don't know this.
It's not... that's why there is an engineering principle behind developing software. Especially in tech you need skilled employees that don't cut corners. If you have a bad apple it will spiral out of control leading to hiring more and more people. However, the quality of the product won't increase, nor the pace of development. More often than not it is beneficial to keep the amount of developers as small as possible to ensure you have proper control over the project. It is always important to keep track of time spend between releases, quantity of release, and money spend per quantifiable unit. Usually when you see a steady increase in price per unit, it is time to get rid of some employees to increase efficiency. In tech more employees does not mean faster products, but at best more services. What happened is, they overhired. Maybe they wanted to scale up for a short amount of time to build new services and were done at some point or they noticed that the metrics didn't work out the way they predicted and the bubble bursted.
You’re looking at it from a long term perspective. I think CEO’s are looking at it from a quarterly perspective though.
Quarterly profits, annual bonuses, and eventual golden parachutes.
I hate to say it but I think many tech companies are hoping to shed their high priced engineers for cheaper ones and AI will make up the difference.
Gonna be a bad day when they discover AI doesnt work like that yet
Yep, but by then the damage is also done to the engineers. The great engineers cave to a lower paying job and the rest dominoes, as who is giving up a job when they are laying off thousands by the week.
Anything for them sweet short term quarterly gains tho, amirite ??!!!?
... by which point the day traders of this world will be long gone with their profits and not care one yota about what's left behind.
Before Jack Welsh there was a very sane saying in senior leadership in business.: **You can't cost save your way to excellence.** After Jack Welsh: "We don't need happy customers, we need lower costs."
On top of that the remaining employees will not put their all into the company as much because they know they are disposable. It’s a catch 22 if they need to cut due to over hiring then they lose productivity from the current workforce, especially when in some cases entire departments at the companies were shredded
"Who cares? That's the *next* CEO's problem! I've got my multi-million dollar bonus secured!" \- All of them, probably
I blame Reagan and Milton Friedman. Edit: Musk and Zuckerberg, too.
It’s pretty clear by now that the rich people are society’s enemy.
1. Have a room full of MBAs making 7 figures look at a graph of growth trends for the company in the past 2 years. 2. Use that growth trend to predict what the growth will look like over the next two years with no consideration to other factors (market saturation, sustainability, etc…). 3. Go on hiring spree to demonstrate to investors that the company is prepared to meet the labor demand of the projected growth. 4. Use those predictions to generate investor excitement and pump the stock price. 5. Execs receive nice dividend payouts with the increase of stock price 6. Company comes nowhere near hitting the projected growth. 7. Stock falls 8. Company buys back the stock. 9. Lay off everyone the company hired during step 3. 10. Rinse and repeat
That is exactly what my old company is doing. Stock rose before their latest quarterly results. Results didn't hit estimates, stock dropped 17%. Company is buying back more of the stock to juice up the price. They are letting people go.
Stock buybacks used to be illegal, now they’re incomparably greater than dividend payouts or reinvestment into expansion or R&D as a share of profit use. It’s a disgusting disgrace.
My company just announced a bunch of stock buyback, conveniently before settling an FTC investigation into a hacking incident, and also conveniently right in the time frame where the following years' stock bonus price is being determined. I swear they're doing anything and everything they can to fuck with the price riiiight before last year's bonuses vest. Stock doing well. Stock buyback announced, stock jumps. Stock remains status quo. FTC settlement, stock crashes for 3 days in a row. Stock bonus from last year vests next week.
If they're insider trading their stock, surely they would plan to buy back after the price crashes down.
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The only real reason IMO is that they aren't taxed (except the capital gains, to a lesser extent and potentially much later). Otherwise they're both just handouts to shareholders. Buybacks/dividends are important in the sense that nobody would invest in stock without the chance to make a return, but I think the balance needs to be tipped back in favor of reinvesting profits. A tax on buybacks plus a prohibition on dividends/buybacks within 2 years of layoffs (or vice-versa) would IMO go a long way towards encouraging companies to actually use their profits in ways that benefit workers and the economy.
The cash used for a buyback was already taxed as corporate earnings and then it’s taxed again as a capital gain for the seller.
You forgot the part where those same MBAs jump ship to another company to do it all over again at a different company.
With higher pay this time
Line must go up.
*Line most go up faster and faster each year
This guy macros
InfoSec would like a word with that guy. No macros allowed.
infosec team got laid off, can't have cost centers anymore
Yup, but GRC was replaced by AI more like it. Now the machine is telling you this.
AI blocked at work. Jobsecurity confirmed, checkmate MBAs. New filters enabled, you even google something like "AI, GPT, Open, LLM, Automation" we send you straight to compliance training.
