4 ms·

Many tech giants have made huge layoffs recently. What's going on here? Does this spell the end of the era of tech growth and what will happen next?

abhiminator 4y ago
These are all symptoms of the end of 'cheap' money essentially. World's been running on QE for a long time now, and most millennials and Gen Z folks (myself included) haven't seen/lived in a world without QE. This is all regression toward the mean. The next couple years should be interesting.
- FridayoLeary 4y ago
  >The next couple years should be interesting. A pity for those who enjoyed the calm of the last two years!
yladiz 4y ago
I doubt it's the end of tech growth long term but one of the main reasons that these companies are laying people off isn't that they need to (even if some departments are overstaffed), it's that the market is demanding it and they care about their share price. Once the market decides that it's fine to hire like crazy and grow again, they'll do huge rounds of hiring.
- erulabs 4y ago
  Unfortunately (or not, depending on your politics), the main mechanism here, the interest rate, is not up to the market to decide. It's up to a small group of folks who do not have to show their work. Speculation, but the "dollar milkshake theory" seems to fit the best here, which would imply we'll probably be stuck with high interest rates for quite awhile. It's entirely possibly we never see money move as freely as it did in the past 10 years in our lifetime.
  - millzlane 4y ago
    If I, some poor guy in the ghetto is considering tightening the belt on my finances and looking ten years out, then I assume so is every other person in business with half a brain more than me is doing the same. I agree with your speculation, I do not see the money as free flowing as it once was. Anecdotally, I was recently given a worst interest rate in 2023 with a better credit score, and more income than I had in 2015.
    - laidoffamazon 4y ago
      > If I, some poor guy in the ghetto is considering tightening the belt on my finances and looking ten years out, I think you're reading too many cranks on the internet. The state of the economy is fine, significantly stronger than where it was just 3 years ago. Real consumer spending hasn't budged much and the labor market is the strongest in 50 years despite the well publicized layoffs. The dotcom boom happened under equivalent to higher interest rates than we had now. "Morning in America" happened with an unemployment rate double what it is today.
mupuff1234 4y ago
Massive over-hiring - headcount for lots of these companies more or less doubled in the last 2-3 years.
- kube-system 4y ago
  And it’s really amazing how little some of these huge companies are accomplishing with so many resources. Some comment I read recently (but I can’t find) put it in terms like “Meta spent 36 billion to make secondlife for the wii”
  - VLM 4y ago
    Its impossible to avoid the late Fred Brooks, if they spent $1B the due date would have been X, and spending the next $35B made the due date later. For a given technology you can only sensibly produce a product of complexity X, beyond which it scales at some awful exponential rate, so throwing more labor at the problem rarely works because the organizational coordination costs scale up faster than the productivity gains.
    - deleted 4y ago
      [deleted]
xeromal 4y ago
For every one of these layoff posts, look at the number of employees hired during covid and subtract what was added. Maybe add normal growth during those years assuming covid never happened and you'll land roughly where the numbers should be.

abhiminator 4y ago

These are all symptoms of the end of 'cheap' money essentially. World's been running on QE for a long time now, and most millennials and Gen Z folks (myself included) haven't seen/lived in a world without QE. This is all regression toward the mean. The next couple years should be interesting.

FridayoLeary 4y ago
>The next couple years should be interesting. A pity for those who enjoyed the calm of the last two years!

yladiz 4y ago

I doubt it's the end of tech growth long term but one of the main reasons that these companies are laying people off isn't that they need to (even if some departments are overstaffed), it's that the market is demanding it and they care about their share price. Once the market decides that it's fine to hire like crazy and grow again, they'll do huge rounds of hiring.

erulabs 4y ago
Unfortunately (or not, depending on your politics), the main mechanism here, the interest rate, is not up to the market to decide. It's up to a small group of folks who do not have to show their work. Speculation, but the "dollar milkshake theory" seems to fit the best here, which would imply we'll probably be stuck with high interest rates for quite awhile. It's entirely possibly we never see money move as freely as it did in the past 10 years in our lifetime.
- millzlane 4y ago
  If I, some poor guy in the ghetto is considering tightening the belt on my finances and looking ten years out, then I assume so is every other person in business with half a brain more than me is doing the same. I agree with your speculation, I do not see the money as free flowing as it once was. Anecdotally, I was recently given a worst interest rate in 2023 with a better credit score, and more income than I had in 2015.
  - laidoffamazon 4y ago
    > If I, some poor guy in the ghetto is considering tightening the belt on my finances and looking ten years out, I think you're reading too many cranks on the internet. The state of the economy is fine, significantly stronger than where it was just 3 years ago. Real consumer spending hasn't budged much and the labor market is the strongest in 50 years despite the well publicized layoffs. The dotcom boom happened under equivalent to higher interest rates than we had now. "Morning in America" happened with an unemployment rate double what it is today.

mupuff1234 4y ago

Massive over-hiring - headcount for lots of these companies more or less doubled in the last 2-3 years.

kube-system 4y ago
And it’s really amazing how little some of these huge companies are accomplishing with so many resources. Some comment I read recently (but I can’t find) put it in terms like “Meta spent 36 billion to make secondlife for the wii”
- VLM 4y ago
  Its impossible to avoid the late Fred Brooks, if they spent $1B the due date would have been X, and spending the next $35B made the due date later. For a given technology you can only sensibly produce a product of complexity X, beyond which it scales at some awful exponential rate, so throwing more labor at the problem rarely works because the organizational coordination costs scale up faster than the productivity gains.
  - deleted 4y ago
    [deleted]

xeromal 4y ago

For every one of these layoff posts, look at the number of employees hired during covid and subtract what was added. Maybe add normal growth during those years assuming covid never happened and you'll land roughly where the numbers should be.