15 ms·

The widespread layoffs are more because of copycat behavior than cost-cutting

233 points by taubek 4y ago

edrxty 4y ago
The CEO class isn't inherently smarter than you. In fact, they're pretty much the same as you, albeit frequently with more sociopathic tendencies. They do the same things you see average people on the street doing, including subscribing to their own questionable fads and cargo cults.
- moremetadata 4y ago
  Its not just the CEO, if you realised just how much board and line management are like the 3 blind mice, trying to meet their targets, invent new targets all the while trying to survive in the corporate version of the Robert Morris Water Maze, simultaneously playing Corporate Buzzword Bingo or C B B's [1], I'm surprised so many people put up with life like this! Lemmings[2] is a very educational game on many levels. [1] https://www.bbc.co.uk/cbeebies https://www.bbc.co.uk/cbeebies [2] https://en.wikipedia.org/wiki/Lemmings_(video_game) https://en.wikipedia.org/wiki/Lemmings_(video_game)
- jevgeni 4y ago
  But you don't have the access of CEOs.
- findthewords 4y ago
  Well, they have multitudes of assistants at their disposal. Delegation multiplies one's productivity factor. It's like gaining access to multiple CPU cores.
  - ithkuil 4y ago
    And like with parallel programming, there are many bugs, traps, pitfalls that make it hard to properly leverage the art of delegation
- fortituded0002 4y ago
  The CEO class is a mixed group of people, some of which are incredibly smart. But your point is well taken and worth considering. They are "just people" too. On a side note, I can't figure out all the responses to this comment. Everyone seems to be piling on and talking about stuff totally unrelated to your point.
- awesomegoat_com 4y ago
  Well, this doesn't matter. It is all about incentives. CEO class is motivated by KPIs. Focus solely on KPI creates volatility in all the other variables that are not this year's KPIs. Hiring and then firing feels like work, hence needs to be compensated. Nobody in the corporate america is compensated to explicitly do nothing, even though it might be the most appropriate move in a given quarter.
bpodgursky 4y ago
The hiring was copycat behavior. The product design was copycat behavior. The market positioning was copycat behavior. The fundraising was copycat behavior. Nobody is building a business from first principles, get real. Of course it's copycat. That's fine. That's life. That's how you get through life without sitting in bed for ten hours planning how to put on a shirt. This title sounds profound until you think about it for ten seconds.
- vocram 4y ago
  Copying the how is ok, but copying the why it’s not. The problem here is not how companies react to a downturn, but why they think there’s one. And they are copying the whys too.
  - deleted 4y ago
    [deleted]
- ithkuil 4y ago
  > until you think about it for ten seconds. It's not about the number of seconds that matter, but it's the direction of where your thoughts go. I hear this expression often and I don't think it's fair; it's quite condescending. The fact that you think something is obvious and if only somebody bothered really thinking about it for a moment it would be obvious to them too, is missing the reason different people come to different conclusions about things. What you think next is determined by many factors, including your goals, your biases, your prior knowledge, what you had for breakfast. And you should know that, if you think about it for ten seconds.
- returnInfinity 4y ago
  Everyone is now an AI company, hiring ML Engineers and PhDs.
emodendroket 4y ago
> The irony is that these same companies were talking a year ago about people as their most important asset, and now they're treating their employees pretty badly, laying them off via email or by abruptly cutting off their access to the company. These layoffs are a decision that reflects the company's values, and these companies have basically given their employees the middle finger. I have to wonder if this is entirely incidental. Sudden layoffs can also help maintain labor discipline, which a lot of business leaders felt was getting away from them.
- Animats 4y ago
  > Sudden layoffs can also help maintain labor discipline, which a lot of business leaders felt was getting away from them. It's probably more about that than about cutting costs. Once sufficient fear has been instilled, the next stage will probably be across-the-board pay cuts.
  - Quequau 4y ago
    > Once sufficient fear has been instilled, the next stage will probably be across-the-board pay cuts. Not saying you are wrong but it's common knowledge now that the best way to secure a pay rise is to find a new job. So I expect that a fair number of employees faced with an actual wage reduction in a time of pretty significant inflation will feel motivated or even forced to find new employment. Which in turn will mean that when the firms go to replace those workers, which for the most part they eventually will want to do, they will wind up having to pay a higher wage to attract the same level of talent and competence.
    - TeMPOraL 4y ago
      > they will wind up having to pay a higher wage to attract the same level of talent and competence. Will they? 'glanzwulf here[0] is making a not so tinfoil-hat point that widespread layoffs create an atmosphere of fear. At this scale, the people who were laid off may no longer feel so sure about their prospects of finding a new job quickly - so they might just be willing to compromise for a lower salary, just to secure some job. For the first time since... ever? software developers might experience the job market the way everyone else does - that is, one where employers hold all the power, and employees are happy to take whatever they're being offered. -- [0] - https://news.ycombinator.com/item?id=34967091 https://news.ycombinator.com/item?id=34967091
dajtxx 4y ago
