4 ms·

IMO there are two simple reasons: 1) Companies really, really don't want to be doing layoffs. It signals they are in a weak position. But when bunch of other c

IMO there are two simple reasons: 1) Companies really, really don't want to be doing layoffs. It signals they are in a weak position. But when bunch of other companies do this it becomes a much more available option as there is something to blame ("Recession!") 2) Companies compete fiercely and up until recently they tried to hire as much people as they could. But now they are finding they onboarded a lot of people and possibly a lot of people they do not want to have and became less efficient in the process. Normally, it is pretty difficult to fire people and it takes a long time and resources to get them on PIP and then push them out. But, hey, there is a faster solution -- just blame recession! I am looking closely at this recession as I am trying to navigate it financially and professionally and I came to conclusion that it is to a large extent fiction. It is mostly just a bunch of companies jumping on a bandwagon because it is convenient for them for one reason or another. There is no real underlying reason for all this. And if you are not convinced, other than couple tech companies that were just mismanaged and other than valuations, companies seem to be in a better shape overall than ever.

deleted 4y ago
[deleted]
shartshooter 4y ago
This is my perspective as well. Using Salesforce as an example(having cut 10% of their workforce just a week ago). Their Q3 2022 results - “We had a solid quarter with revenue of $7.84 billion, up 14% year-over-year or 19% growth in constant currency, and record operating margin,” said Marc Benioff, Chair & Co-CEO, Salesforce. - “We delivered another quarter of double-digit top and bottom line growth,” said Amy Weaver, President and CFO, Salesforce. In my opinion, they're laying folks off because they can conveniently get away with it without too much blowback. And best of all, their stock is up 6% in the past five days so the folks they're really catering to are happy as a clam.
explorer83 4y ago
I can confirm number 2 is extremely real.
r00fus 4y ago
> I am looking closely at this recession as I am trying to navigate it financially and professionally and I came to conclusion that it is to a large extent fiction The recession was essentially caused by the "OMG inflation!!" moves by the US Federal Reserve and companies just raising prices "because we can" while increasing massive profits. That it will result in millions of workers getting laid off & companies exiting the market doesn't even matter to those captains of industry & economy.
- adam_arthur 4y ago
  Yeah, we should pull a Turkey and cut rates instead! It's very clear from history that managing the economy with short sighted principles ends in poor outcomes. Too bad the Fed didn't consider this when they were doing QE and ZIRP for years too long. Now we pay the price of that short sighted failure
  - r00fus 4y ago
    Absolutely agree. The challenge is that increasing rates did nothing for e.g. home affordability. In fact, by increasing rates they caused builders to abandon some projects because they couldn't get funding. To do that, it would require congress to actually legislate or the exec branch to issue some executive orders that addressed market conditions like price gouging other than the big interest rates switch. ZIRP was a horrible policy and I'm glad it's not being continued.
    - adam_arthur 4y ago
      Home prices are in decline, and new home construction (SFH + MFH) is at an all time high (though dipped a bit recently). Rents are actually in deflation mode the past few months. If rates stay high, home prices will fall, absolutely. Unemployment will rise too. Agreed that congress can do more to help though. Incentives are poorly structured to promote housing affordability.
      - riku_iki 4y ago
theonething 4y ago
> Normally, it is pretty difficult to fire people I was under the impression that it's not too difficult, at will employment states like California.
- red-iron-pine 4y ago
  All states are "at will" except for Montana. And Montana isn't especially worker friendly, just not exactly "at will". It can be difficult to fire people in big layoffs because 1) you want to make sure they don't sabotage things (or just walk out with details that they didn't write down), and 2) because it's really easy to stumble into "protected class" issues, e.g. 10% of your workforce is POC but 30% of those laid off identified as POC, etc.
portpecos 4y ago
> Normally, it is pretty difficult to fire people How is it difficult to fire people? These tech companies are using at-will employment agreements. >In United States labor law, at-will employment is an employer's ability to dismiss an employee for any reason (that is, without having to establish "just cause" for termination), and without warning,[1] as long as the reason is not illegal (e.g. firing because of the employee's gender, sexual orientation, race, religion, or disability status). When an employee is acknowledged as being hired "at will", courts deny the employee any claim for loss resulting from the dismissal.

deleted 4y ago

[deleted]

shartshooter 4y ago

This is my perspective as well. Using Salesforce as an example(having cut 10% of their workforce just a week ago). Their Q3 2022 results - “We had a solid quarter with revenue of $7.84 billion, up 14% year-over-year or 19% growth in constant currency, and record operating margin,” said Marc Benioff, Chair & Co-CEO, Salesforce. - “We delivered another quarter of double-digit top and bottom line growth,” said Amy Weaver, President and CFO, Salesforce. In my opinion, they're laying folks off because they can conveniently get away with it without too much blowback. And best of all, their stock is up 6% in the past five days so the folks they're really catering to are happy as a clam.

explorer83 4y ago

I can confirm number 2 is extremely real.

r00fus 4y ago

> I am looking closely at this recession as I am trying to navigate it financially and professionally and I came to conclusion that it is to a large extent fiction The recession was essentially caused by the "OMG inflation!!" moves by the US Federal Reserve and companies just raising prices "because we can" while increasing massive profits. That it will result in millions of workers getting laid off & companies exiting the market doesn't even matter to those captains of industry & economy.

adam_arthur 4y ago
Yeah, we should pull a Turkey and cut rates instead! It's very clear from history that managing the economy with short sighted principles ends in poor outcomes. Too bad the Fed didn't consider this when they were doing QE and ZIRP for years too long. Now we pay the price of that short sighted failure
- r00fus 4y ago
  Absolutely agree. The challenge is that increasing rates did nothing for e.g. home affordability. In fact, by increasing rates they caused builders to abandon some projects because they couldn't get funding. To do that, it would require congress to actually legislate or the exec branch to issue some executive orders that addressed market conditions like price gouging other than the big interest rates switch. ZIRP was a horrible policy and I'm glad it's not being continued.
  - adam_arthur 4y ago
    Home prices are in decline, and new home construction (SFH + MFH) is at an all time high (though dipped a bit recently). Rents are actually in deflation mode the past few months. If rates stay high, home prices will fall, absolutely. Unemployment will rise too. Agreed that congress can do more to help though. Incentives are poorly structured to promote housing affordability.
    - riku_iki 4y ago

theonething 4y ago

> Normally, it is pretty difficult to fire people I was under the impression that it's not too difficult, at will employment states like California.

red-iron-pine 4y ago
All states are "at will" except for Montana. And Montana isn't especially worker friendly, just not exactly "at will". It can be difficult to fire people in big layoffs because 1) you want to make sure they don't sabotage things (or just walk out with details that they didn't write down), and 2) because it's really easy to stumble into "protected class" issues, e.g. 10% of your workforce is POC but 30% of those laid off identified as POC, etc.

portpecos 4y ago

> Normally, it is pretty difficult to fire people How is it difficult to fire people? These tech companies are using at-will employment agreements. >In United States labor law, at-will employment is an employer's ability to dismiss an employee for any reason (that is, without having to establish "just cause" for termination), and without warning,[1] as long as the reason is not illegal (e.g. firing because of the employee's gender, sexual orientation, race, religion, or disability status). When an employee is acknowledged as being hired "at will", courts deny the employee any claim for loss resulting from the dismissal.