6 ms·

Apple's underlying economics haven't changed, so they have not had any reason to over-hire in the first place. Amazon, Google, Meta, Shopify and others are all

by mabbo 4y ago

Apple's underlying economics haven't changed, so they have not had any reason to over-hire in the first place. Amazon, Google, Meta, Shopify and others are all e-commerce based. There was a clear trend that e-commerce had shifted up due to the pandemic, and looked to be permanent. That bet was wrong, so they all had layoffs. Other companies were willing to hire lots of developers because the ROI on devs was good compared to low inflation and low interest rates. Then both of those things changed, so the ROI on a dev compared to investing in other things became much worse- so there's less money for developers. Meanwhile, Apple has a mostly-stable massive chunk of the consumer device market and has always had a profit margin that is startlingly high. Not much has changed as far as they're concerned.

lapcat 4y ago
> Meanwhile, Apple has a mostly-stable massive chunk of the consumer device market and has always had a profit margin that is startlingly high. Not much has changed as far as they're concerned. Apple had a big bump in pandemic-related revenue too, inspired by mass WFH hardware purchases. And now Apple revenue has gone down as well: https://sixcolors.com/post/2023/02/apple-results-and-charts-117-2b-quarter-is-still-a-step-back/ https://sixcolors.com/post/2023/02/apple-results-and-charts-...
- cguess 4y ago
  But they were selling the same thing, just because more people buy laptops doesn't mean you have to hire more hardware engineers. The design is the same, you scale your outsourced manufacturing instead. With e-commerce you absolutely need more engineers to maintain the software and you need to buy more servers and hire more sysadmins etc.
  - lapcat 4y ago
    > you absolutely need more engineers to maintain the software and you need to buy more servers and hire more sysadmins etc. Apple makes software, you know. ;-) They also have many internet services, such as iCloud, App Store, Apple Music, TV+, etc.
    - cguess 4y ago
      None of which scaled significantly due to the pandemic. Everyone at companies that use Macs had Macs already, so if they're not using the one at work anymore there's not a net increase of Mac users.
      - lapcat 4y ago
        Um, Mac sales skyrocketed during the pandemic. Anyway, Apple makes other products that use internet services too, like iPad, and... have you heard of iPhone? ;-) App Store downloads also increased a lot during the pandemic.
  - underbluewaters 4y ago
    Is software supposed to be a low marginal cost business? Why would I need more engineers if my site has 50% more traffic?
    - prewett 4y ago
      Strictly speaking, software as a low-cost marginal business originally referred to shrink-wrapped application software. If your website is basically a buy button with a download link, you fall into that category. But now your distribution needs have scaled, so either you hire more people to deal with shipping out CDs, or make sure your website scale. And if your software is the distribution (as is the case for websites, SaaS, cloud apps) you might need more engineers.
  - intrasight 4y ago
    Your assertion makes no sense. If anything, physical goods should take more people than does cloud software. These dotcoms hired more people because that's what dotcoms do when they can.
klodolph 4y ago
Amazon, Google, and Meta all seem to make riskier bets, too. Both strategies make sense—make big, risky investments, or grind out more profits in existing, highly lucrative markets.
- dmitriid 4y ago
  > Amazon, Google, and Meta all seem to make riskier bets, too. What are those risky bets I wonder? Meanwhile Apple rolled out a completely custom CPU and transitioned all its hardware to it.
  - sofixa 4y ago
    > Meanwhile Apple rolled out a completely custom CPU and transitioned all its hardware to it. Amazon literally did the same with Graviton (to be fair they acquired a company doing this and used their work as the basis, but still). Google literally developed TPUs in the same timeframe, while also trying a few other things (Stadia, rip, comes to mind).
    - dmitriid 4y ago
      Neither of those were risky in the sense of "if it fails, it takes the company with them".
      - jsnell 4y ago
        Apple making their own CPUs would also not have taken down the company. They took small incremental steps; at any point, a failure of their own CPU program would at worst have meant using a commercially available SOC (with probably great terms), or alternatively skipping the SOC refresh for a year. In fact, by your criteria, I doubt that Apple has made a single risky bet this millennium. Even the iPhone failing would not have taken down the company at that stage.
        dmitriid 4y ago
        Riiiight. iPhone is not risky, but small scale Graviton production by Amazon is. Gotcha.
drawfloat 4y ago
I still can't believe major corporations thought the shift to ecommerce from the pandemic "looked to be permanent". More people than not spent 2 years complaining they couldn't leave the house and rushing out to the pub/shops/holidays the minute restrictions dropped. It was certainly a possibility, but staggers my mind that companies of this size all decided it was a sureity. If I were to be uncharitable, this is the effect of senior staff at these companies having been completely detached from the pandemic experience of the majority of the population. Lots of people still had to go to work F2F, lots of people spent it cooped up in 30m2 apartments with flatmates they hate.
- Dwolb 4y ago
  It doesn't matter if the management team thought the shift was permanent or not. What matters is not getting fired. It's hard to get fired if your actions are in line with the consensus.
- jeromegv 4y ago