Many of these companies and people are producing nothing of value, so there is an argument that the companies won't be worse off afterwards. But the people will, for sure. And the company leadership should be held accountable for that in some way other than to get bigger bonuses. Did this all start before Musk bought Twitter and in his inimitable way went about reforming its workforce? If not, I'd guess a lot of other managers finally felt they had the excuse to do what they'd been wanting to, but for some reason were holding back on.
- JumpCrisscross 4y ago
  > lot of other managers finally felt they had the excuse to do what they'd been wanting t No man rules alone. Do you think before Musk every CEO wanted to lay everyone off, but couldn’t? Are investors punishing companies who grew responsibly and aren’t going Jack Nicholson from the Shining on their teams? Of course not. Leaders want to grow and hire and Dorsey around giving TED talks. But when creditors get uneasy and Board members what-have-you-done-for-me-lately, survivors survive, they have no choice. They must deliver. And it’s not like those creditors and Board members reign sovereign. They have their own LPs, pensions and billionaires, asking why they’re there if Treasuries yield five percent. You’re probably looking at your portfolio or grocery bill and wondering why your fund manager or manager manager can’t get you a better return, or deliver you that raise. That’s what’s causing this. When even the world’s richest man is constrained by margin loans and interest payments on debt trading at dimes on the dollar, with banks who were once friends now threatening to take it all away; by stock multiples punishing losses and leverage with existential consequences; when it all looks like it’s falling down it’s tempting to coronate someone, anyone, as sovereign. But that’s not how it works, it’s never how it worked, kings always had lenders and warlords and pretenders to the throne. Systems have momentum, and when inflation spiked and rates rose, nobody had a choice other than persisting or perishing. No man rules alone.
  - sokoloff 4y ago
    Allow me to play the world’s smallest violin for the world’s richest man being constrained by margin loans (the taking of which was his own decision).
jevgeni 4y ago
It just means that its easier to get board buy-in right now for something they wanted to do for a long time.
namaria 4y ago
Looking for specific reasons for each cycle change is disingenuous. Complex systems evolve by boom and bust dynamics. It's natural and inevitable. We can't have continuous stable development of systems because actors don't have perfect knowledge.
- sprash 4y ago
  The boom and bust cycles are artificial and are created entirely by the central bank. We can have continuous stable development and did have it when the gold standard was still a thing.
  - benj111 4y ago
    Booms and busts existed before central banks. They existed when the gold standard was a thing. Have you heard of the 'great depression'? That happen while on the gold standard. So unless your going to no true scotsman that fact...
  - mind-blight 4y ago
    The great depression happened while we had the gold standard. With banks loaning money based on the value of their ledgers, you'll end up more currency in circulation than physically exists - even with a pegged dollar and no central bank. The booms and busts occur due to speculation, over-investment, and contraction when the bottom falls out. That occurs just fine with distributed banking and loans. Did 0 percent interest contribute to our current cycle? Absolutely. But these cycles exist in any economic system with capital markets
    - sprash 4y ago
      By gold standard I actually mean no fractional reserve banking. The great depression was caused by the federal reserve. As soon as you have fractional reserve banking you allow over-leveraged debts which lead immediately to boom and bust cycles. If you want to avoid those cycles simply don't allow people to spend money they don't actually have and always settle payments as early as possible (also don't allow anybody to simply print money).
trabant00 4y ago
That's too much of a simplified view. There's a feedback loop involved. Companies reducing their work force tells you about their plans for the near future regarding spending, expansion and so on. If you provide services for those companies you are not going to have enough work for your present employees, a lot of which have been recently hired to handle the now gone spending boom. So you might wanna dial back your work force. And then the companies that provide you with services enter the loop and so on. And this is only one factor. Other factors you can't simply ignore: the massive rise of interest rates, the drop in productivity per worker, the money going to the war in Ukraine. Another way to look at this, instead of copycat, is voting with your wallet the direction you think the economy is going. A form of wisdom of the crowd. https://en.wikipedia.org/wiki/Wisdom_of_the_crowd https://en.wikipedia.org/wiki/Wisdom_of_the_crowd
myspy 4y ago
I've read somewhere else that Apple did not participate in wide lay-offs which means they play their own game and don't fire what they recently acquired. Hence it makes sense that other companies have worse big picture and outlook capabilities.
- nayroclade 4y ago
  Apple didn’t overhire during the pandemic either, which means they avoided the mismatch between staffing and demand that other large tech firms have.
  - ralfd 4y ago
    Maybe Apple simply has better management who see farther than only one quarter, but it is noteworthy that as a tech company they are also in a more physical business: making and selling boxes of hardware instead of lofty software. They were also supply-chain constraint by Asian manufacturing, which restrained them.
    - matwood 4y ago
