6 ms·

All this panic about tech layoffs seems a little premature given we haven’t even begun to see the impact of rates hikes on quarterly earnings yet. Many companie

All this panic about tech layoffs seems a little premature given we haven’t even begun to see the impact of rates hikes on quarterly earnings yet. Many companies still have open recs and budgets to keep hiring. I work at a company that just laid off 18% of the workforce (Coinbase) including many people in engineering. The day this happened my email, LinkedIn, Twitter inboxes exploded with companies asking me if I knew of anyone looking for a job or if I myself had been impacted. I reached out to many of my former colleagues who had been impacted to see if they needed help. All had multiple interviews in flight and were not having trouble finding jobs. Aside from many crypto companies the inbound jobs were from many public and private companies and spanned many industries. I expect tech layoffs to get worse and the white collar job market to tighten towards the end of this year and 2023. I expect the main driver for this will be cost reduction at public and private companies in the lead up to earnings or quarterly reports. Main cost for a tech company obviously being labor.

hn_throwaway_99 4y ago
The thing that seems so weird to me about the current state of the economy is that you have lots of "smart people" shouting pretty loudly "A recession is coming! Is going to be bad! We may already be in one!!" I don't remember any recession - not the early 90s recession, not the .com bust, not the Great Recession - having anywhere near so much foreshadowing. Sure, there were people during the .com boom saying "Umm, you know, 'eyeballs' don't pay the bills and at some point you need to actually make money" and during the 00s housing bubble "I'm not even sure lenders are using the 'can you fog a mirror' test anymore when making loans", but it wasn't particularly widespread, and large sections of the economic and policy elite actively downplayed the possibility of recession. Now though, I see the exact opposite. Tech moguls, central bankers, VCs, etc. etc. have been warning "this is going to be really bad" now for months. But, in actuality, it's not that bad (yet). Yes, inflation is really bad, but unemployment was 3.6% in May. It still feels like many companies are having a very difficult time hiring and keeping workers. So why the difference? I don't want to go into "conspiracy theory territory", but I do think it's pretty undeniable that there is a marked difference in "warning levels" between the current time and recessions in the past 40 years.
- tootie 4y ago
  I think you're misremembering. The 2001 and 2007 crashes were very widely foretold. The current recession risk concensus seems pretty weak to me right now. That's just perception but the popular joke goes something like "economists have predicted 8 of the last 3 recessions". The risk of an unexpected recession is much worse than a warning that doesn't come true so warnings are always pessimistic. Risk right now still feels 50/50. The next CPI report after the major Fed action will be watched very closely.
  - hn_throwaway_99 4y ago
    > I think you're misremembering. The 2001 and 2007 crashes were very widely foretold. Hard disagree, at least by what I said in my comment about what "widely foretold" meant. I mean, the IMDB opening description of The Big Short starts with "When four outsiders saw what the big banks, media and government refused to..." Michael Burry, https://en.wikipedia.org/wiki/Michael_Burry https://en.wikipedia.org/wiki/Michael_Burry, famously said he wasn't a super genius or anything, and was surprised that so few other folks saw the coming housing collapse like he did. Again, my point is not that nobody could foresee that the recessions were coming, it's that the institutional "powers that be" - government, large corporations, VCs, etc. - actively downplayed the risk of recession. The exact opposite is happening now.
    - tootie 4y ago
      JP Morgan navigated the 2007 crisis and came out on top. They're saying recession risk is 50/50 and the S&P will end up positive for the year. There were definitely a lot of people in power and especially policy makers who put their own interests ahead of what the data tells them. Burry is also a shameless self-promoter who has predicted a lot of disasters that haven't happened including WW3 a few years ago. There's like a dozen people who have made careers out of claiming to be the only ones that predicted the 2007 recession. If you keep predicting recessions you're bound to be right. In reality, it's just not possible to predict accurately. Here's Krugman in late 2006 presenting the data and putting the recession risk for 2007 at 2:1 https://www.nytimes.com/2006/12/01/opinion/01krugman.html https://www.nytimes.com/2006/12/01/opinion/01krugman.html Right now there are several indicators flashing and a lot that aren't. Technical data like P/E ratios, volatility, yield curves are great at predicting things that happened in the past but they just can't be relied on as being infallible.
deleted 4y ago
[deleted]
atwood22 4y ago
Didn’t Coinbase cut its marketing budget? Advertising companies are going to feel that trend immediately, even if the quarterly numbers aren’t out yet.
marto1 4y ago
> All this panic about tech layoffs seems a little premature given we haven’t even begun to see the impact of rates hikes on quarterly earnings yet. Many companies still have open recs and budgets to keep hiring. I think that's the main point. Tech is going nowhere, it's crucial for the future for most countries around the globe.

