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My feeling is that the trend is largely reversing. People are investing in tech because they're excited about AI. I work at a very large company and we are fi

My feeling is that the trend is largely reversing. People are investing in tech because they're excited about AI. I work at a very large company and we are finally hiring again. I have also heard that Meta is asking some people they laid off earlier in the year to come back. So... I am not sure what precipitated this whole layoff trend, but people seem bored with it and are back to wanting to make money instead of save it.

ac2u 3y ago
>I am not sure what precipitated this whole layoff trend Money no longer being almost-free to borrow.
- jrockway 3y ago
  But all these companies doing layoffs have like 50 billion dollars in cash sitting in their treasuries. Are they routinely borrowing money at the multi-year timescale? My only thought is that they figure they can make more with low-risk investments than they can hiring employees. That CD will always yield 5%; who knows what hiring another person for the Foo team will yield.
  - f6v 3y ago
    I think it’s a precautionary measure. It’ll be easier to raise more money in future if you’re lean.
    - mywittyname 3y ago
      But when companies have 50-to-infinity years of runway, does that even matter? If anything, these massive companies will benefit when they can pick up struggling startups with great tech for a 1/1000th of their peak private valuation.
    - jrockway 3y ago
      I totally get why startups would want to be lean during high interest rate times; the next round of funding is never assured, and when money costs 7% a year, it's almost assured to NOT happen. You have to fight for you life under those circumstances. (The startup I work at got bought at a very good price for the acquirer as a result of the wider economic situation. It's nice to have a job though, so I can't complain.) But, Microsoft, Meta, Google, etc. are not raising money on the open market; they have treasuries and revenue. I really think there's a lot of complexity going on here; interest rates going up didn't cut consumer spending by that much, so discretionary purchases didn't decrease, which meant that people were still buying ads and funding these companies. (I guess Microsoft doesn't make any money off of ads, but Google and Meta do.) I am guessing that people didn't expect the discretionary purchases to remain steady; in the past, interest rate increase = unemployment increase = nobody buying anything, but that appears to not be happening this time. Additionally, on the tech side of things, hype about AI is giving investors a serious fear of missing out, so there is definitely a bit of investment happening. So all in all, I think these are very weird times, and it's hard for anyone to plan. You can guess, you can hope, but at the end of the day, we don't really know. We know what caused recessions in the past, but we don't know what the 10 year horizon looks like for "there is a deadly disease, everyone work from home and buy as much stuff from China as possible, oops they are all sick so only the highest bidder gets their thing, and oh btw you don't have to pay off your student loans anymore so bid away!" It made the $ worth a lot less. That's about it.
  - hn_throwaway_99 3y ago
    > My only thought is that they figure they can make more with low-risk investments than they can hiring employees. That is exactly what is going on. A lot of people don't understand that if your risky business can't make as much return as the "risk free return rate" (i.e. the rate of return on US Treasuries), the only logical thing to do (as a business owner) is close up shop, as all your hard work is earning LESS money than just dumping it in CDs. When the risk-free rate was essentially zero, or in some cases negative, people would throw around money all over the place in hopes of getting some positive return. The bar has just been raised so that is no longer the case.
    - flashback2199 3y ago
      That doesn't make sense because tech companies are not sticking cash in ~4-5% annual return treasuries, it would make sense if this were the 70s with double digits interest rates.
      - ProfessorLayton 3y ago
        But it does make sense in the broader tech context, especially for companies that need funding, which is a large portion of the companies that have conducted layoffs this year. VCs for example need to raise their own cash to invest, and investors are less likely to take a huge risk with VCs when the risk-free rate is so high.
        flashback2199 3y ago
        You're right, I just think there have been more layoffs than can be explained by a couple percent increase alone. HBR also agrees with this view.
        hn_throwaway_99 3y ago
        > I just think there have been more layoffs than can be explained by a couple percent increase alone. Sure, of course. There was also massive over-hiring during the pandemic in anticipation of some sort of "new normal" that didn't pan out. My comment was more in response to the idea of "why should interest rates affect company hiring for companies that have a ton of cash on hand and are profitable?"
oldpersonintx 3y ago
> My feeling is that the trend is largely reversing not at linkedin it ain't
- Macha 3y ago
  LinkedIn the company, sure, but that's a lagging indicator after the earlier layoffs and freezes hurt their numbers. As a user of linkedin, my inbox is the busiest it's been all year since q4 began.
  - oldpersonintx 3y ago
    lagging? they got laid off today
    - Macha 3y ago
      Yeah, they got laid off today, because of historical slower performance, because other companies had hiring freezes from 1.5 years ago to 0.5 years ago.
      - oldpersonintx 3y ago
        as opposed to getting fired for performance information from the future?
        Macha 3y ago
        As opposed to customers loudly signalling they're cutting back on hiring, and LinkedIn potentially cutting back in anticipation of leaner times. Also as opposed to the idea that others in this thread seem to be suggesting that LinkedIn knows the future so is laying off to save costs in an anticipated tougher future, as opposed to looking at their recent history and laying off based on that to appease shareholders that they're taking corrective action.
two_in_one 3y ago
Listings from Meta on Linkedin are a... significantly less exciting than 20 months ago. With lower pay and some 'AI monetization' roles. NVidia is very specific in what it wants. They want ready experts in their technologies. For exact fit experts it's not a problem. But getting into is harder than ever. Most position get more than 50 applications in 2 days and are regularly relisted. Because of luck of exact fits I suspect. Overall job market for AI engineering and related is depressing so far.

