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People in tech need to stop thinking that tech is special industry that was just invented in last 10 years. Layoffs in response to an economic uncertainty/slow

People in tech need to stop thinking that tech is special industry that was just invented in last 10 years. Layoffs in response to an economic uncertainty/slowdown were not invented by Amazon/Google/Meta/Musk. They're as old as economy is.

pjmlp 4y ago
We don't, I already went through this several times since the first .com wave. And seeing the support we got in several times via the union fellows in the European countries I have worked on, is also a reason why I am quite supportive of them.
whiplash451 4y ago
Except that in the « old » economy, you would be hard pressed to be allowed to fire thousands of people with a P&L showing billions in profit (at least in France).
- hef19898 4y ago
  Easy: Close the ehole division or site and move it abroad. The lay offs will be more expensive so, sure.
- jimbo9991 4y ago
  Yeah not in the US, if anything the past decade has been very good for programmers when compared to other industries. There are lots of industries in the US that are more ruthless than big tech.
- justapassenger 4y ago
  Note - I'm not making a statement on the current layoff, as I know nothing about Ericsson. That logic is flawed. Past performance is not indicative of future results. If you see big slowdown coming, isn't it better to prepare for it early? Do you have to wait till you're losing money?
  - waboremo 4y ago
    That logic is also flawed. If you see a big slowdown coming, why would you continue making large acquisitions? Why sweep thousands of various ranks rather than tighten your ship carefully where it matters?
    - adventured 4y ago
      Because employees are primarily a cost vs output equation for public companies in particular (and that's even more true with gigantic firms). Acquisitions are broadly viewed as expanding shareholder value (whether accurate or not in a given situation). The stock market tanked thanks to the Fed rate hikes. It's believed shareholders will respond positively to cost optimizations. So they'll try to hold the line on growth while boosting margins re cost centers. It's quite straight-forward thinking as it pertains to getting a positive reaction from shareholders. The question for that context is: are your cost centers well optimized, or can you trim staff (real-estate holdings, inventory, whatever)? That's a very common question that would be pushed at public companies by large institutional shareholders. Big tech is extraordinarily bloated with labor. They frequently grow at almost comical rates in terms of adding unnecessary employees (they do it just because they can afford to hoover up the talent to keep it from their competition; one common path forward in the hierarchy for managers is to grow their staff count and expand their footprint), and pretty much everyone knows it. It happens with every fast growth era in tech.
      - waboremo 4y ago
        We agree, staff trimming makes far more sense. However, what is happening isn't staff trimming. Are there any papers regarding the labor bloat specific to tech? Everyone believing in something doesn't make it true so I would love to read more about that beyond the usual memes of "girls on tiktok posting about their day in tech". Actually, this idea that it's done because of bloat signals something interesting. The reply above claims these layoffs happen because of the future potentially showing massive slowdown - however, why are we trusting what these companies feel about the future when they got their pandemic move completely wrong? They thoroughly believed (apparently, so they say in their layoff emails...) that this growth was going to continue, so obviously they don't have the best grasp on how to make decisions for the future. Entirely negating the above reply that this is due to impending slowdown.
- alfalfasprout 4y ago
  Yeah, but you also wouldn't see 200% YOY headcount growth in larger companies. The companies that actually grew responsibly (aka not FAANG) are generally doing less/smaller layoffs/none at all.
  - oblio 4y ago
    Ericsson is as far from those as you could be.
    - alfalfasprout 4y ago
      I was speaking more broadly of the tech industry but yes in this case you're correct.
- FollowingTheDao 4y ago
  What this tells me is that there is a really big slowdown (Depression?) coming that threatens even the huge COH of that these companies currently have. This new economy was one of extremely low interest rates.