      Apple has been conservative for a long time. Their near death is still ingrained in the company [1]. It also wasn't long ago that people were giving Apple hard time for not hiring more. [1] I was an partner in a company that nearly died, but was able to pull through and eventually do well/get acquired. Ultra conservative around hiring is a bias I know I still carry with me from the experience.
- renewiltord 4y ago
  Just like ChatGPT, people will explain anything you tell them is true. But Apple just chooses to drop large numbers of contractors instead. Old joke retold: Tim Cook is talking to his exec team about saving money. He turns to Deirdre O Brien who he has invited to the meeting to share her ideas. "We will fire 900 contractors and the one guy who works on Apple's graphical sudo product". Hands go up on all the Facetime screens, and it's clear everyone has the same question. "Why that guy?", Jeff Williams asks. Deirdre turns to Tim with a knowing look on her face. "See, I told you. No one gives a fuck about the contractors"
glanzwulf 4y ago
It's cost-cutting in the sense that after lockdowns workers are getting too much power. Salaries are still high but now they don't even come to the office? How dare they. Now you create a wave of fear and uncertainty, new hires can't negotiate a remote position, they'll take anything because they need the job. Slowly we go back to where we were and maybe even lower compensation in the process. tin foil hat on
- sfpotter 4y ago
  Why is your tin foil hat on? You do not believe what you said is the case and are downplaying its likelihood? If you do think this is the explanation, I think you can safely take the tin foil hat off. It’s hardly that unlikely, and many people think this is exactly the reason for the layoffs. Companies have every incentive to do this.
  - luckylion 4y ago
    Companies have every incentive to fire their productive employees that know their product and processes well and who they desperately need to expand their business ... hoping to maybe weaken the negotiation position of future employees they may or may not hire at some point in the future? Sorry, that contains a healthy dose of "trust me, all managers are complete idiots who would rather spend a million on hiring new people than spend 10k on retaining their employees".
    - chank 4y ago
      Problem is, in large companies, managers are so focused on short-term outlook they don't really consider or care about long-term implications.
    - vgatherps 4y ago
      > Sorry, that contains a healthy dose of "trust me, all managers are complete idiots who would rather spend a million on hiring new people than spend 10k on retaining their employees". Empirically this view is valid. The managers themselves don't even need to be stupid. A bad incentive structure (or even interaction of locally-reasonable ones) might reward bad behavior.
worthless-trash 4y ago
I believe the term is fashion firing.
bootcat 4y ago
I have to agree to this as I feel likewise. VCs and investors are perceiving they would want to copy and layoff during this season and try to bring people back to the office. They are considering a company as healthier if they can layoff extra fat from COVID season.
_8j50 4y ago
An aspect of this I don't here mentioned is "back to work" initiatives being used to force people out, are executives this dumb? Your best people will leave and then you will lay off your worst copy-catting and you're stuck with the people that absolutley need the job but can't find a better job? Wow. The next time I look for a job, this is a huge factor for me. I avoided <certain big tech co.> and even adviced someone to turned down an offer there before they started this bullshit and I am so glad I did that. I mean I get the whole "it's a business, not a charity" thing but seeing people lose their jobs because some c-suite asshole hears about a trend and acts on a whim is scary stuff. Job loss affects people wose than divorce and even as much as death of a family member! What I really want is a list of companies that didn't participate in this. I would want those companies to turn me down first!
- gumballindie 4y ago
  I avoided all of the big name companies for the same reason and it worked out well for me thus far. As a rule of thumb I stay away from companies that refer to employees as “workers” or “resources” regardless of their tempting offers. Midsize is perfect. You know, companies where you can establish eye to eye contact with colleagues regardless of title.
pie_flavor 4y ago
> I'm a Stanford professor who's studied organizational behavior for decades. And I've actually been inside an organization or two. It's cost-cutting. Companies are ludicrously bloated because caring about it is too much effort for the value; during a downturn, they care a bit more, so they trim a bit of the fat. Musk was the one that pointed out that the emperor has no clothes, but that doesn't change how long it's been that way for. There's always this blind spot with academic types observing the software industry, where they assume that the dysfunction is rumors and the real issue is something thinky and academic (see e.g. the declining value of a CS degree - couldn't've been always worthless, must be a supply-and-demand issue), because it's just about impossible to fathom how something as dysfunctional as the software industry really is could possibly stand on two feet without falling over, until you've seen it firsthand.
- benj111 4y ago
  i dont think your interpretations are mutually exclusive are / were we in the downturn? when in a downturn should a company start downsizing? i dont think all these HR departments saw some objective point pass and base the layoffs on that. theyre watching what everyone else is doing.
- ChiMan 4y ago
  Any CEO who instituted or countenanced such ridiculous amounts of unnecessary hiring needs to be the first one fired. You need punishment in capitalism. You need incentives, and you need punishment. Because where you have incentives with no punishment, somebody just has a free option—-in this case paid for by damaging employees’ careers and health, as well as investors’ capital. This insanity must end. And it will only end when you start doling out punishment to the guilty parties: The CEOs. No more CEOs “taking responsibility.” They need to be fired.
