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It's because the fundamental economics of nearly the entire sector don't make sense. I predicted there would be mass layoffs in tech right like this last year,
by time_to_smile 4y ago
It's because the fundamental economics of nearly the entire sector don't make sense.
I predicted there would be mass layoffs in tech right like this last year, and more specifically predicted 6 months ago that we'd be seeing basically what we're seeing as far as layoffs.
With rising rates investors are asking companies to show a clear path towards profitability. Most of these companies are losing more money each quarter and industry wide this has to stop.
For the larger profitable companies it's likely because they realize a huge amount of their revenue is coming from these companies that don't make money.
While I'll be the first to criticize companies for working to remove power from workers, what we're seeing is simply investors waking up to the economic reality that growth without profits is not sustainable.
- moneywoes 4y agoRight, most SaaS are bought by other SaaS many of which are unprofitable What do you predict is the resolution to this dillema?
- tqi 4y agoThe most frustrating part of all of these layoffs is that it seems more or less understood that if the fed lowers rates, we'll be back to irresponsible hiring. This belief that there is a sing "right strategy" for the given economic conditions completely ignores switching costs, both for individuals (whose lives are upended) but also for companies (imo the coordination overheard of hypergrowth likely means that companies are less productive in the short term).