  - heisenbit 4y ago
    Ericsson is a bit of a bell-weather company with broad exposure globally. It is the Intel of network equipment providers. It is concerning.
- 1letterunixname 4y ago
  Well that's France, where like in Italy and Germany. it's much more difficult to fire any one person, a department, or N% without much advance notification and government approval. For the worker, it's a very good thing. Americans don't know how bad they have it and don't remember the mass layoffs of the 1980's and 1990's. A time when jobs became scarce because nearly every company was following suit and REAL unemployment, including those who stopped looking for jobs, rose considerably. The REAL labor participation rate in the US is more like 55% rather than 62% due to the rosy and flawed methodology used to count U-1 through U-6. There are millions fewer middle-aged workers now than there were historically. Ageism, discrimination, and other factors discourage workers from seeking to reenter the workforce. Low skill workers have it worst, cannot always move great distances, and cannot always retrain into magical hypothetical jobs that don't exist. Many underemployed people become Uber and Lyft drivers, where there is the perception of freedom but there is net underpayment and abuse (no help with capitalization, depreciation, and maintenance of a vehicle make their effective pay well below that of taxi drivers). The global situation is the US Fed's fault for giving out free money for years and then suddenly being a Grinch because they don't like "excess consumption" when there have been shortages and supply chain disruptions. US trucking is still a mess.
  - whiplash451 4y ago
    You can absolutely fire people in France and many companies have done it by the thousands. They just did not happen to have billions in profits at the same time.
    - 1letterunixname 4y ago
      No doubt helped by the modern neoliberalism* wave of Macron. And raising the retirement age.. and more austerity too? * For anyone unfamiliar with the term: think corporate "Liberal" (conservative lite) inspired by the American Clinton dynasty including Obama and Biden who are pro-neocolonialism, anti-union, anti-worker, and "tough on crime". Macron's type is sometimes seen as a "palatable compromise" compared to the regressive fascist nationalists like Le Pen.
- bogomipz 4y ago
  Or hoarding talent simply to take them off the market and keep them from potential competitors. I feel like this is a relatively new development, at this scale at least.
- tokinonagare 4y ago
  Few things here: first there's very few big techs in the country, which mean layoffs in the thousands are unlikely. The second thing is that big companies (even the software ones) use an army of external consultants precisely to go around law governing work. They can then go let off people without technically firing anyone.
stevehawk 4y ago
except the tech industry has been immune to layoffs because it would represent such bad PR to be the one company downsizing in the midst of a bull market. Fortunately for the tech industry, the market is now bearish and they're finally allowed to trim the fat that they've been accruing for over a decade, which is why when someone finally blinked first then the rest followed (and continue to follow).
- patrick451 4y ago
  If there was so much fat to trim, why have they been relentlessly growing headcount for the last 2 years?
- great_psy 4y ago
  The view of laying off in a bull market being bad PR implies those companies wanted to lay people off in the first place. During the bull market they were fighting with each other to hire more, which is the opposite signal. Sure the bear market allows them to layoff, but I don’t think they wanted to lay anyone off up until 6 months ago.
nine_k 4y ago
Tech / IT is of course special, because it was seen (correctly) as an engine of indeterminately large growth: software scales really well, and integrated circuits are almost as good, currently limited by production capacity, not market demand. For this tech received very special treatment, colossal P/E, a shower of investment, all in an attempt to grab a slice of this wildly growing pie. But almost every exponent in reality is a bottom part of an S-curve. The growth was indeterminate, not infinite. As growth stalled or reversed, the special treatment did not exactly stop, but its extent contracted severely. Questions about actual profitability started to arise, for instance.