  - joyfylbanana 4y ago
    From board perspective it is difficult, because it is difficult to find CEO to do the layoffs and start strategy work again. It is just easier to keep the previous CEO if he is willing to do the dirty work.
birdymcbird 4y ago
> “We should expect this to also be true in business. A lot of companies were hiring during the pandemic, so everybody decided to hire. Now, companies are laying off, and everybody decided to follow each other and lay people off. A lot of this is just imitation. maybe companies had increased demand during pandemic? and companies selling cloud service saw more demand because zero interest rate policy mean more businesses want to take loan and spend freely on cloud infrastructure? Or maybe businesses spend freely online advertising? now rate continue to climb. world is different. cheap money regime no longer reality. this opinion piece not even close to reality. written by someone who appear not to understand how businesses work. maybe private company should function like government apparatus and keep unnecessary head count, as long as it mean profit not negative? maybe next year we just increase taxes and continue pumping money because business is just a massive charitable jobs program for ceo to get re-elected? yes rhetorical statement. with rising rate and no end in sight, proper thing to cut excess fat from businesses. focus on value and trim out moon shot idea or area in business that not give revenue. good to prepare and do EARLY and not wait to when company already bleeding. the truth in situation is many tech company especially big tech have massive grift executing at scale. workers who paid hundreds of thousands of USD in salary plus stock compensation to not do meaningful work. fake economic class of worker. musk pulled mask off this grift and everyone else followed. good on them. does this author realize 70% or more of Twitter employee fired. Twitter still work for me decent. See more new features now than last 6 year. so exactly what “critical” job all these people have?
deleted 4y ago
[deleted]
abigail95 4y ago
> These are all extra expenses that companies wouldn't incur if they had a long-term idea of how many people they needed instead of hiring and firing with every economic fluctuation If you can make predictions about real interest rates, you can see the future and you don't need to hire any staff at all - because you're God.
afrcnc 4y ago
Isn't that going to cost them in the long run when those employees get hired somewhere else?
caporaltito 4y ago
This guy again? How many years of experience working in the industry does he have again?
elzbardico 4y ago
Cui Bono? The market doesn't care. And it makes sure to reward executives that don't care. As long as they can keep making money in short-term speculation transferring wealth from some naive Ohio teachers and fireman retirement fund to their pockets this is what will happen. The line between capital and financial markets has been completely blurred a long time ago. Big finance calls all the cards, and big finance, like the House, always wins. They are not naively copying each other behavior, they are doing what wall street expects of them if they want to keep their big fat bonuses. The non-speculative shareholder is being robbed in daylight and labor is just collateral damage (not to mention that usually they are both the same person)
LatteLazy 4y ago
I actually think these layoffs are for unrelated reasons but... If WFH makes everyone more productive, then of course employers need fewer staff. That's what productivity means for workers: fewer jobs, and worse pay as more people scrable for them.
JCM9 4y ago
It’s cost cutting, but the fact that others are doing it does provide PR cover. A variety of factors, including higher interest rates, create an environment where the tolerance for a lack of profit or productivity from certain operations becomes much more limited. In some cases that impacts entire companies, where stuff like “we’re pre-revenue” is now coming under far more scrutiny. In other cases company are taking a harder look at unprofitable divisions or teams without a hard link to the bottom line and trimming some previous excesses.
ryanmcbride 4y ago
The pandemic and now the layoffs amid record profits have really emphasized to me how important it is for people in software to unionize.
btbuildem 4y ago
It's telling that my employer did not hop on the layoffs bandwagon. Internally they play it as "we're so great and kind" but I think most folks realize it's because we're having a really hard time hiring. Recently they instituted a hard 3/2 RTO, a bonehead move in my opinion -- we could've stayed remote and attracted proper talent, especially with all the recent tech layoffs. The execs tout "innovation" as one of the "core values" but their actions reek of fear of change and a desire to "go back to normal".
oh4foxsake 4y ago
[flagged]
oh4foxsake 4y ago
Corporations are just groups of individuals. Typical mimetic behavior.
up2isomorphism 4y ago
Today social science Prof is essentially a PR job, just say anything that sounds nice to public.
aaomidi 4y ago
Layoffs: short term gains for long term pain. You have no idea how many potential new product lines, etc you cut off with layoffs. You don’t realize how much your remaining employees don’t give a shit anymore. It takes a decade or so to recover from this, and it never really is the same.
animitronix 4y ago
100% agree with this, they are all afraid their stock will slide more than everyone else's if they don't follow the same playbook. Same reason they all "overhired" during the pandemic... lemmings the whole lot.
hackrnusr 4y ago
I.e, it's more about protecting compensation levels for executives ...