  That's not exactly what they bet, because anyone knows that it would be dumb, including them. What you have to look at is e-commerce adoption as a % of retail. This % is increasing every year since the end of the 90s. It was about 10% pre-pandemic. Of course they knew that the huge jump from COVID wouldn't be permanent. What they bet however is that once things re-open, SOME of that conversion to e-commerce would be permanent and that trend of % of retail on ecom would keep increasing at a faster pace than if COVID had not happened. Which wasn't the worse bet to take, you'd think that if people get used to a certain way of shopping and we invest in all this ecom infrastructure, some people would prefer the convenience of it in the long term. Tobi explained it well in his announcement for layoffs last year at Shopify (which came much earlier than other tech companies, likely because their revenue is much more strongly related to ecom revenue) https://news.shopify.com/changes-to-shopifys-team https://news.shopify.com/changes-to-shopifys-team
- inetknght 4y ago
  > Lots of people still had to go to work F2F, lots of people spent it cooped up in 30m2 apartments with flatmates they hate. I assume by `F2F` you mean "face-to-face"? I think that's a matter of perspective. In my echo chamber, people live with flatmates that they get along with just fine and are happy that they don't have to go to an office to do work that could be done at home. > More people than not spent 2 years complaining they couldn't leave the house So... perhaps they do indeed want to "leave the house". But I think they still don't want to go to the office when they can work from home. I think e-commerce is indeed shifted-up relative to the start of the pandemic. I think things that e-commerce can't do well are still where people want to leave the house. As you said, pubs/window shopping (not quite shopping itself)/holidays.
jsnell 4y ago
> Other companies were willing to hire lots of developers because the ROI on devs was good compared to low inflation and low interest rates Was the ROI good though? Did any of these companies seem to deliver new products or features faster? Do their financials suggest that these devs somehow improved operational efficiency (e.g. improved gross margins)? Or was it just that they hired because they could afford to?
- jonfw 4y ago
  Most orgs claim that they need X% more money to serve X% more users, and they use that money to hire X% more devs. Since the users and money are both there, they get it in the short term, and nobody looks at the big picture until money tightens up
- trilobyte 4y ago
  I think it was more of a tragedy of the commons where some companies started aggressively hiring, and other companies followed suit to avoid losing access to talent. The pandemic was a huge societal event, but nothing indicated it was going to be the new normal and CEOs who grew headcount expecting it to go on indefinitely made a huge, and arguably an easily avoidable, misstep.
Ancalagon 4y ago
Was it even mostly devs that were hired/fired? Anecdotally on the firing side it’s mostly recruiters and business ops even for these companies
kenjackson 4y ago
Not only that, but you have to recall there was the chip shortage before and during the pandemic. Given Apple's reliance on HW sales, it would be foolish to ramp up hiring when you can't obtain the materials for your products. While at the same time people moved to buying everything online and having Teams/Zoom calls for all work and school. The situation was just very different for Apple vs Amazon/Google/Microsoft/Zoom.
- wincy 4y ago
  There was a chip shortage for old machines, bigger fabrication sizes, and because car manufacturers and others stupidly canceled their contracts with chip makers, anticipating a downturn when instead there was a huge boom in demand. Apple was largely unaffected by this because they are first in line for new fabrication processes, did not cancel their existing chip orders, and uses mostly modern fabs anyway, not bargain basement 40nm+ stuff. The M1 and other 5nm and smaller chips largely kept pace with demand. It’s never been difficult to find a Mac throughout the pandemic.
  - kenjackson 4y ago
    I don’t work at Apple, but Cook at least portrayed there was impact to Apple publicly. See https://www.businessinsider.com/apple-imac-and-ipad-production-will-be-delayed-chip-shortage-2021-4#:~:text=Apple%20CEO%20Tim%20Cook%20said%20the%20chip%20shortage,next%20quarter%20as%20a%20result%20of%20the%20shortage https://www.businessinsider.com/apple-imac-and-ipad-producti....
jjirsa 4y ago
> Apple's underlying economics haven't changed, so they have not had any reason to over-hire in the first place. The bloomberg article has a visual showing revenue-per-employee going up from 1.17M/employee (2017-2019) to 2.51M/employee (2020-2022), so ... some of the underlying economics changed somehow?
- orangecat 4y ago
  revenue-per-employee going up from 1.17M/employee (2017-2019) to 2.51M/employee (2020-2022) The pandemic probably contributed to that, but also during that period they went from their worst line of Macs in recent years to their best.
insane_dreamer 4y ago
> looked to be permanent I don't believe that any CEO/CFO with half a brain actually thought this. Sure, things wouldn't return to pre-pandemic levels necessarily, but the COVID-induced state was not going to permanently change human behavior. > ROI on devs was good compared to low inflation and low interest rates. Then both of those things changed this is more the reason; the "mea culpa, how could we have known" excuses is just to cover a regression to the mean they knew was eventually going to happen.
- motoxpro 4y ago
  For CEOs that thought this would be permanent see Shopify and Amazon. Both have said this publicly and Amazon spent billions on transportation infra. They are not stupid.
  - insane_dreamer 4y ago
    Amazon is a different case altogether (see my other post about them) as they deal in physical goods; that transportation infrastructure allows them to capture greater market share even if online sales drop.
hackernewds 4y ago
exactly. decompass companies hired because they were seeing a boost in the amount of consumption, literally tripling overnight in some cases. has been well documented as "the quickening" where decades of growth was observed in the matter of weeks. https://www.mckinsey.com/capabilities/strategy-and-corporate-finance/our-insights/five-fifty-the-quickening https://www.mckinsey.com/capabilities/strategy-and-corporate... CEOs that didn't meet those needs would be fired for ceding market share instead. This demand explosion did not manifest in hardware companies such as Apple.

