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Am I oversimplifying, or are the layoffs more of a predictable function of correcting for zero interest money without fear of employment lawsuits? Money was fr

Am I oversimplifying, or are the layoffs more of a predictable function of correcting for zero interest money without fear of employment lawsuits? Money was free (zero interest) during covid. Most tech companies increased staff to keep pace with each other. A lot of these hires were in support staff and junior positions needed to support low acquisition costs of new customers. Now that interest rates went up and growth stalled, companies are trimming both unprofitable customers and excess staff. Essentially, the CEOs get a free pass to fire people without risk of employment contract lawsuits. From founder friends of private companies, the initial wave of layoffs during early days of covid was a godsend of sorts. It allowed them to fire problematic employees without needing to go through protracted performance reviews. Then they hired new people using cheap loans 6 months later. Now they're correcting again with layoffs, keeping top performers, and shifting staff over to high leverage projects like AI. The short of it... did CEOs really make any significant mistakes? Or did they just take advantage of the market conditions in predictable ways? i.e. They did their jobs as it's currently incentivized. I'm not saying it's ethical to mass hire and fire. And I certainly empathize with the people who've been laid off. But perhaps it's a more accurate depiction to say the current layoffs are part of a larger strategy to reduce staff and increase bottom line in preparation for AI acquisitions. It's not a correction but a significant reshaping of tech labor force as a whole.

thinknubpad 4y ago
I see the lack of accountability in this spree of layoffs as being similar to the lack of accountability in the recent automotive chip shortage. Tell me if this sounds familiar: When the pandemic hit, car manufacturers saw travel plummet and decided that car sales would also plummet for the foreseeable future. The executives in charge of the auto manufacturers responded by cancelling huge swaths of orders with their suppliers, believing that the new market conditions would be persistent. 18 months later, with vaccines arriving, demand for cars spikes. Auto manufacturers panic, and rush to place new orders with their foundries, who found new customers and now have 24-month lead times. The MBAs shrug and say that there is no way anybody could have predicted this: after all, their competitors are in the same boat. They jack up prices and reap the rewards of their poor decision making, but the company and consumers would both be in a much better position if the executives had done their job properly instead of hammering the panic button. Maybe this lack of accountability at the top is a deeper, more systemic issue.
alldayeveryday 4y ago
> The short of it... did CEOs really make any significant mistakes? Or did they just take advantage of the market conditions in predictable ways? i.e. They did their jobs as it's currently incentivized. Agreed with your argument, and taking it a step further, not only did they take advantage of the market conditions, they were forced to do so or face getting fired themselves. When your competitor is rapidly expanding, and/or you are not showing the revenue growth that the market is awarding, you get the boot.
notinfuriated 4y ago
> I'm not saying it's ethical to mass hire and fire. Agreed, although I don't suppose I'll ever see a post on HN with people angrily calling for the firing of Tech CEOs for hiring too many people at potentially higher salaries than their "worth" to the rest of the market.
roncesvalles 4y ago
The interest rate argument is nonsensical and parroted by armchair experts. Barring a few atypical exceptions like IBM, Big Tech companies don't borrow money to grow.

thinknubpad 4y ago

I see the lack of accountability in this spree of layoffs as being similar to the lack of accountability in the recent automotive chip shortage. Tell me if this sounds familiar: When the pandemic hit, car manufacturers saw travel plummet and decided that car sales would also plummet for the foreseeable future. The executives in charge of the auto manufacturers responded by cancelling huge swaths of orders with their suppliers, believing that the new market conditions would be persistent. 18 months later, with vaccines arriving, demand for cars spikes. Auto manufacturers panic, and rush to place new orders with their foundries, who found new customers and now have 24-month lead times. The MBAs shrug and say that there is no way anybody could have predicted this: after all, their competitors are in the same boat. They jack up prices and reap the rewards of their poor decision making, but the company and consumers would both be in a much better position if the executives had done their job properly instead of hammering the panic button. Maybe this lack of accountability at the top is a deeper, more systemic issue.

alldayeveryday 4y ago

> The short of it... did CEOs really make any significant mistakes? Or did they just take advantage of the market conditions in predictable ways? i.e. They did their jobs as it's currently incentivized. Agreed with your argument, and taking it a step further, not only did they take advantage of the market conditions, they were forced to do so or face getting fired themselves. When your competitor is rapidly expanding, and/or you are not showing the revenue growth that the market is awarding, you get the boot.

notinfuriated 4y ago

> I'm not saying it's ethical to mass hire and fire. Agreed, although I don't suppose I'll ever see a post on HN with people angrily calling for the firing of Tech CEOs for hiring too many people at potentially higher salaries than their "worth" to the rest of the market.

roncesvalles 4y ago

The interest rate argument is nonsensical and parroted by armchair experts. Barring a few atypical exceptions like IBM, Big Tech companies don't borrow money to grow.