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I remember COVID when tech stocks shot right up, probably because everyone was stuck having to use tech and other companies looked in free fall Then COVID ende

I remember COVID when tech stocks shot right up, probably because everyone was stuck having to use tech and other companies looked in free fall Then COVID ended and now we’re going back to normal, and tech stocks are also going back to before If you change your lifestyle because you got a $100k windfall, you are going to realize that your income never changed. Companies that hired because they thought their COVID-inspired valuation was permanent were mistaken I’m currently working for a tech company that was negatively impacted by COVID, did not get a random influx of cash and so did not hire and so currently does not have to lay anyone off.

wyclif 4y ago
It's not so much COVID, it's that essentially what has happened is that the cheap VC investment and loan money dried up, as did the high valuations. That's the simple explanation.
- wintogreen74 4y ago
  It's been an entire generation of cheap or free credit. There are people who are now adults who have lived their entire lives well beyond their purchasing means because financing was close to zero, letting you live in a bigger house, drive a fancier car and all lifestyle aspects beyond what you could purchase outright. This is not a judgement call but just an observation, and now that interest rates have risen (quite modestly IMO) we're seeing the impact on just about everything. VC funding was not immune and despite the article downplaying cost savings, when employees are your major cost by a margin of 5-10x, lay-offs make an big impact on how long you can stay alive. The costs of lay-offs are overstated here based on my experiences on both sides of a lay-off.
  - Apocryphon 4y ago
    The article might be over-arguing that layoffs are always bad, but it definitely raises responses to the idea that layoffs are always a good tactic: > Layoffs often do not cut costs, as there are many instances of laid-off employees being hired back as contractors, with companies paying the contracting firm. [...] Companies sometimes lay off people that they have just recruited – oftentimes with paid recruitment bonuses. When the economy turns back in the next 12, 14, or 18 months, they will go back to the market and compete with the same companies to hire talent. They are basically buying labor at a high price and selling low. Not the best decision. Certainly it's a case-by-case basis, but I definitely remember companies such as Patreon doing layoffs in early 2020, only to be hiring again a few months later in the year.
- thrashh 4y ago
  I think COVID profits drove the hiring But it really comes down to the company. For example, Tesla’s valuation was probably more dependent on that kind of investment because their valuation was based on the idea that full self-driving AI was achievable. Whereas Google isn’t because no one is waiting for Google to do anything amazing But I pointed out COVID specifically because it seems tech companies overall benefited from the pandemic. Even I invested extra in tech companies during the pandemic because every other industry was physically being impacted by the virus. If everyone trips and falls during the race, you’ll get first place, but it wasn’t because you got any better. But wait long enough and everyone will catch up
mattgreenrocks 4y ago
The undercurrent of these discussions always bothers me. Wrong decisions are never made, they're always justified by current circumstances or hypothetical future circumstances. Past decisions were never wrong, either, even if current information shows them to be. (Who could have known?) 2021: "we have to overhire! The economy is great and otherwise we'll lose future talent!" 2022: "we have to fire! The economy isn't great and everyone else is firing!" (In writing this I realize the validity of said decision doesn't matter nearly as much as the perception of the person that made it. Much like Twitter, it isn't just what you say, it's who you are + what you say.)
- spacemadness 4y ago
  I remember people loudly exclaiming that people wouldn’t be buying Peletons once people started going back to gyms but the “who could have known?” sentiment appeared anyway after the stock had crashed.
  - linuxftw 4y ago
    I think Peletons were just a fad. Who wants an exercise bike with a monthly fee? That's a bad business model.
    - Domenic_S 4y ago
      NordicTrak is doing it too. Businesses love subscriptions, especially for one-time/infrequent purchases - if Sealy could come up with a mattress subscription model they would.
      - sokoloff 4y ago
        $19/mo: https://www.eightsleep.com/sleepos/ https://www.eightsleep.com/sleepos/ (YC-S15)
    - SoftTalker 4y ago
      Yep. Look at the fate of nearly every piece of home exercise equipment sold in the last 50 years. The vast majority fall into disuse pretty quickly. Who's going to want to keep paying a monthly fee for something they don't use? Hopefully it's easier to cancel than a gym membership.
homeland221 4y ago
If everything back to just before pandemic, Amazon has 160K of firing need to happen. Recent numbers are inadequate.
- r00fus 4y ago
  > If everything back to just before pandemic Of course this isn't the case, we're in 2022 and Amazon has expanded it's footprint. Your point is valid but the assumption is naive and incomplete.
- thrashh 4y ago
  current value = pre-pandemic value + actual growth + pandemic growth Just because pandemic growth is now 0 doesn’t mean Amazon didn’t have actual growth too

wyclif 4y ago

It's not so much COVID, it's that essentially what has happened is that the cheap VC investment and loan money dried up, as did the high valuations. That's the simple explanation.

