6 ms·

So many tech layoffs in the news. Any idea if this was just over-hiring? Twitch grew during the pandemic didn't it? Now viewership is going down. Is it isol

So many tech layoffs in the news. Any idea if this was just over-hiring? Twitch grew during the pandemic didn't it? Now viewership is going down. Is it isolated case of a business normal ups/downs, and not some general "oh my god the tech sector is crashing".

IndoCanada 3y ago
Indeed... There are plenty of unfilled jobs.
yugarinn 3y ago
Over-hiring adjustments is something I think was more common last year. By now, all companies "needing" layoffs to compensate should have already done so. This feels more like Twitch just really struggling financially, as mentioned in the article.
- guhcampos 3y ago
  For Twitch in particular I think this is a convergency both over-hiring and post pandemic business reduction. Twitch got really big during the pandemic: lots of people had nothing else to do besides sit on their computers all day playing or watching games. Viewership exploded, creatorship exploded, hiring was easy in remote, so hiring exploded. Post pandemic Viewership has likely tanked as people got back to work and school. Creatorship has also subsided as people can't play games 24/7 anymore, so any revenue growth they would have experienced over the pandemic has been likely off-set by now. They countered that with layoffs last year, as most tech companies did, but their case was not just about laying off the extra hires, they also lost business they could not recoup, so they're downsizing even more.
beanjuiceII 3y ago
its just the perfect time to cut fat(even if you don't need to) because when things are good, it looks worse to do cuts
songbird23 3y ago
i dont fully understand what amortized means but this[0] article is talking about how it could be the reason for layoffs in 2024 [0]https://blog.pragmaticengineer.com/section-174 https://blog.pragmaticengineer.com/section-174
- _heimdall 3y ago
  Amortization is basically just a way of splitting the cost of something out over multiple years to change how much you may owe in taxes. In this case, previously software engineers' salaries were considered an operating expense like any other salary, and the full amount of that was used to decrease how much profit you have to pay taxes on. Now you can only write off a portion of the salary, having to split it over multiple years' taxes instead. This is really common with R&D expenses, physical equipment, etc. The big change was that software engineers are now considered an R&D expense rather than someone working to assemble a final product, for example.
  - CoastalCoder 3y ago
    > Amortization is basically just a way of splitting the cost of something out over multiple years to change how much you may owe in taxes. Are there any non-tax reasons that companies, accountants, lenders, etc. would use the concept of amortization? I.e., is there some kind non-tax-related of financial planning that finds the concept of amortization useful for decision-making?
    - _heimdall 3y ago
      As far as I'm aware amortization is only used for tax purposes. I guess you could use the adjusted profits and losses if you had a reason to show lower profits, but as far as financial planning goes the money has already been spent so its largely a game of when you want the expense to show up on your tax bill.
    - ozymandias8 3y ago
      Some business that have spending limits like professional football clubs use amortization to make their spending look lower than it is. They can amortize the cost of new players over the length of that player's contract while accounting player sales as instant profits.
paxys 3y ago
Feels to me like tech companies saw how successful their late 2022/early 2023 layoffs were and decided to make it an annual thing.
brodo 3y ago
Maybe Twitch and others have finally moved to the "later" phase of the "grow first and make money later" strategy.
wonderwonder 3y ago
I have a feeling this is going to continue as AI / LLM's become more capable. I know I am late to the party but was messing around with chatGPT the other day to see if it could help me with a code issue I was stuck on. It blew my mind! I don't see how it and similar LLM's don't lead to massive replacement of tech workers and creatives.
- ChatGTP 3y ago
  This would imply there is an “end of work”. If these things are so good at augmenting your work, why would Google not keep their engineers, augment them with LLMs and just be more profitable and productive with the same number of people ? What does the lay off part get them ? Why be “just as productive” if you could be moar productive? The fully replacing people thing would be if we had an AGI in which case I’ll be using one to augment myself and stay on top of the game.
  - wonderwonder 3y ago
    Because that's not how the real world works. Any product has a real world limit on the amount of money it can generate. Only so many companies are going to subscribe to product X. There are only so many customers in a particular niche. Your assumption is that generating more work = more profit. The idea that just adding more engineers leads to more money is an obvious fallacy. Cutting engineers though and continuing to receive the same income is an obvious way to increase net profit.
    - ChatGTP 3y ago
      Because that's not how the real world works. Any product has a real world limit on the amount of money it can generate. Yes it is, I’ve never seen “the end of work”, have you ? Google has an unlimited amount of issues to solve. I read about them here everyday. ChatGPT is even an existential threat to their search, if not directly, then through the internet becoming a huge piece of AI spam. LLMs are not why Google is laying people off.
      - 3y ago
bmitc 3y ago
Over-hiring and restructuring explanations, i.e., excuses, are the most lame and slaps in the faces ever. Such reasons are solely management problems and due to management incompetence. I feel that regulation could be helpful here. The employer's side of at will employment should be reduced and other pressures to avoid these situations.
- lupusreal 3y ago
  Overhiring always being a mismanagement issue due to incompetence is a cute narrative for the labor-vs-capital arguments, but it's not literally true unless you believe that failing to read the future accurately is mismanagement. Management's job is to do the best they can with the forecasts they have, and no reasonable person believes that forecasts can be accurate every time.
  - kavok 3y ago
    Predicting the future is literally a core upper management job duty. It was fairly obvious and should’ve been assumed that interest rates would eventually rise.
  - bmitc 3y ago
    You can rephrase management's duties to "predicting the future" as a way to maximalize the so-called difficulties of their roles, but that's an unrealistic description. And it is in fact management's primary duty to understand the evolution of their organization and to have mitigation strategies. Simply hiring when you can and then firing at the first sign of trouble and when investors throw a hissy fit is about the most amateur, incompetent approach available. A monkey could perform that role better. I was recently laid off just a year after being hired. The layoff was described as not cost cutting but restructuring. The reality is that no restructuring has happened, morale has tanked, and attrition in key positions has occurred. Me being laid off means that management couldn't even plan out a year. Further, this company had a restructuring (i.e., layoff) in 2020 as well. If you need to "restructure" every three years, you don't know how to manage. At will employment is a poor setup because companies hold all the cards. They should have much more pressure on abiding by contracts.