by mabbo 4y ago

lapcat 4y ago

> Meanwhile, Apple has a mostly-stable massive chunk of the consumer device market and has always had a profit margin that is startlingly high. Not much has changed as far as they're concerned. Apple had a big bump in pandemic-related revenue too, inspired by mass WFH hardware purchases. And now Apple revenue has gone down as well: https://sixcolors.com/post/2023/02/apple-results-and-charts-117-2b-quarter-is-still-a-step-back/ https://sixcolors.com/post/2023/02/apple-results-and-charts-...

cguess 4y ago
But they were selling the same thing, just because more people buy laptops doesn't mean you have to hire more hardware engineers. The design is the same, you scale your outsourced manufacturing instead. With e-commerce you absolutely need more engineers to maintain the software and you need to buy more servers and hire more sysadmins etc.
- lapcat 4y ago
  > you absolutely need more engineers to maintain the software and you need to buy more servers and hire more sysadmins etc. Apple makes software, you know. ;-) They also have many internet services, such as iCloud, App Store, Apple Music, TV+, etc.
  - cguess 4y ago
    None of which scaled significantly due to the pandemic. Everyone at companies that use Macs had Macs already, so if they're not using the one at work anymore there's not a net increase of Mac users.
    - lapcat 4y ago
      Um, Mac sales skyrocketed during the pandemic. Anyway, Apple makes other products that use internet services too, like iPad, and... have you heard of iPhone? ;-) App Store downloads also increased a lot during the pandemic.
- underbluewaters 4y ago
  Is software supposed to be a low marginal cost business? Why would I need more engineers if my site has 50% more traffic?
  - prewett 4y ago
    Strictly speaking, software as a low-cost marginal business originally referred to shrink-wrapped application software. If your website is basically a buy button with a download link, you fall into that category. But now your distribution needs have scaled, so either you hire more people to deal with shipping out CDs, or make sure your website scale. And if your software is the distribution (as is the case for websites, SaaS, cloud apps) you might need more engineers.
- intrasight 4y ago
  Your assertion makes no sense. If anything, physical goods should take more people than does cloud software. These dotcoms hired more people because that's what dotcoms do when they can.