ac2u 3y ago

>I am not sure what precipitated this whole layoff trend Money no longer being almost-free to borrow.

jrockway 3y ago
But all these companies doing layoffs have like 50 billion dollars in cash sitting in their treasuries. Are they routinely borrowing money at the multi-year timescale? My only thought is that they figure they can make more with low-risk investments than they can hiring employees. That CD will always yield 5%; who knows what hiring another person for the Foo team will yield.
- f6v 3y ago
  I think it’s a precautionary measure. It’ll be easier to raise more money in future if you’re lean.
  - mywittyname 3y ago
    But when companies have 50-to-infinity years of runway, does that even matter? If anything, these massive companies will benefit when they can pick up struggling startups with great tech for a 1/1000th of their peak private valuation.
  - jrockway 3y ago
    I totally get why startups would want to be lean during high interest rate times; the next round of funding is never assured, and when money costs 7% a year, it's almost assured to NOT happen. You have to fight for you life under those circumstances. (The startup I work at got bought at a very good price for the acquirer as a result of the wider economic situation. It's nice to have a job though, so I can't complain.) But, Microsoft, Meta, Google, etc. are not raising money on the open market; they have treasuries and revenue. I really think there's a lot of complexity going on here; interest rates going up didn't cut consumer spending by that much, so discretionary purchases didn't decrease, which meant that people were still buying ads and funding these companies. (I guess Microsoft doesn't make any money off of ads, but Google and Meta do.) I am guessing that people didn't expect the discretionary purchases to remain steady; in the past, interest rate increase = unemployment increase = nobody buying anything, but that appears to not be happening this time. Additionally, on the tech side of things, hype about AI is giving investors a serious fear of missing out, so there is definitely a bit of investment happening. So all in all, I think these are very weird times, and it's hard for anyone to plan. You can guess, you can hope, but at the end of the day, we don't really know. We know what caused recessions in the past, but we don't know what the 10 year horizon looks like for "there is a deadly disease, everyone work from home and buy as much stuff from China as possible, oops they are all sick so only the highest bidder gets their thing, and oh btw you don't have to pay off your student loans anymore so bid away!" It made the $ worth a lot less. That's about it.
- hn_throwaway_99 3y ago
  > My only thought is that they figure they can make more with low-risk investments than they can hiring employees. That is exactly what is going on. A lot of people don't understand that if your risky business can't make as much return as the "risk free return rate" (i.e. the rate of return on US Treasuries), the only logical thing to do (as a business owner) is close up shop, as all your hard work is earning LESS money than just dumping it in CDs. When the risk-free rate was essentially zero, or in some cases negative, people would throw around money all over the place in hopes of getting some positive return. The bar has just been raised so that is no longer the case.
  - flashback2199 3y ago
    That doesn't make sense because tech companies are not sticking cash in ~4-5% annual return treasuries, it would make sense if this were the 70s with double digits interest rates.
    - ProfessorLayton 3y ago
      But it does make sense in the broader tech context, especially for companies that need funding, which is a large portion of the companies that have conducted layoffs this year. VCs for example need to raise their own cash to invest, and investors are less likely to take a huge risk with VCs when the risk-free rate is so high.
      - flashback2199 3y ago
        You're right, I just think there have been more layoffs than can be explained by a couple percent increase alone. HBR also agrees with this view.
        hn_throwaway_99 3y ago
        > I just think there have been more layoffs than can be explained by a couple percent increase alone. Sure, of course. There was also massive over-hiring during the pandemic in anticipation of some sort of "new normal" that didn't pan out. My comment was more in response to the idea of "why should interest rates affect company hiring for companies that have a ton of cash on hand and are profitable?"

oldpersonintx 3y ago

> My feeling is that the trend is largely reversing not at linkedin it ain't

Macha 3y ago
LinkedIn the company, sure, but that's a lagging indicator after the earlier layoffs and freezes hurt their numbers. As a user of linkedin, my inbox is the busiest it's been all year since q4 began.
- oldpersonintx 3y ago
  lagging? they got laid off today
  - Macha 3y ago
    Yeah, they got laid off today, because of historical slower performance, because other companies had hiring freezes from 1.5 years ago to 0.5 years ago.
    - oldpersonintx 3y ago
      as opposed to getting fired for performance information from the future?
      - Macha 3y ago
        As opposed to customers loudly signalling they're cutting back on hiring, and LinkedIn potentially cutting back in anticipation of leaner times. Also as opposed to the idea that others in this thread seem to be suggesting that LinkedIn knows the future so is laying off to save costs in an anticipated tougher future, as opposed to looking at their recent history and laying off based on that to appease shareholders that they're taking corrective action.

two_in_one 3y ago

Listings from Meta on Linkedin are a... significantly less exciting than 20 months ago. With lower pay and some 'AI monetization' roles. NVidia is very specific in what it wants. They want ready experts in their technologies. For exact fit experts it's not a problem. But getting into is harder than ever. Most position get more than 50 applications in 2 days and are regularly relisted. Because of luck of exact fits I suspect. Overall job market for AI engineering and related is depressing so far.