Nothing better than no real world experienced analysts and investors telling people how to run a business vs providing additional data points to help make decisions. Also why I'm so tired of the sway firms like Gartner and forrestor have on markets. They used to be seasoned vets turned expert analysts. Now theyre mostly out of school or haven't been in real work for 15+ years. I once had a CFO and board demand an immediate death to a big sum of money we were paying a contracted dev firm that had built a part of our platform that our inhouse dev team had no time to address. Nearly killed the business all because they lacked the context that we were getting a 5-8x ROI on that cash out and wouldn't hear it.
all these mba consultants are literally parrot the same shit and usually executives leverage them to make decisions they already decided on. Remember back in the 90s everyone and their moms decide to offshore their teams to india driven by the same business consultants and (shock pikachu face) blows up because of time zone, culture, work quality. Chesterton's fence is a thing
People don't realize that every time the MBA consultants get blamed for bad behavior from a company, that investment to hire them is paying off. Consulting firms are primarily staff aug and scapegoats. Source: was staff aug scapegoat for a while.
As someone who works for a dev consulting firm we recently got kicked out of grooming for stories because some MBA decided we cost too much to be in them. Turns out now we spend even more time asking the BAs about requirements because their requirements aren't the best or clear, asking their internal team what their desired solution approach even is, and bringing up implications they didn't consider that make some of the specifics being asked for or the approach the internal devs came up with not feasible. So basically they save paying the 3 of us about 1-2 hours every other week so we can spend roughly that long on every other story we do talking to people.
To be fair outsourcing your core platform to contractors who won't have to support it long term and know it is a pretty bad strategy, but sounds like dumber chasing dumb
For sure. It was a necessary evil and the roadmap had us going away from dependence but keeping it as a very effective upsell. They chopped it up a year before that would've happened. Edit: to add, it wasn't core to the product itself, but a complementary management and web interface. We had so many orgs asking for API dev support, I just productized it so no dev would be necessary to get the same benefit. we moonshotted because of this move, and fell like a sack of shit when it was prematurely killed.
> Lay off everyone the company hired during step 3. No. Lay off anyone in the top % of the pay bracket. By the time you're laying people off, you kissed any sort of concept of productivity goodbye anyway.
Good observation. Contrary to popular belief very few companies actually rely upon last in first out for layoffs unless it is unionized workforce. High earners on teams are frequently targeted. In addition, orgs may heavily eliminate roles in supporting products that the company sees little future.
'member when stock buybacks were illegal market manipulation? Pepperridge farm remembers.
Also alot of these companies grew during low interest rates and borrowing money was cheap. Now we are in a high interest rate environment so they have to cut cost
This is one of the larger reasons. Money has gotten more expensive. When money was cheap and the market was really booming these companies hired a lot of people because it was cheap and you didn’t want to get left behind when your competitors were hiring all of the talent.
Now that everyone is struggling it's safer to let people go since competition isn't hiring or is laying people off. I feel bad for the employees and wish there was a better way to help them transition to new careers.
A lot of these big tech companies have massive money in the bank. They can hold out without having to resort to laying people off (especially as layoffs are expensive) it's just greed
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For many it's also just normal to shed some people due to projects ending etc. These huge companies are packed with people that do nothing. Thousands of people that go to work and do fuck all.
Our economy is not designed to benefit the workers. Our economy is designed to maximize shareholder value.
Our corporations are designed to maximize shareholder value, whereas the economy itself is designed to drive debt and subsidize industry: mostly private defense contractors, gas and oil companies, home, auto, education loans, and a few others. You can change [or in some instances simply enforce] laws governing corporations, changing their incentive structures, without needing a new economy
You can… until enough lawmakers whore themselves out to said corporations.
Or, in some cases, quite literally were the same people who used to manage those corporations.
Yeah. I hope Ajit Pai has lifelong diarrhea.
Regulatory capture
And this only truly works when the WORKERS are the shareholders. And that’s just not the case anymore.
Was that ever really the case in the US? By many metrics average Americans have more stock ownership than past generations, but most stocks retail investors have no hope of having any meaningful influence. Collectively they own a relatively small percentage of the overall market and a significant percentage of their exposure to the market is in mutual funds or ETFs. There has been a resurgent interest in individual stocks among retail investors, but it still isn't a huge percentage of most average persons investments, which aren't a huge percentage of the market. Occasionally you might have some meme stocks that retail investors can temporarily pull up the valuation, but that's generally been rather short spanned and if the fundamentals are still garbage will eventually come back to earth once enough people decide to take profits or the news on the actual company as opposed to meme stock posts becomes so gloomy it is too hard to ignore. The only reason some of those meme stocks retail investors had much of any influence was that they had such relatively low market caps. You'll never realistically hear of a case of a notable meme stock trend makes waves on non small cap stocks.