233 points by taubek 4y ago

The CEO class isn't inherently smarter than you. In fact, they're pretty much the same as you, albeit frequently with more sociopathic tendencies. They do the same things you see average people on the street doing, including subscribing to their own questionable fads and cargo cults.

moremetadata 4y ago
Its not just the CEO, if you realised just how much board and line management are like the 3 blind mice, trying to meet their targets, invent new targets all the while trying to survive in the corporate version of the Robert Morris Water Maze, simultaneously playing Corporate Buzzword Bingo or C B B's [1], I'm surprised so many people put up with life like this! Lemmings[2] is a very educational game on many levels. [1] https://www.bbc.co.uk/cbeebies https://www.bbc.co.uk/cbeebies [2] https://en.wikipedia.org/wiki/Lemmings_(video_game) https://en.wikipedia.org/wiki/Lemmings_(video_game)
jevgeni 4y ago
But you don't have the access of CEOs.
findthewords 4y ago
Well, they have multitudes of assistants at their disposal. Delegation multiplies one's productivity factor. It's like gaining access to multiple CPU cores.
- ithkuil 4y ago
  And like with parallel programming, there are many bugs, traps, pitfalls that make it hard to properly leverage the art of delegation
fortituded0002 4y ago
The CEO class is a mixed group of people, some of which are incredibly smart. But your point is well taken and worth considering. They are "just people" too. On a side note, I can't figure out all the responses to this comment. Everyone seems to be piling on and talking about stuff totally unrelated to your point.
awesomegoat_com 4y ago
Well, this doesn't matter. It is all about incentives. CEO class is motivated by KPIs. Focus solely on KPI creates volatility in all the other variables that are not this year's KPIs. Hiring and then firing feels like work, hence needs to be compensated. Nobody in the corporate america is compensated to explicitly do nothing, even though it might be the most appropriate move in a given quarter.

bpodgursky 4y ago

The hiring was copycat behavior. The product design was copycat behavior. The market positioning was copycat behavior. The fundraising was copycat behavior. Nobody is building a business from first principles, get real. Of course it's copycat. That's fine. That's life. That's how you get through life without sitting in bed for ten hours planning how to put on a shirt. This title sounds profound until you think about it for ten seconds.

vocram 4y ago
Copying the how is ok, but copying the why it’s not. The problem here is not how companies react to a downturn, but why they think there’s one. And they are copying the whys too.
- deleted 4y ago
  [deleted]
ithkuil 4y ago
> until you think about it for ten seconds. It's not about the number of seconds that matter, but it's the direction of where your thoughts go. I hear this expression often and I don't think it's fair; it's quite condescending. The fact that you think something is obvious and if only somebody bothered really thinking about it for a moment it would be obvious to them too, is missing the reason different people come to different conclusions about things. What you think next is determined by many factors, including your goals, your biases, your prior knowledge, what you had for breakfast. And you should know that, if you think about it for ten seconds.
returnInfinity 4y ago
Everyone is now an AI company, hiring ML Engineers and PhDs.

emodendroket 4y ago

> The irony is that these same companies were talking a year ago about people as their most important asset, and now they're treating their employees pretty badly, laying them off via email or by abruptly cutting off their access to the company. These layoffs are a decision that reflects the company's values, and these companies have basically given their employees the middle finger. I have to wonder if this is entirely incidental. Sudden layoffs can also help maintain labor discipline, which a lot of business leaders felt was getting away from them.

Animats 4y ago
> Sudden layoffs can also help maintain labor discipline, which a lot of business leaders felt was getting away from them. It's probably more about that than about cutting costs. Once sufficient fear has been instilled, the next stage will probably be across-the-board pay cuts.
- Quequau 4y ago
  > Once sufficient fear has been instilled, the next stage will probably be across-the-board pay cuts. Not saying you are wrong but it's common knowledge now that the best way to secure a pay rise is to find a new job. So I expect that a fair number of employees faced with an actual wage reduction in a time of pretty significant inflation will feel motivated or even forced to find new employment. Which in turn will mean that when the firms go to replace those workers, which for the most part they eventually will want to do, they will wind up having to pay a higher wage to attract the same level of talent and competence.
  - TeMPOraL 4y ago
    > they will wind up having to pay a higher wage to attract the same level of talent and competence. Will they? 'glanzwulf here[0] is making a not so tinfoil-hat point that widespread layoffs create an atmosphere of fear. At this scale, the people who were laid off may no longer feel so sure about their prospects of finding a new job quickly - so they might just be willing to compromise for a lower salary, just to secure some job. For the first time since... ever? software developers might experience the job market the way everyone else does - that is, one where employers hold all the power, and employees are happy to take whatever they're being offered. -- [0] - https://news.ycombinator.com/item?id=34967091 https://news.ycombinator.com/item?id=34967091

dajtxx 4y ago

Many of these companies and people are producing nothing of value, so there is an argument that the companies won't be worse off afterwards. But the people will, for sure. And the company leadership should be held accountable for that in some way other than to get bigger bonuses. Did this all start before Musk bought Twitter and in his inimitable way went about reforming its workforce? If not, I'd guess a lot of other managers finally felt they had the excuse to do what they'd been wanting to, but for some reason were holding back on.