klodolph 4y ago

Amazon, Google, and Meta all seem to make riskier bets, too. Both strategies make sense—make big, risky investments, or grind out more profits in existing, highly lucrative markets.

dmitriid 4y ago
> Amazon, Google, and Meta all seem to make riskier bets, too. What are those risky bets I wonder? Meanwhile Apple rolled out a completely custom CPU and transitioned all its hardware to it.
- sofixa 4y ago
  > Meanwhile Apple rolled out a completely custom CPU and transitioned all its hardware to it. Amazon literally did the same with Graviton (to be fair they acquired a company doing this and used their work as the basis, but still). Google literally developed TPUs in the same timeframe, while also trying a few other things (Stadia, rip, comes to mind).
  - dmitriid 4y ago
    Neither of those were risky in the sense of "if it fails, it takes the company with them".
    - jsnell 4y ago
      Apple making their own CPUs would also not have taken down the company. They took small incremental steps; at any point, a failure of their own CPU program would at worst have meant using a commercially available SOC (with probably great terms), or alternatively skipping the SOC refresh for a year. In fact, by your criteria, I doubt that Apple has made a single risky bet this millennium. Even the iPhone failing would not have taken down the company at that stage.
      - dmitriid 4y ago
        Riiiight. iPhone is not risky, but small scale Graviton production by Amazon is. Gotcha.

drawfloat 4y ago

I still can't believe major corporations thought the shift to ecommerce from the pandemic "looked to be permanent". More people than not spent 2 years complaining they couldn't leave the house and rushing out to the pub/shops/holidays the minute restrictions dropped. It was certainly a possibility, but staggers my mind that companies of this size all decided it was a sureity. If I were to be uncharitable, this is the effect of senior staff at these companies having been completely detached from the pandemic experience of the majority of the population. Lots of people still had to go to work F2F, lots of people spent it cooped up in 30m2 apartments with flatmates they hate.

Dwolb 4y ago
It doesn't matter if the management team thought the shift was permanent or not. What matters is not getting fired. It's hard to get fired if your actions are in line with the consensus.
jeromegv 4y ago
That's not exactly what they bet, because anyone knows that it would be dumb, including them. What you have to look at is e-commerce adoption as a % of retail. This % is increasing every year since the end of the 90s. It was about 10% pre-pandemic. Of course they knew that the huge jump from COVID wouldn't be permanent. What they bet however is that once things re-open, SOME of that conversion to e-commerce would be permanent and that trend of % of retail on ecom would keep increasing at a faster pace than if COVID had not happened. Which wasn't the worse bet to take, you'd think that if people get used to a certain way of shopping and we invest in all this ecom infrastructure, some people would prefer the convenience of it in the long term. Tobi explained it well in his announcement for layoffs last year at Shopify (which came much earlier than other tech companies, likely because their revenue is much more strongly related to ecom revenue) https://news.shopify.com/changes-to-shopifys-team https://news.shopify.com/changes-to-shopifys-team
inetknght 4y ago
> Lots of people still had to go to work F2F, lots of people spent it cooped up in 30m2 apartments with flatmates they hate. I assume by `F2F` you mean "face-to-face"? I think that's a matter of perspective. In my echo chamber, people live with flatmates that they get along with just fine and are happy that they don't have to go to an office to do work that could be done at home. > More people than not spent 2 years complaining they couldn't leave the house So... perhaps they do indeed want to "leave the house". But I think they still don't want to go to the office when they can work from home. I think e-commerce is indeed shifted-up relative to the start of the pandemic. I think things that e-commerce can't do well are still where people want to leave the house. As you said, pubs/window shopping (not quite shopping itself)/holidays.