wintogreen74 4y ago
It's been an entire generation of cheap or free credit. There are people who are now adults who have lived their entire lives well beyond their purchasing means because financing was close to zero, letting you live in a bigger house, drive a fancier car and all lifestyle aspects beyond what you could purchase outright. This is not a judgement call but just an observation, and now that interest rates have risen (quite modestly IMO) we're seeing the impact on just about everything. VC funding was not immune and despite the article downplaying cost savings, when employees are your major cost by a margin of 5-10x, lay-offs make an big impact on how long you can stay alive. The costs of lay-offs are overstated here based on my experiences on both sides of a lay-off.
- Apocryphon 4y ago
  The article might be over-arguing that layoffs are always bad, but it definitely raises responses to the idea that layoffs are always a good tactic: > Layoffs often do not cut costs, as there are many instances of laid-off employees being hired back as contractors, with companies paying the contracting firm. [...] Companies sometimes lay off people that they have just recruited – oftentimes with paid recruitment bonuses. When the economy turns back in the next 12, 14, or 18 months, they will go back to the market and compete with the same companies to hire talent. They are basically buying labor at a high price and selling low. Not the best decision. Certainly it's a case-by-case basis, but I definitely remember companies such as Patreon doing layoffs in early 2020, only to be hiring again a few months later in the year.
thrashh 4y ago
I think COVID profits drove the hiring But it really comes down to the company. For example, Tesla’s valuation was probably more dependent on that kind of investment because their valuation was based on the idea that full self-driving AI was achievable. Whereas Google isn’t because no one is waiting for Google to do anything amazing But I pointed out COVID specifically because it seems tech companies overall benefited from the pandemic. Even I invested extra in tech companies during the pandemic because every other industry was physically being impacted by the virus. If everyone trips and falls during the race, you’ll get first place, but it wasn’t because you got any better. But wait long enough and everyone will catch up

mattgreenrocks 4y ago

The undercurrent of these discussions always bothers me. Wrong decisions are never made, they're always justified by current circumstances or hypothetical future circumstances. Past decisions were never wrong, either, even if current information shows them to be. (Who could have known?) 2021: "we have to overhire! The economy is great and otherwise we'll lose future talent!" 2022: "we have to fire! The economy isn't great and everyone else is firing!" (In writing this I realize the validity of said decision doesn't matter nearly as much as the perception of the person that made it. Much like Twitter, it isn't just what you say, it's who you are + what you say.)

spacemadness 4y ago
I remember people loudly exclaiming that people wouldn’t be buying Peletons once people started going back to gyms but the “who could have known?” sentiment appeared anyway after the stock had crashed.
- linuxftw 4y ago
  I think Peletons were just a fad. Who wants an exercise bike with a monthly fee? That's a bad business model.
  - Domenic_S 4y ago
    NordicTrak is doing it too. Businesses love subscriptions, especially for one-time/infrequent purchases - if Sealy could come up with a mattress subscription model they would.
    - sokoloff 4y ago
      $19/mo: https://www.eightsleep.com/sleepos/ https://www.eightsleep.com/sleepos/ (YC-S15)
  - SoftTalker 4y ago
    Yep. Look at the fate of nearly every piece of home exercise equipment sold in the last 50 years. The vast majority fall into disuse pretty quickly. Who's going to want to keep paying a monthly fee for something they don't use? Hopefully it's easier to cancel than a gym membership.

homeland221 4y ago

If everything back to just before pandemic, Amazon has 160K of firing need to happen. Recent numbers are inadequate.

r00fus 4y ago
> If everything back to just before pandemic Of course this isn't the case, we're in 2022 and Amazon has expanded it's footprint. Your point is valid but the assumption is naive and incomplete.
thrashh 4y ago
current value = pre-pandemic value + actual growth + pandemic growth Just because pandemic growth is now 0 doesn’t mean Amazon didn’t have actual growth too