JumpCrisscross 4y ago
> lot of other managers finally felt they had the excuse to do what they'd been wanting t No man rules alone. Do you think before Musk every CEO wanted to lay everyone off, but couldn’t? Are investors punishing companies who grew responsibly and aren’t going Jack Nicholson from the Shining on their teams? Of course not. Leaders want to grow and hire and Dorsey around giving TED talks. But when creditors get uneasy and Board members what-have-you-done-for-me-lately, survivors survive, they have no choice. They must deliver. And it’s not like those creditors and Board members reign sovereign. They have their own LPs, pensions and billionaires, asking why they’re there if Treasuries yield five percent. You’re probably looking at your portfolio or grocery bill and wondering why your fund manager or manager manager can’t get you a better return, or deliver you that raise. That’s what’s causing this. When even the world’s richest man is constrained by margin loans and interest payments on debt trading at dimes on the dollar, with banks who were once friends now threatening to take it all away; by stock multiples punishing losses and leverage with existential consequences; when it all looks like it’s falling down it’s tempting to coronate someone, anyone, as sovereign. But that’s not how it works, it’s never how it worked, kings always had lenders and warlords and pretenders to the throne. Systems have momentum, and when inflation spiked and rates rose, nobody had a choice other than persisting or perishing. No man rules alone.
- sokoloff 4y ago
  Allow me to play the world’s smallest violin for the world’s richest man being constrained by margin loans (the taking of which was his own decision).

jevgeni 4y ago

It just means that its easier to get board buy-in right now for something they wanted to do for a long time.

namaria 4y ago

Looking for specific reasons for each cycle change is disingenuous. Complex systems evolve by boom and bust dynamics. It's natural and inevitable. We can't have continuous stable development of systems because actors don't have perfect knowledge.

sprash 4y ago
The boom and bust cycles are artificial and are created entirely by the central bank. We can have continuous stable development and did have it when the gold standard was still a thing.
- benj111 4y ago
  Booms and busts existed before central banks. They existed when the gold standard was a thing. Have you heard of the 'great depression'? That happen while on the gold standard. So unless your going to no true scotsman that fact...
- mind-blight 4y ago
  The great depression happened while we had the gold standard. With banks loaning money based on the value of their ledgers, you'll end up more currency in circulation than physically exists - even with a pegged dollar and no central bank. The booms and busts occur due to speculation, over-investment, and contraction when the bottom falls out. That occurs just fine with distributed banking and loans. Did 0 percent interest contribute to our current cycle? Absolutely. But these cycles exist in any economic system with capital markets
  - sprash 4y ago
    By gold standard I actually mean no fractional reserve banking. The great depression was caused by the federal reserve. As soon as you have fractional reserve banking you allow over-leveraged debts which lead immediately to boom and bust cycles. If you want to avoid those cycles simply don't allow people to spend money they don't actually have and always settle payments as early as possible (also don't allow anybody to simply print money).

trabant00 4y ago

That's too much of a simplified view. There's a feedback loop involved. Companies reducing their work force tells you about their plans for the near future regarding spending, expansion and so on. If you provide services for those companies you are not going to have enough work for your present employees, a lot of which have been recently hired to handle the now gone spending boom. So you might wanna dial back your work force. And then the companies that provide you with services enter the loop and so on. And this is only one factor. Other factors you can't simply ignore: the massive rise of interest rates, the drop in productivity per worker, the money going to the war in Ukraine. Another way to look at this, instead of copycat, is voting with your wallet the direction you think the economy is going. A form of wisdom of the crowd. https://en.wikipedia.org/wiki/Wisdom_of_the_crowd https://en.wikipedia.org/wiki/Wisdom_of_the_crowd

myspy 4y ago

I've read somewhere else that Apple did not participate in wide lay-offs which means they play their own game and don't fire what they recently acquired. Hence it makes sense that other companies have worse big picture and outlook capabilities.

