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I think we've gotten into this weird spot where tech companies are almost goading each other into layoffs. I don't doubt that there was some overexpansion duri

I think we've gotten into this weird spot where tech companies are almost goading each other into layoffs. I don't doubt that there was some overexpansion during COVID, but it seems to have shifted. Tech companies have signaled to the market that staffing numbers were too high (regardless of profitability), and that investors want to see them brought back down. These layoffs don't really seem to be an indication of company strength, and the golden parachutes that a lot of these companies are offering can't really be that helpful to the bottom line (5mo + unused PTO + benefits in this case for Spotify). It's just playing things up for a certain audience while the general public is largely distracted.

cbm-vic-20 4y ago
If not goading, they're at least providing some cover for each other. If a company is looking to cut some percentage of staff, it's best to tuck that into the news cycle when many of your peers are doing the same thing.
tootie 4y ago
I think everyone trying to attribute some kind of 4D chess maneuvers to these actions is massively overestimating tech CEOs.
- ryandrake 4y ago
  A previous HN article called them "copycat layoffs"[1] which makes the most sense. This is reactive panic from "leaders" looking at each other for hints of what to do. A lot of companies determine their product and engineering strategies this way too. An exercise to the reader: Think about the major decisions your company has made since you've joined... How much of it was simply because competitors or bigger example companies were also doing it? EDIT: 1: https://news.ycombinator.com/item?id=34480314 https://news.ycombinator.com/item?id=34480314
- pm90 4y ago
  It’s not a deliberate plan but more like FOMO. It seems reasonable that execs hang out in similar social groups and have similar viewpoints and predictions. Once a specific idea has taken hold, company leadership has to either fight it or give in.
- ditonal 4y ago
  100% People regurgitate “they overhired during COVID and now they’re making the prudent decision to cut costs” The first part of the sentence implies poor decision making by weak leaders, so they lose the benefit of the doubt they’re capable of prudent decisions. You can’t have it both ways - they made a stupid copycat decision to overhire but now layoffs are smart and thoughtful. Occam’s razor - they made stupid copycat decisions both times because in both cases execs act with a herd mentality. I can’t tell you the number of times the “leaders” of big tech companies I’ve worked at cited decisions by researching “peer companies”. Management wants to self identify as leaders but their decision making is literally based on following the same decisions of other companies. They think “if company A is doing it, it must be smart “ the only problem is that the peer companies they’re copying are themselves copying others. All of these big tech companies have been overtaken by professional politicians incapable of leading , with perhaps Apple as the lone exception. This is a golden time to launch a startup as the big companies are putting their lunch money on the table and cowering in fear.
grey-area 4y ago
This is a bubble imploding, this is serious. The value of money has shifted for good after a decade of excess, there is rampant inflation and there is a recession incoming. These companies have seen the writing on the wall and are making the first of many layoffs to address this. This started last year and will last another year at least, possibly a few years. Apparently most eases of this sore are still in denial about it but the reasons are real and presssing. The other thing this paradigm shift in rates impacts of course is profitless startups which are now worth zero if they can’t turn a profit within a year. Those that can’t will go bust and lay off all employees, thus making the recession deeper.
- type-r 4y ago
  Why do you say it has shifted "for good"? The Fed itself plans to bring interest rates back down actually fairly quickly [0], following a half-year of decreasing inflation rates [1]. [0] https://www.federalreserve.gov/monetarypolicy/fomcprojtabl20221214.htm https://www.federalreserve.gov/monetarypolicy/fomcprojtabl20... [1] https://www.statista.com/statistics/273418/unadjusted-monthly-inflation-rate-in-the-us/ https://www.statista.com/statistics/273418/unadjusted-monthl...
  - grey-area 4y ago
    The Fed is infamous for being wrong, both in projections and in reactions. In fact a good case could be made for their policy mistakes leading them to this dilemma where they must choose between causing inflation or recession.
- SpeedilyDamage 4y ago
  My experiences around bubbles popping were substantially more violent and sudden. This feels a lot more like a normal ebb. I doubt this layoff trend continues past June, and other companies are still hiring.
- GaryNumanVevo 4y ago
  Okay but if that was true, these companies wouldn't also be issuing massive stock buybacks at the same time. It's normal ebb to someone with decades of time in the industry.
lamontcg 4y ago
> These layoffs don't really seem to be an indication of company strength They never were. I'm old and completely fucking puzzled by this assertion from Millennials that strong companies wouldn't do layoffs.

