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Irrespective of the real reason, I don't buy the argument that these companies are preempting a recession. Facebook, Amazon, Alphabet, Apple, Microsoft have an

Irrespective of the real reason, I don't buy the argument that these companies are preempting a recession. Facebook, Amazon, Alphabet, Apple, Microsoft have an insane volume of cash reserves to the tune of hundreds of billions each company. Unless their are predicting a decade long crisis there is no way this is the real reason staff is getting trimmed, feels more like an excuse rather than a justificatíon at this point.

jackmott42 4y ago
What is the distinction between excuse and justification for a public company? We always know their motive, which is to maximize profit. If they believe growth is going to slow/end, then it makes sense to slash some people. An occasional culling seems like a healthy thing for a huge company to do. If we knew how to predict future needs perfectly and how to hire quality people perfectly, then sure we could avoid this, but that is impossible.
- neon_electro 4y ago
  Can we acknowledge that predicting the future is impossible, AND that the over-hiring and over-confidence in the moves "a huge company" makes is unsustainable and ultimately makes these places less desirable to work at? I sure as hell am not applying to anywhere that had layoffs - I don't want to reward those places with my labor.
dcolkitt 4y ago
Even if your business is entirely unaffected a recession, it may still be sensible to do a light layoff before things turn. Especially if you've just gone through several years of an extremely tight labor market. The reality is most of the big tech companies have had to staff under pretty unfavorable conditions over the past few years. That's meant either scraping the bottom of the barrel in terms of the less talented. Or ballooning TC packages. If you think that all of a sudden it's going to become a buyer's market for employers, then you probably want to free up some spots today. Especially among your weakest performers or your most overpaid.
derefr 4y ago
Big public companies need an excuse to fire as many people as they would "naturally" want to fire given 1. just how many people they hire, 2. how often those people turn out to be duds, and 3. how often they pivot strategies internally that no longer necessitate even better-performing people. They can't normally fire as many people as they want to fire, without looking bad / "appearing weak" and therefore losing stock value. But if "everyone's doing it", then they won't look bad/weak. See also: raising prices. If one company does it, they just lose market-share. But if they do it because "everyone is doing it", then margins can go up vertical-wide without anyone having to explicitly collude in an anti-trust sense.
- UncleMeat 4y ago
  And yet, I'm looking at a team that was affected by layoffs where solid (or even high) performers were fired while also having been in meetings this week to discuss low performers who weren't fired. "Getting rid of duds" is clearly not what is happening, at least at Google.
  - cratermoon 4y ago
    Getting rid of high-earners is more correct. Among the highest earners, they pick the bottom 10% of the performers. Or do some MBA-ish cost/productivity calculations and lay off based on some (probably nonsensical, for programmers) "valuation".
    - UncleMeat 4y ago
      Also not what happened on my team. The system did not prioritize more senior vs more junior engineers (in terms of level). Nor did it prioritize people who had unusually large sign-on packages.
      - soupfordummies 4y ago
        So what do you think it was then? Just randomized?
s1artibartfast 4y ago
I don't see how you think those two facts are related to each other at all. What does cash on hand have to do with if a company truly believes in recession?
kypro 4y ago
For big tech it's 100% about managing cashflows to keep investors happy. While big tech companies can technically afford to over hire they are seeing slowing growth and a hit to their margins which investors have not and will not view favourably if unaddressed - just take a look at Facebook (META)'s stock. With the exception of Apple the big tech companies make most of their money from ads and cloud services. A lot of those ad dollars come from smaller business who are now struggling with higher rates and higher costs. Equally cloud services is taking a hit with many of the smaller tech companies who use their services cutting back in light of higher costs of capital and declining market valuations. While they might all have the cash to weather the storm, why would they when they can just cut some of the fat? I don't like seeing these layoff announcements, but I think if we're honest companies like Facebook and Google have been over hiring for years and have accumulated teams and employees who aren't adding much productive value. Twitter probably isn't the exception in tech. I'd guess most tech companies could cut 50% of their workforce without much of an impact. And even in the average software development team I'd guess that 20% of the workers are contributing 50% of the value. If there's no incentive to keep these people around anymore, why would they?
ulfw 4y ago
Exactly this. Good talent is hard to hire. These company have more cash than brains or ideas. So even if there's a recession, a few months/quarters means nothing considering their war chest. And it's not worth firing people in January if you need them again in October.