nayroclade 4y ago
Apple didn’t overhire during the pandemic either, which means they avoided the mismatch between staffing and demand that other large tech firms have.
- ralfd 4y ago
  Maybe Apple simply has better management who see farther than only one quarter, but it is noteworthy that as a tech company they are also in a more physical business: making and selling boxes of hardware instead of lofty software. They were also supply-chain constraint by Asian manufacturing, which restrained them.
  - matwood 4y ago
    Apple has been conservative for a long time. Their near death is still ingrained in the company [1]. It also wasn't long ago that people were giving Apple hard time for not hiring more. [1] I was an partner in a company that nearly died, but was able to pull through and eventually do well/get acquired. Ultra conservative around hiring is a bias I know I still carry with me from the experience.
renewiltord 4y ago
Just like ChatGPT, people will explain anything you tell them is true. But Apple just chooses to drop large numbers of contractors instead. Old joke retold: Tim Cook is talking to his exec team about saving money. He turns to Deirdre O Brien who he has invited to the meeting to share her ideas. "We will fire 900 contractors and the one guy who works on Apple's graphical sudo product". Hands go up on all the Facetime screens, and it's clear everyone has the same question. "Why that guy?", Jeff Williams asks. Deirdre turns to Tim with a knowing look on her face. "See, I told you. No one gives a fuck about the contractors"

glanzwulf 4y ago

It's cost-cutting in the sense that after lockdowns workers are getting too much power. Salaries are still high but now they don't even come to the office? How dare they. Now you create a wave of fear and uncertainty, new hires can't negotiate a remote position, they'll take anything because they need the job. Slowly we go back to where we were and maybe even lower compensation in the process. tin foil hat on

sfpotter 4y ago
Why is your tin foil hat on? You do not believe what you said is the case and are downplaying its likelihood? If you do think this is the explanation, I think you can safely take the tin foil hat off. It’s hardly that unlikely, and many people think this is exactly the reason for the layoffs. Companies have every incentive to do this.
- luckylion 4y ago
  Companies have every incentive to fire their productive employees that know their product and processes well and who they desperately need to expand their business ... hoping to maybe weaken the negotiation position of future employees they may or may not hire at some point in the future? Sorry, that contains a healthy dose of "trust me, all managers are complete idiots who would rather spend a million on hiring new people than spend 10k on retaining their employees".
  - chank 4y ago
    Problem is, in large companies, managers are so focused on short-term outlook they don't really consider or care about long-term implications.
  - vgatherps 4y ago
    > Sorry, that contains a healthy dose of "trust me, all managers are complete idiots who would rather spend a million on hiring new people than spend 10k on retaining their employees". Empirically this view is valid. The managers themselves don't even need to be stupid. A bad incentive structure (or even interaction of locally-reasonable ones) might reward bad behavior.

worthless-trash 4y ago

I believe the term is fashion firing.

bootcat 4y ago

I have to agree to this as I feel likewise. VCs and investors are perceiving they would want to copy and layoff during this season and try to bring people back to the office. They are considering a company as healthier if they can layoff extra fat from COVID season.

_8j50 4y ago

An aspect of this I don't here mentioned is "back to work" initiatives being used to force people out, are executives this dumb? Your best people will leave and then you will lay off your worst copy-catting and you're stuck with the people that absolutley need the job but can't find a better job? Wow. The next time I look for a job, this is a huge factor for me. I avoided <certain big tech co.> and even adviced someone to turned down an offer there before they started this bullshit and I am so glad I did that. I mean I get the whole "it's a business, not a charity" thing but seeing people lose their jobs because some c-suite asshole hears about a trend and acts on a whim is scary stuff. Job loss affects people wose than divorce and even as much as death of a family member! What I really want is a list of companies that didn't participate in this. I would want those companies to turn me down first!

gumballindie 4y ago
I avoided all of the big name companies for the same reason and it worked out well for me thus far. As a rule of thumb I stay away from companies that refer to employees as “workers” or “resources” regardless of their tempting offers. Midsize is perfect. You know, companies where you can establish eye to eye contact with colleagues regardless of title.

pie_flavor 4y ago

> I'm a Stanford professor who's studied organizational behavior for decades. And I've actually been inside an organization or two. It's cost-cutting. Companies are ludicrously bloated because caring about it is too much effort for the value; during a downturn, they care a bit more, so they trim a bit of the fat. Musk was the one that pointed out that the emperor has no clothes, but that doesn't change how long it's been that way for. There's always this blind spot with academic types observing the software industry, where they assume that the dysfunction is rumors and the real issue is something thinky and academic (see e.g. the declining value of a CS degree - couldn't've been always worthless, must be a supply-and-demand issue), because it's just about impossible to fathom how something as dysfunctional as the software industry really is could possibly stand on two feet without falling over, until you've seen it firsthand.

benj111 4y ago
i dont think your interpretations are mutually exclusive are / were we in the downturn? when in a downturn should a company start downsizing? i dont think all these HR departments saw some objective point pass and base the layoffs on that. theyre watching what everyone else is doing.
ChiMan 4y ago
Any CEO who instituted or countenanced such ridiculous amounts of unnecessary hiring needs to be the first one fired. You need punishment in capitalism. You need incentives, and you need punishment. Because where you have incentives with no punishment, somebody just has a free option—-in this case paid for by damaging employees’ careers and health, as well as investors’ capital. This insanity must end. And it will only end when you start doling out punishment to the guilty parties: The CEOs. No more CEOs “taking responsibility.” They need to be fired.
- joyfylbanana 4y ago
  From board perspective it is difficult, because it is difficult to find CEO to do the layoffs and start strategy work again. It is just easier to keep the previous CEO if he is willing to do the dirty work.