The person you're responding to is talking about employee-owned companies, not retail investing. In general, I think the GME-driven obsession with retail investing is harmful (to the investors themselves). Considering almost all professional money managers underperform the S&P, I don't understand why we would want to encourage amateurs who know even less than them to gamble with their savings instead of just parking their money in a low-cost index fund.
No but we apes will moon any day now. We've been promising it for 3 years; certainly this week is the week.
Bingo! I’m pretty sick of people saying the economy is booming… it’s not for your every day American.
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Increase short term profit, only thing that counts.
When you are making such ridiculous profits and then place those profits above the human beings who made those profits possible, you start believing that with less people, you can make even more profits. It's a loop of ignorance and greed. Is that capitalism or pure greed? It's both.
Capitalism is the worship of greed
It's like everyone in these comments has a short term memory problem. It wasn't even a year ago that these companies were hiring 2-3 times as many people as they are currently laying off. Interest rates went up, investment revenue goes down. This isn't rocket science. When that happens it's time to trim the fat.
Yeah, this is definitely being overlooked in a lot of these discussions. Just as a frame of reference, while not a traditional tech company, Accenture does a load of consulting and work with the tech industry. Between August 2020 and March 2023 when they did their first layoff, Accenture hired 230,000 employees (globally). That's an average of 238 per day or 334 per weekday. That's a hiring rate that is difficult to even fathom. They did it to meet demand from their clients who were riding the wave of near-free loans. Then that money dried up and they had to cut 19,000 jobs. But even with the layoffs, they still hired 211,000 employees in the 2.5 years previous.
shame intelligent innate prick domineering crime continue shocking pet pathetic *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
I’ve been in this industry for decades. These cycles happen regularly, it’s best to keep an eye on your products’ profitability and where VC investment money is going and keep your skills up to date. Also invest in the market so you can reap the same rewards that investors do. Companies will snip entire product lines and let people go - they get sued less that way, so watch the reorgs so you don’t find yourself in the wrong group. If you smell blood in the water, it’s time to jump to the new department or job. My personal philosophy has always been to be somewhat flexible to location, so I can take advantage of opportunities all over the country. Good tech skills are somewhat rare, relative to the total workforce. So if people aren’t finding jobs it’s likely due to lack of flexibility.
Agreed. Tech companies never know how much to hire, they usually just follow the leaders. Is NVDA hiring because of? Better start hiring, we don't want to miss out. Is AAPL cutting staff? They must know something; get HR on the phone.
Layoffs in tech aren't a bell weather for anything. And navigating layoffs is a *totally normal* part of working in tech.
They just have to read the article (I know, tough) to see that the issue is exactly that. These companies hired massive amounts of people during the pandemic on huge salaries to do nothing.
Yea and meta for example has been having dozens of news stories about how tech workers there were getting paid 6 figures to twiddle their thumbs.
Cost of capital is too high. Projects are often financed by debt, and the risk is too high and margins too thin to justify the moonshot ideas of the past. Couple that with the relative high cost of tech employees, it’s not a winning formula. The only reason manufacturing is seeing a renaissance is because development costs are offset by local/state/federal subsidies.
Not to mention tech overhired during covid, which people here conveniently ignore. Tech still has substantially more employees than pre-covid.
Of course I have to scroll halfway down the thread to find the one helpful comment that answers the prompt correctly and succinctly
It's the only way to use Reddit when it comes to any discourse on anything related to the economy. Scroll past the first 10 most upvoted comments which are inevitably stupid, sarcastic, designed to titillate the dumb masses, and almost always wrong
"The economy is booming"- non working class people
The name of the game is capitalism and money is the only thing that matters.
If we use laws to regulate them thats immoral or something
Regulation is for communists don’tchaknow
> immoral No problem, that's why the corporations are writing the regulations
I'm in tech, so I can give some insight. First off, the tech industry overtired during the pandemic and interest rates were near zero, now that we're in a post pandemic world and interest rates are back up, companies are starting the cut the fat. Of course, they don't want to give up their PPP loans that were forgiven, so they're short staffing as much as they can while post ghost jobs or lowball offers that people won't take so they can claim "Well, we're hiring, but no one is taking any jobs." Also, "booming economy" usually means stock market gains and higher profits, not the regular workers.