hn_throwaway_99 4y ago

The thing that seems so weird to me about the current state of the economy is that you have lots of "smart people" shouting pretty loudly "A recession is coming! Is going to be bad! We may already be in one!!" I don't remember any recession - not the early 90s recession, not the .com bust, not the Great Recession - having anywhere near so much foreshadowing. Sure, there were people during the .com boom saying "Umm, you know, 'eyeballs' don't pay the bills and at some point you need to actually make money" and during the 00s housing bubble "I'm not even sure lenders are using the 'can you fog a mirror' test anymore when making loans", but it wasn't particularly widespread, and large sections of the economic and policy elite actively downplayed the possibility of recession. Now though, I see the exact opposite. Tech moguls, central bankers, VCs, etc. etc. have been warning "this is going to be really bad" now for months. But, in actuality, it's not that bad (yet). Yes, inflation is really bad, but unemployment was 3.6% in May. It still feels like many companies are having a very difficult time hiring and keeping workers. So why the difference? I don't want to go into "conspiracy theory territory", but I do think it's pretty undeniable that there is a marked difference in "warning levels" between the current time and recessions in the past 40 years.

tootie 4y ago
I think you're misremembering. The 2001 and 2007 crashes were very widely foretold. The current recession risk concensus seems pretty weak to me right now. That's just perception but the popular joke goes something like "economists have predicted 8 of the last 3 recessions". The risk of an unexpected recession is much worse than a warning that doesn't come true so warnings are always pessimistic. Risk right now still feels 50/50. The next CPI report after the major Fed action will be watched very closely.
- hn_throwaway_99 4y ago
  > I think you're misremembering. The 2001 and 2007 crashes were very widely foretold. Hard disagree, at least by what I said in my comment about what "widely foretold" meant. I mean, the IMDB opening description of The Big Short starts with "When four outsiders saw what the big banks, media and government refused to..." Michael Burry, https://en.wikipedia.org/wiki/Michael_Burry https://en.wikipedia.org/wiki/Michael_Burry, famously said he wasn't a super genius or anything, and was surprised that so few other folks saw the coming housing collapse like he did. Again, my point is not that nobody could foresee that the recessions were coming, it's that the institutional "powers that be" - government, large corporations, VCs, etc. - actively downplayed the risk of recession. The exact opposite is happening now.
  - tootie 4y ago
    JP Morgan navigated the 2007 crisis and came out on top. They're saying recession risk is 50/50 and the S&P will end up positive for the year. There were definitely a lot of people in power and especially policy makers who put their own interests ahead of what the data tells them. Burry is also a shameless self-promoter who has predicted a lot of disasters that haven't happened including WW3 a few years ago. There's like a dozen people who have made careers out of claiming to be the only ones that predicted the 2007 recession. If you keep predicting recessions you're bound to be right. In reality, it's just not possible to predict accurately. Here's Krugman in late 2006 presenting the data and putting the recession risk for 2007 at 2:1 https://www.nytimes.com/2006/12/01/opinion/01krugman.html https://www.nytimes.com/2006/12/01/opinion/01krugman.html Right now there are several indicators flashing and a lot that aren't. Technical data like P/E ratios, volatility, yield curves are great at predicting things that happened in the past but they just can't be relied on as being infallible.

deleted 4y ago

[deleted]

atwood22 4y ago

Didn’t Coinbase cut its marketing budget? Advertising companies are going to feel that trend immediately, even if the quarterly numbers aren’t out yet.

marto1 4y ago

> All this panic about tech layoffs seems a little premature given we haven’t even begun to see the impact of rates hikes on quarterly earnings yet. Many companies still have open recs and budgets to keep hiring. I think that's the main point. Tech is going nowhere, it's crucial for the future for most countries around the globe.