jsnell 4y ago

> Other companies were willing to hire lots of developers because the ROI on devs was good compared to low inflation and low interest rates Was the ROI good though? Did any of these companies seem to deliver new products or features faster? Do their financials suggest that these devs somehow improved operational efficiency (e.g. improved gross margins)? Or was it just that they hired because they could afford to?

jonfw 4y ago
Most orgs claim that they need X% more money to serve X% more users, and they use that money to hire X% more devs. Since the users and money are both there, they get it in the short term, and nobody looks at the big picture until money tightens up
trilobyte 4y ago
I think it was more of a tragedy of the commons where some companies started aggressively hiring, and other companies followed suit to avoid losing access to talent. The pandemic was a huge societal event, but nothing indicated it was going to be the new normal and CEOs who grew headcount expecting it to go on indefinitely made a huge, and arguably an easily avoidable, misstep.

Ancalagon 4y ago

Was it even mostly devs that were hired/fired? Anecdotally on the firing side it’s mostly recruiters and business ops even for these companies

kenjackson 4y ago

Not only that, but you have to recall there was the chip shortage before and during the pandemic. Given Apple's reliance on HW sales, it would be foolish to ramp up hiring when you can't obtain the materials for your products. While at the same time people moved to buying everything online and having Teams/Zoom calls for all work and school. The situation was just very different for Apple vs Amazon/Google/Microsoft/Zoom.

wincy 4y ago
There was a chip shortage for old machines, bigger fabrication sizes, and because car manufacturers and others stupidly canceled their contracts with chip makers, anticipating a downturn when instead there was a huge boom in demand. Apple was largely unaffected by this because they are first in line for new fabrication processes, did not cancel their existing chip orders, and uses mostly modern fabs anyway, not bargain basement 40nm+ stuff. The M1 and other 5nm and smaller chips largely kept pace with demand. It’s never been difficult to find a Mac throughout the pandemic.
- kenjackson 4y ago
  I don’t work at Apple, but Cook at least portrayed there was impact to Apple publicly. See https://www.businessinsider.com/apple-imac-and-ipad-production-will-be-delayed-chip-shortage-2021-4#:~:text=Apple%20CEO%20Tim%20Cook%20said%20the%20chip%20shortage,next%20quarter%20as%20a%20result%20of%20the%20shortage https://www.businessinsider.com/apple-imac-and-ipad-producti....

jjirsa 4y ago

> Apple's underlying economics haven't changed, so they have not had any reason to over-hire in the first place. The bloomberg article has a visual showing revenue-per-employee going up from 1.17M/employee (2017-2019) to 2.51M/employee (2020-2022), so ... some of the underlying economics changed somehow?

orangecat 4y ago
revenue-per-employee going up from 1.17M/employee (2017-2019) to 2.51M/employee (2020-2022) The pandemic probably contributed to that, but also during that period they went from their worst line of Macs in recent years to their best.

insane_dreamer 4y ago

> looked to be permanent I don't believe that any CEO/CFO with half a brain actually thought this. Sure, things wouldn't return to pre-pandemic levels necessarily, but the COVID-induced state was not going to permanently change human behavior. > ROI on devs was good compared to low inflation and low interest rates. Then both of those things changed this is more the reason; the "mea culpa, how could we have known" excuses is just to cover a regression to the mean they knew was eventually going to happen.

motoxpro 4y ago
For CEOs that thought this would be permanent see Shopify and Amazon. Both have said this publicly and Amazon spent billions on transportation infra. They are not stupid.
- insane_dreamer 4y ago
  Amazon is a different case altogether (see my other post about them) as they deal in physical goods; that transportation infrastructure allows them to capture greater market share even if online sales drop.

hackernewds 4y ago

exactly. decompass companies hired because they were seeing a boost in the amount of consumption, literally tripling overnight in some cases. has been well documented as "the quickening" where decades of growth was observed in the matter of weeks. https://www.mckinsey.com/capabilities/strategy-and-corporate-finance/our-insights/five-fifty-the-quickening https://www.mckinsey.com/capabilities/strategy-and-corporate... CEOs that didn't meet those needs would be fired for ceding market share instead. This demand explosion did not manifest in hardware companies such as Apple.