cbm-vic-20 4y ago

If not goading, they're at least providing some cover for each other. If a company is looking to cut some percentage of staff, it's best to tuck that into the news cycle when many of your peers are doing the same thing.

tootie 4y ago

I think everyone trying to attribute some kind of 4D chess maneuvers to these actions is massively overestimating tech CEOs.

ryandrake 4y ago
A previous HN article called them "copycat layoffs"[1] which makes the most sense. This is reactive panic from "leaders" looking at each other for hints of what to do. A lot of companies determine their product and engineering strategies this way too. An exercise to the reader: Think about the major decisions your company has made since you've joined... How much of it was simply because competitors or bigger example companies were also doing it? EDIT: 1: https://news.ycombinator.com/item?id=34480314 https://news.ycombinator.com/item?id=34480314
pm90 4y ago
It’s not a deliberate plan but more like FOMO. It seems reasonable that execs hang out in similar social groups and have similar viewpoints and predictions. Once a specific idea has taken hold, company leadership has to either fight it or give in.
ditonal 4y ago
100% People regurgitate “they overhired during COVID and now they’re making the prudent decision to cut costs” The first part of the sentence implies poor decision making by weak leaders, so they lose the benefit of the doubt they’re capable of prudent decisions. You can’t have it both ways - they made a stupid copycat decision to overhire but now layoffs are smart and thoughtful. Occam’s razor - they made stupid copycat decisions both times because in both cases execs act with a herd mentality. I can’t tell you the number of times the “leaders” of big tech companies I’ve worked at cited decisions by researching “peer companies”. Management wants to self identify as leaders but their decision making is literally based on following the same decisions of other companies. They think “if company A is doing it, it must be smart “ the only problem is that the peer companies they’re copying are themselves copying others. All of these big tech companies have been overtaken by professional politicians incapable of leading , with perhaps Apple as the lone exception. This is a golden time to launch a startup as the big companies are putting their lunch money on the table and cowering in fear.

grey-area 4y ago

This is a bubble imploding, this is serious. The value of money has shifted for good after a decade of excess, there is rampant inflation and there is a recession incoming. These companies have seen the writing on the wall and are making the first of many layoffs to address this. This started last year and will last another year at least, possibly a few years. Apparently most eases of this sore are still in denial about it but the reasons are real and presssing. The other thing this paradigm shift in rates impacts of course is profitless startups which are now worth zero if they can’t turn a profit within a year. Those that can’t will go bust and lay off all employees, thus making the recession deeper.

type-r 4y ago
Why do you say it has shifted "for good"? The Fed itself plans to bring interest rates back down actually fairly quickly [0], following a half-year of decreasing inflation rates [1]. [0] https://www.federalreserve.gov/monetarypolicy/fomcprojtabl20221214.htm https://www.federalreserve.gov/monetarypolicy/fomcprojtabl20... [1] https://www.statista.com/statistics/273418/unadjusted-monthly-inflation-rate-in-the-us/ https://www.statista.com/statistics/273418/unadjusted-monthl...
- grey-area 4y ago
  The Fed is infamous for being wrong, both in projections and in reactions. In fact a good case could be made for their policy mistakes leading them to this dilemma where they must choose between causing inflation or recession.
SpeedilyDamage 4y ago
My experiences around bubbles popping were substantially more violent and sudden. This feels a lot more like a normal ebb. I doubt this layoff trend continues past June, and other companies are still hiring.
GaryNumanVevo 4y ago
Okay but if that was true, these companies wouldn't also be issuing massive stock buybacks at the same time. It's normal ebb to someone with decades of time in the industry.

lamontcg 4y ago

> These layoffs don't really seem to be an indication of company strength They never were. I'm old and completely fucking puzzled by this assertion from Millennials that strong companies wouldn't do layoffs.