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What makes you think it was a mistake? Could very well have been planned. "Lets hire like crazy in order to meet demand, and when the demand disappears again, d

What makes you think it was a mistake? Could very well have been planned. "Lets hire like crazy in order to meet demand, and when the demand disappears again, do layoffs". Probably someone calculated something somewhere saying "If we hire 25% more people to take advantage of the increased demand, we'll earn more profits even with layoffs with heavy severances for everyone after X months".

chasd00 4y ago
well... I guess.tiff, i mean that could very well have been it. idk it just seems like a terribly bad business decision by the whole industry. If it was a capacity thing then adding headcount would decrease capacity for at least a year or so as you have to integrate all those people into culture and work to get things productive. On the other hand, I can see a "turn the knob up, then turn the knob down" strategy making sense to some people.
- capableweb 4y ago
  > On the other hand, I can see a "turn the knob up, then turn the knob down" strategy making sense to some people. Especially when the company culture basically boils down to "The individual employee is worth nothing" and "People should be able to be fired as easily as they are hired", which Amazon seems to be, at least judging by the people I've been close to who worked at Amazon.
mc32 4y ago
One alternative is where companies did not hire 25% to meet pandemic demand and many of those had to take lesser jobs or no job at all.
taffer 4y ago
As another commenter said, employees have been hired in corporate and technical roles that require training to become productive. Hiring is expensive, especially in technical areas, training is expensive and takes a lot of time, severance packages are expensive. The layoffs strike me as damage control rather than a well-calculated business move.
Retric 4y ago
Amazon is letting go 1% of it’s workforce, that’s hardly a 25% bump from COVID. It’s just normal restricting making headlines because of their size.
- capableweb 4y ago
  If such conversation occurred, it was probably worded way different than my quickly thrown together example, where the number was just something I pulled out of my ass, just like the imaginary conversation.
hgsgm 4y ago
There was no demand, though, not for these roles. These companies already know how to hire temp contractors, which is cheaper and cleaners than layoffs with severance. The real answer is that they pretended the Covid money fountain wouldn't end.
P_I_Staker 4y ago
There's a more simple explanation. Companies were hiring because they thought they were gearing up for a bunch of work and that there was gonna be a war for talent. I could be wrong, but at least Zuck seemed like a true believer in what he was doing; is there anyone that questions his over attachment to the Metaverse? (I understand he may have known this was a risk; possibly other execs were more aware, and looking forward to it). More to the point, it seems that companies were hiring because other companies were too. They didn't want to miss out on the party. Not an economist, but you see this behavior all the the time in markets. Then after the euphoria wears off they notice: 1. Ditching a lot of unprofitable segments starts to look attractive. The chance for growth could be pretty slim, especially in a slow market. 2. Some of these people are raking in massive salaries for jobs they could get anyone in to do. It looked to many people like the strategy was to buy up people to keep them off the market... not shocking to see the change in heart, which lead to: 3. All these activities were giving employees quite a bit of leverage, and potentially calling into question any managers that might have had "hold down the fort" roles. I remember having these conversations last summer. It wasn't 100% clear what was going to happen, but this wouldn't have been surprising; people knew. They did about the housing crash, too. It's popular to act like this was discovered by a lone genius, who goes against the crowd. My dad with no connections and basic financial literacy, with some eyes on real estate, predicted this since around 2000-2004. I remember growing up and hearing about the certain housing crash that was coming that was so obvious anyone could see it. (sure some specific points of failure may not have been obvious, but we knew what was going to happen)

chasd00 4y ago

well... I guess.tiff, i mean that could very well have been it. idk it just seems like a terribly bad business decision by the whole industry. If it was a capacity thing then adding headcount would decrease capacity for at least a year or so as you have to integrate all those people into culture and work to get things productive. On the other hand, I can see a "turn the knob up, then turn the knob down" strategy making sense to some people.

capableweb 4y ago
> On the other hand, I can see a "turn the knob up, then turn the knob down" strategy making sense to some people. Especially when the company culture basically boils down to "The individual employee is worth nothing" and "People should be able to be fired as easily as they are hired", which Amazon seems to be, at least judging by the people I've been close to who worked at Amazon.

mc32 4y ago

One alternative is where companies did not hire 25% to meet pandemic demand and many of those had to take lesser jobs or no job at all.

taffer 4y ago

As another commenter said, employees have been hired in corporate and technical roles that require training to become productive. Hiring is expensive, especially in technical areas, training is expensive and takes a lot of time, severance packages are expensive. The layoffs strike me as damage control rather than a well-calculated business move.

Retric 4y ago

Amazon is letting go 1% of it’s workforce, that’s hardly a 25% bump from COVID. It’s just normal restricting making headlines because of their size.

capableweb 4y ago
If such conversation occurred, it was probably worded way different than my quickly thrown together example, where the number was just something I pulled out of my ass, just like the imaginary conversation.

hgsgm 4y ago

There was no demand, though, not for these roles. These companies already know how to hire temp contractors, which is cheaper and cleaners than layoffs with severance. The real answer is that they pretended the Covid money fountain wouldn't end.

P_I_Staker 4y ago

There's a more simple explanation. Companies were hiring because they thought they were gearing up for a bunch of work and that there was gonna be a war for talent. I could be wrong, but at least Zuck seemed like a true believer in what he was doing; is there anyone that questions his over attachment to the Metaverse? (I understand he may have known this was a risk; possibly other execs were more aware, and looking forward to it). More to the point, it seems that companies were hiring because other companies were too. They didn't want to miss out on the party. Not an economist, but you see this behavior all the the time in markets. Then after the euphoria wears off they notice: 1. Ditching a lot of unprofitable segments starts to look attractive. The chance for growth could be pretty slim, especially in a slow market. 2. Some of these people are raking in massive salaries for jobs they could get anyone in to do. It looked to many people like the strategy was to buy up people to keep them off the market... not shocking to see the change in heart, which lead to: 3. All these activities were giving employees quite a bit of leverage, and potentially calling into question any managers that might have had "hold down the fort" roles. I remember having these conversations last summer. It wasn't 100% clear what was going to happen, but this wouldn't have been surprising; people knew. They did about the housing crash, too. It's popular to act like this was discovered by a lone genius, who goes against the crowd. My dad with no connections and basic financial literacy, with some eyes on real estate, predicted this since around 2000-2004. I remember growing up and hearing about the certain housing crash that was coming that was so obvious anyone could see it. (sure some specific points of failure may not have been obvious, but we knew what was going to happen)