4 ms·

Does this signal the start of something like a recession in tech?

wpietri 6y ago
With the scale of the recession in the rest of the economy, it's certain that we'll feel in in tech. Maybe less, in that it's easier for us to work and deliver value at at a distance. But perhaps more, in that a lot of what we do is an investment, and recessions aren't a great time to be investing. A lot of software's value is essentially in reducing the cost of labor to achieve some result. But with the unemployment rate going from historic lows of ~4% to somewhere around 20% [1], reducing labor costs is less urgent. [1] https://www.marketwatch.com/story/millions-of-lost-jobs-may-push-unemployment-rate-to-highest-since-great-depression-2020-05-02 https://www.marketwatch.com/story/millions-of-lost-jobs-may-...
- rswail 6y ago
  Reducing labor costs will remain as urgent because companies have to deal with a very low demand. So they will layoff and automate. It will accelerate automation. What's needed is demand, the way for that to happen is for government to pay for things and to create jobs.
  - wpietri 6y ago
    I suspect it depends a lot on the employer. Fewer will go out and hire (expensive) software engineers as part of a long-term project to (hopefully) decrease labor costs. Some still will, but lower capital availability and increased uncertainty means a lot of things seen as long-term investments will get put off until things are clearer.
- asdff 6y ago
  It doesn't matter that you can work remote if the vast majority of the population has no disposable income to buy your product or service.
techslave 6y ago
you mean more than the 50% drop in uber’s market cap since feb?
- criddell 6y ago
  I just looked and Uber is still worth $47 billion. That seems absurd to me.
  - dredds 6y ago
    At least they don't have to fire 1 million. https://www.youtube.com/watch?v=r0mO6UY6uTg https://www.youtube.com/watch?v=r0mO6UY6uTg
mrweasel 6y ago
It seems to depend on what you're doing. Microsoft and Amazon (In this case the AWS part) both seems to do very well. Video conferencing, med-tech, hosting and many others are doing very well. If you drive taxis, like Uber, then you're perhaps not going to do well.
- dredds 6y ago
  Indeed. MS just announced building a new datacenter in NZ (which happens to be close to eradicating CV'19 given it's geography) so expansion even during a global crisis is certainly possible. https://www.stuff.co.nz/business/121422743/microsofts-significant-investment-shows-faith-in-nzs-digital-future https://www.stuff.co.nz/business/121422743/microsofts-signif...
  - dehrmann 6y ago
    I've pointed it out elsewhere, but the places that have been best at eradicating it have been islands. NZ, Australia, Hong Kong, Taiwan, Singapore, Japan. I suppose South Korea is is effectively an island.
Nasrudith 6y ago
Define tech. It is more for any "service or travel sector touching" company essentially that is getting hit. Direct software related companies are nearly immune.

With the scale of the recession in the rest of the economy, it's certain that we'll feel in in tech. Maybe less, in that it's easier for us to work and deliver value at at a distance. But perhaps more, in that a lot of what we do is an investment, and recessions aren't a great time to be investing. A lot of software's value is essentially in reducing the cost of labor to achieve some result. But with the unemployment rate going from historic lows of ~4% to somewhere around 20% [1], reducing labor costs is less urgent. [1] https://www.marketwatch.com/story/millions-of-lost-jobs-may-push-unemployment-rate-to-highest-since-great-depression-2020-05-02 https://www.marketwatch.com/story/millions-of-lost-jobs-may-...

rswail 6y ago
Reducing labor costs will remain as urgent because companies have to deal with a very low demand. So they will layoff and automate. It will accelerate automation. What's needed is demand, the way for that to happen is for government to pay for things and to create jobs.
- wpietri 6y ago
  I suspect it depends a lot on the employer. Fewer will go out and hire (expensive) software engineers as part of a long-term project to (hopefully) decrease labor costs. Some still will, but lower capital availability and increased uncertainty means a lot of things seen as long-term investments will get put off until things are clearer.
asdff 6y ago
It doesn't matter that you can work remote if the vast majority of the population has no disposable income to buy your product or service.

techslave 6y ago

you mean more than the 50% drop in uber’s market cap since feb?

criddell 6y ago
I just looked and Uber is still worth $47 billion. That seems absurd to me.
- dredds 6y ago
  At least they don't have to fire 1 million. https://www.youtube.com/watch?v=r0mO6UY6uTg https://www.youtube.com/watch?v=r0mO6UY6uTg

mrweasel 6y ago

It seems to depend on what you're doing. Microsoft and Amazon (In this case the AWS part) both seems to do very well. Video conferencing, med-tech, hosting and many others are doing very well. If you drive taxis, like Uber, then you're perhaps not going to do well.

dredds 6y ago
Indeed. MS just announced building a new datacenter in NZ (which happens to be close to eradicating CV'19 given it's geography) so expansion even during a global crisis is certainly possible. https://www.stuff.co.nz/business/121422743/microsofts-significant-investment-shows-faith-in-nzs-digital-future https://www.stuff.co.nz/business/121422743/microsofts-signif...
- dehrmann 6y ago
  I've pointed it out elsewhere, but the places that have been best at eradicating it have been islands. NZ, Australia, Hong Kong, Taiwan, Singapore, Japan. I suppose South Korea is is effectively an island.

Nasrudith 6y ago

Define tech. It is more for any "service or travel sector touching" company essentially that is getting hit. Direct software related companies are nearly immune.