birdymcbird 4y ago

> “We should expect this to also be true in business. A lot of companies were hiring during the pandemic, so everybody decided to hire. Now, companies are laying off, and everybody decided to follow each other and lay people off. A lot of this is just imitation. maybe companies had increased demand during pandemic? and companies selling cloud service saw more demand because zero interest rate policy mean more businesses want to take loan and spend freely on cloud infrastructure? Or maybe businesses spend freely online advertising? now rate continue to climb. world is different. cheap money regime no longer reality. this opinion piece not even close to reality. written by someone who appear not to understand how businesses work. maybe private company should function like government apparatus and keep unnecessary head count, as long as it mean profit not negative? maybe next year we just increase taxes and continue pumping money because business is just a massive charitable jobs program for ceo to get re-elected? yes rhetorical statement. with rising rate and no end in sight, proper thing to cut excess fat from businesses. focus on value and trim out moon shot idea or area in business that not give revenue. good to prepare and do EARLY and not wait to when company already bleeding. the truth in situation is many tech company especially big tech have massive grift executing at scale. workers who paid hundreds of thousands of USD in salary plus stock compensation to not do meaningful work. fake economic class of worker. musk pulled mask off this grift and everyone else followed. good on them. does this author realize 70% or more of Twitter employee fired. Twitter still work for me decent. See more new features now than last 6 year. so exactly what “critical” job all these people have?

deleted 4y ago

[deleted]

abigail95 4y ago

> These are all extra expenses that companies wouldn't incur if they had a long-term idea of how many people they needed instead of hiring and firing with every economic fluctuation If you can make predictions about real interest rates, you can see the future and you don't need to hire any staff at all - because you're God.

afrcnc 4y ago

Isn't that going to cost them in the long run when those employees get hired somewhere else?

caporaltito 4y ago

This guy again? How many years of experience working in the industry does he have again?

elzbardico 4y ago

Cui Bono? The market doesn't care. And it makes sure to reward executives that don't care. As long as they can keep making money in short-term speculation transferring wealth from some naive Ohio teachers and fireman retirement fund to their pockets this is what will happen. The line between capital and financial markets has been completely blurred a long time ago. Big finance calls all the cards, and big finance, like the House, always wins. They are not naively copying each other behavior, they are doing what wall street expects of them if they want to keep their big fat bonuses. The non-speculative shareholder is being robbed in daylight and labor is just collateral damage (not to mention that usually they are both the same person)

LatteLazy 4y ago

I actually think these layoffs are for unrelated reasons but... If WFH makes everyone more productive, then of course employers need fewer staff. That's what productivity means for workers: fewer jobs, and worse pay as more people scrable for them.

JCM9 4y ago

It’s cost cutting, but the fact that others are doing it does provide PR cover. A variety of factors, including higher interest rates, create an environment where the tolerance for a lack of profit or productivity from certain operations becomes much more limited. In some cases that impacts entire companies, where stuff like “we’re pre-revenue” is now coming under far more scrutiny. In other cases company are taking a harder look at unprofitable divisions or teams without a hard link to the bottom line and trimming some previous excesses.

ryanmcbride 4y ago

The pandemic and now the layoffs amid record profits have really emphasized to me how important it is for people in software to unionize.

btbuildem 4y ago

It's telling that my employer did not hop on the layoffs bandwagon. Internally they play it as "we're so great and kind" but I think most folks realize it's because we're having a really hard time hiring. Recently they instituted a hard 3/2 RTO, a bonehead move in my opinion -- we could've stayed remote and attracted proper talent, especially with all the recent tech layoffs. The execs tout "innovation" as one of the "core values" but their actions reek of fear of change and a desire to "go back to normal".

oh4foxsake 4y ago

[flagged]

oh4foxsake 4y ago

Corporations are just groups of individuals. Typical mimetic behavior.

up2isomorphism 4y ago

Today social science Prof is essentially a PR job, just say anything that sounds nice to public.

aaomidi 4y ago

Layoffs: short term gains for long term pain. You have no idea how many potential new product lines, etc you cut off with layoffs. You don’t realize how much your remaining employees don’t give a shit anymore. It takes a decade or so to recover from this, and it never really is the same.

animitronix 4y ago

100% agree with this, they are all afraid their stock will slide more than everyone else's if they don't follow the same playbook. Same reason they all "overhired" during the pandemic... lemmings the whole lot.

hackrnusr 4y ago

I.e, it's more about protecting compensation levels for executives ...