jackmott42 4y ago

What is the distinction between excuse and justification for a public company? We always know their motive, which is to maximize profit. If they believe growth is going to slow/end, then it makes sense to slash some people. An occasional culling seems like a healthy thing for a huge company to do. If we knew how to predict future needs perfectly and how to hire quality people perfectly, then sure we could avoid this, but that is impossible.

neon_electro 4y ago
Can we acknowledge that predicting the future is impossible, AND that the over-hiring and over-confidence in the moves "a huge company" makes is unsustainable and ultimately makes these places less desirable to work at? I sure as hell am not applying to anywhere that had layoffs - I don't want to reward those places with my labor.

dcolkitt 4y ago

Even if your business is entirely unaffected a recession, it may still be sensible to do a light layoff before things turn. Especially if you've just gone through several years of an extremely tight labor market. The reality is most of the big tech companies have had to staff under pretty unfavorable conditions over the past few years. That's meant either scraping the bottom of the barrel in terms of the less talented. Or ballooning TC packages. If you think that all of a sudden it's going to become a buyer's market for employers, then you probably want to free up some spots today. Especially among your weakest performers or your most overpaid.

derefr 4y ago

Big public companies need an excuse to fire as many people as they would "naturally" want to fire given 1. just how many people they hire, 2. how often those people turn out to be duds, and 3. how often they pivot strategies internally that no longer necessitate even better-performing people. They can't normally fire as many people as they want to fire, without looking bad / "appearing weak" and therefore losing stock value. But if "everyone's doing it", then they won't look bad/weak. See also: raising prices. If one company does it, they just lose market-share. But if they do it because "everyone is doing it", then margins can go up vertical-wide without anyone having to explicitly collude in an anti-trust sense.

UncleMeat 4y ago
And yet, I'm looking at a team that was affected by layoffs where solid (or even high) performers were fired while also having been in meetings this week to discuss low performers who weren't fired. "Getting rid of duds" is clearly not what is happening, at least at Google.
- cratermoon 4y ago
  Getting rid of high-earners is more correct. Among the highest earners, they pick the bottom 10% of the performers. Or do some MBA-ish cost/productivity calculations and lay off based on some (probably nonsensical, for programmers) "valuation".
  - UncleMeat 4y ago
    Also not what happened on my team. The system did not prioritize more senior vs more junior engineers (in terms of level). Nor did it prioritize people who had unusually large sign-on packages.
    - soupfordummies 4y ago
      So what do you think it was then? Just randomized?

s1artibartfast 4y ago

I don't see how you think those two facts are related to each other at all. What does cash on hand have to do with if a company truly believes in recession?

kypro 4y ago

For big tech it's 100% about managing cashflows to keep investors happy. While big tech companies can technically afford to over hire they are seeing slowing growth and a hit to their margins which investors have not and will not view favourably if unaddressed - just take a look at Facebook (META)'s stock. With the exception of Apple the big tech companies make most of their money from ads and cloud services. A lot of those ad dollars come from smaller business who are now struggling with higher rates and higher costs. Equally cloud services is taking a hit with many of the smaller tech companies who use their services cutting back in light of higher costs of capital and declining market valuations. While they might all have the cash to weather the storm, why would they when they can just cut some of the fat? I don't like seeing these layoff announcements, but I think if we're honest companies like Facebook and Google have been over hiring for years and have accumulated teams and employees who aren't adding much productive value. Twitter probably isn't the exception in tech. I'd guess most tech companies could cut 50% of their workforce without much of an impact. And even in the average software development team I'd guess that 20% of the workers are contributing 50% of the value. If there's no incentive to keep these people around anymore, why would they?

ulfw 4y ago

Exactly this. Good talent is hard to hire. These company have more cash than brains or ideas. So even if there's a recession, a few months/quarters means nothing considering their war chest. And it's not worth firing people in January if you need them again in October.