Because they over-hired, product development teams have been made slower for it, and now that free money is gone, a bunch of wasteful projects inside companies are getting canned because they don’t add to the bottom line. It’s not that hard.
plus a lot of people got into "tech" by taking a six week coding boot camp during lockdown and write the kind of shitty code you expect from someone like that after a couple years of the senior devs doing the actual work some of these companies realized they had a lot of dead weight
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yep and even the article itself started off as bullshit a sales rep for ads - digital or otherwise - isn't a "tech" worker. that's a salesman who should be able to ply his trade in another industry because his skills are sales related, not technical a developer or network engineer working at a hospital is a tech worker even though they work in another industry. they're not healthcare workers just because their office is in the basement of a hospital FAANGs are either resume builders or gambles on the hope that they can stick around the 4 or 5 years necessary for the total compensation to actually hit. there are far more tech jobs outside of tech companies than inside of them
Because it's not booming. I'm a truck Driver. Freight is slow and has been for the last 6 months. Freight being slow means people aren't buying stuff. If the economy was booming people would have spare money to buy stuff. The cost for necessities like food and shelter is going up. While wages are going down. Even though the current administration says that inflation is down, reality shows otherwise. Just like the current administration says the economy is booming but reality shows otherwise.
Say it with me: short term profits over long term growth. That is the CEO mindset these days.
For many, the economy is not doing good. It’s too expensive to live for a lot of people right now. This article just feels out of touch in general.
Short term profits are more important.
To show shareholders that they are investing in AI. This means reallocation of resources that will accomplish two things: Focussed workforce and lower operating cost.
It's not booming and only media outlets with political motivations are claiming that it is. They are gaslighting the poor into thinking that if you don't feel normal right now, well you just must be a loser that doesn't make enough money. The simple fact is, everyone is living off of credit to make ends meet. as of August 2023, 44% of clothing is purchased with credit. 32% of health and beauty products, 27% of electronics, 25% of home furnishing, 28% of appliances. The list goes on and is between 20% to 50% of all normal purchases, regular people make, are bought on credit. And the Google trends for things like "how do I return a new car I bought" or "what happens if I don't pay my credit card" are skyrocketing.
Booming for who exactly
Based on Fed data, most people. Tech, banking, and consulting (often overrepresented on Reddit. Tech obviously overrepresented in this sub) just happen to be the places that are not booming. Though the biggest increases have largely gone to lower wage workers and wealthier asset owners. College educated white collar workers at the upper end of the income distribution have seen fewer gains outside of their asset portfolios (homes and investments). Unemployment (U-3) and Underemployment (U-6) rates are near all-time lows. Prime age (25-54) labor force participation is the highest it has been in a generation and near an all-time high. Median real (inflation adjusted) wages have been increasing steadily over the last 2 years and are firming above pre-pandemic levels. This is to say that median wages are consistently exceeding inflation again.
I was looking way too hard for someone poining out the bias in favour of tech here and on reddit generally.
"The US economy is booming" No the fuck it isn't. And I cannot get through your paywall nor do I need to with outright lies like that. You're shitting on the heads of the 70% of Americans who are struggling just as hard as during the pandemic. Stop using the dishonest U3 unemployment statistic. The economy is SICK. Inflation has way outpaced wages and people are poorer than ever. We are hitting record levels of suffering since we've been measuring this thing - most of it related to finances (we are tying levels that are the same as 2008 housing market PEAK levels, FFS). Our debts per household have skyrocketed hitting record numbers. **The economy is SICK**.
Yeah, I'm not sure what "average" person is doing well, nobody I know is. Everyone's wages are the same or haven't kept up with inflation. Maybe it's just my circle, but people aren't doing well. Showing a line going up isn't helping them.
Every day we have one of these stories and not one of them ever mentions that tech companies are still employing people and they never give the net employment numbers for the industry. That's massively dishonest and provides a warped view of what's happening in the market place.
I suspect because they largely run on credit which got more expensive in the last two years or so.
Honestly I think most tech companies had more programmers than they actually needed. You don't need a lot of programmers for a status quo. However this will definitely hinder innovation.
Literally just to please Wall Street and investors. They don't need to, they make huge profits, we are in a version of capitalism which is awful for workers, competitors, countries and their social law, a version that would make Adam Smith himself furious.
They over hired during the pandemic. Now nterest rates are high and money is expensive. Time to start cutting back.
Pandemic over hiring.
One of the big reasons is tax deduction changes. Tech companies used to be able to write off almost all comp related to software engineering and of this year they can’t. So costs went up dramatically. https://blog.pragmaticengineer.com/section-174/
It's booming, just not for the people who need it, namely workers.