pjmlp 4y ago

We don't, I already went through this several times since the first .com wave. And seeing the support we got in several times via the union fellows in the European countries I have worked on, is also a reason why I am quite supportive of them.

whiplash451 4y ago

Except that in the « old » economy, you would be hard pressed to be allowed to fire thousands of people with a P&L showing billions in profit (at least in France).

hef19898 4y ago
Easy: Close the ehole division or site and move it abroad. The lay offs will be more expensive so, sure.
jimbo9991 4y ago
Yeah not in the US, if anything the past decade has been very good for programmers when compared to other industries. There are lots of industries in the US that are more ruthless than big tech.
justapassenger 4y ago
Note - I'm not making a statement on the current layoff, as I know nothing about Ericsson. That logic is flawed. Past performance is not indicative of future results. If you see big slowdown coming, isn't it better to prepare for it early? Do you have to wait till you're losing money?
- waboremo 4y ago
  That logic is also flawed. If you see a big slowdown coming, why would you continue making large acquisitions? Why sweep thousands of various ranks rather than tighten your ship carefully where it matters?
  - adventured 4y ago
    Because employees are primarily a cost vs output equation for public companies in particular (and that's even more true with gigantic firms). Acquisitions are broadly viewed as expanding shareholder value (whether accurate or not in a given situation). The stock market tanked thanks to the Fed rate hikes. It's believed shareholders will respond positively to cost optimizations. So they'll try to hold the line on growth while boosting margins re cost centers. It's quite straight-forward thinking as it pertains to getting a positive reaction from shareholders. The question for that context is: are your cost centers well optimized, or can you trim staff (real-estate holdings, inventory, whatever)? That's a very common question that would be pushed at public companies by large institutional shareholders. Big tech is extraordinarily bloated with labor. They frequently grow at almost comical rates in terms of adding unnecessary employees (they do it just because they can afford to hoover up the talent to keep it from their competition; one common path forward in the hierarchy for managers is to grow their staff count and expand their footprint), and pretty much everyone knows it. It happens with every fast growth era in tech.
    - waboremo 4y ago
      We agree, staff trimming makes far more sense. However, what is happening isn't staff trimming. Are there any papers regarding the labor bloat specific to tech? Everyone believing in something doesn't make it true so I would love to read more about that beyond the usual memes of "girls on tiktok posting about their day in tech". Actually, this idea that it's done because of bloat signals something interesting. The reply above claims these layoffs happen because of the future potentially showing massive slowdown - however, why are we trusting what these companies feel about the future when they got their pandemic move completely wrong? They thoroughly believed (apparently, so they say in their layoff emails...) that this growth was going to continue, so obviously they don't have the best grasp on how to make decisions for the future. Entirely negating the above reply that this is due to impending slowdown.
alfalfasprout 4y ago
Yeah, but you also wouldn't see 200% YOY headcount growth in larger companies. The companies that actually grew responsibly (aka not FAANG) are generally doing less/smaller layoffs/none at all.
- oblio 4y ago
  Ericsson is as far from those as you could be.
  - alfalfasprout 4y ago
    I was speaking more broadly of the tech industry but yes in this case you're correct.
FollowingTheDao 4y ago
What this tells me is that there is a really big slowdown (Depression?) coming that threatens even the huge COH of that these companies currently have. This new economy was one of extremely low interest rates.
- heisenbit 4y ago
  Ericsson is a bit of a bell-weather company with broad exposure globally. It is the Intel of network equipment providers. It is concerning.
1letterunixname 4y ago
Well that's France, where like in Italy and Germany. it's much more difficult to fire any one person, a department, or N% without much advance notification and government approval. For the worker, it's a very good thing. Americans don't know how bad they have it and don't remember the mass layoffs of the 1980's and 1990's. A time when jobs became scarce because nearly every company was following suit and REAL unemployment, including those who stopped looking for jobs, rose considerably. The REAL labor participation rate in the US is more like 55% rather than 62% due to the rosy and flawed methodology used to count U-1 through U-6. There are millions fewer middle-aged workers now than there were historically. Ageism, discrimination, and other factors discourage workers from seeking to reenter the workforce. Low skill workers have it worst, cannot always move great distances, and cannot always retrain into magical hypothetical jobs that don't exist. Many underemployed people become Uber and Lyft drivers, where there is the perception of freedom but there is net underpayment and abuse (no help with capitalization, depreciation, and maintenance of a vehicle make their effective pay well below that of taxi drivers). The global situation is the US Fed's fault for giving out free money for years and then suddenly being a Grinch because they don't like "excess consumption" when there have been shortages and supply chain disruptions. US trucking is still a mess.
- whiplash451 4y ago
  You can absolutely fire people in France and many companies have done it by the thousands. They just did not happen to have billions in profits at the same time.
  - 1letterunixname 4y ago
    No doubt helped by the modern neoliberalism* wave of Macron. And raising the retirement age.. and more austerity too? * For anyone unfamiliar with the term: think corporate "Liberal" (conservative lite) inspired by the American Clinton dynasty including Obama and Biden who are pro-neocolonialism, anti-union, anti-worker, and "tough on crime". Macron's type is sometimes seen as a "palatable compromise" compared to the regressive fascist nationalists like Le Pen.
bogomipz 4y ago
Or hoarding talent simply to take them off the market and keep them from potential competitors. I feel like this is a relatively new development, at this scale at least.
tokinonagare 4y ago
Few things here: first there's very few big techs in the country, which mean layoffs in the thousands are unlikely. The second thing is that big companies (even the software ones) use an army of external consultants precisely to go around law governing work. They can then go let off people without technically firing anyone.

stevehawk 4y ago

except the tech industry has been immune to layoffs because it would represent such bad PR to be the one company downsizing in the midst of a bull market. Fortunately for the tech industry, the market is now bearish and they're finally allowed to trim the fat that they've been accruing for over a decade, which is why when someone finally blinked first then the rest followed (and continue to follow).

patrick451 4y ago
If there was so much fat to trim, why have they been relentlessly growing headcount for the last 2 years?
great_psy 4y ago
The view of laying off in a bull market being bad PR implies those companies wanted to lay people off in the first place. During the bull market they were fighting with each other to hire more, which is the opposite signal. Sure the bear market allows them to layoff, but I don’t think they wanted to lay anyone off up until 6 months ago.

nine_k 4y ago

Tech / IT is of course special, because it was seen (correctly) as an engine of indeterminately large growth: software scales really well, and integrated circuits are almost as good, currently limited by production capacity, not market demand. For this tech received very special treatment, colossal P/E, a shower of investment, all in an attempt to grab a slice of this wildly growing pie. But almost every exponent in reality is a bottom part of an S-curve. The growth was indeterminate, not infinite. As growth stalled or reversed, the special treatment did not exactly stop, but its extent contracted severely. Questions about actual profitability started to arise, for instance.