IndoCanada 3y ago

Indeed... There are plenty of unfilled jobs.

yugarinn 3y ago

Over-hiring adjustments is something I think was more common last year. By now, all companies "needing" layoffs to compensate should have already done so. This feels more like Twitch just really struggling financially, as mentioned in the article.

guhcampos 3y ago
For Twitch in particular I think this is a convergency both over-hiring and post pandemic business reduction. Twitch got really big during the pandemic: lots of people had nothing else to do besides sit on their computers all day playing or watching games. Viewership exploded, creatorship exploded, hiring was easy in remote, so hiring exploded. Post pandemic Viewership has likely tanked as people got back to work and school. Creatorship has also subsided as people can't play games 24/7 anymore, so any revenue growth they would have experienced over the pandemic has been likely off-set by now. They countered that with layoffs last year, as most tech companies did, but their case was not just about laying off the extra hires, they also lost business they could not recoup, so they're downsizing even more.

beanjuiceII 3y ago

its just the perfect time to cut fat(even if you don't need to) because when things are good, it looks worse to do cuts

songbird23 3y ago

i dont fully understand what amortized means but this[0] article is talking about how it could be the reason for layoffs in 2024 [0]https://blog.pragmaticengineer.com/section-174 https://blog.pragmaticengineer.com/section-174

_heimdall 3y ago
Amortization is basically just a way of splitting the cost of something out over multiple years to change how much you may owe in taxes. In this case, previously software engineers' salaries were considered an operating expense like any other salary, and the full amount of that was used to decrease how much profit you have to pay taxes on. Now you can only write off a portion of the salary, having to split it over multiple years' taxes instead. This is really common with R&D expenses, physical equipment, etc. The big change was that software engineers are now considered an R&D expense rather than someone working to assemble a final product, for example.
- CoastalCoder 3y ago
  > Amortization is basically just a way of splitting the cost of something out over multiple years to change how much you may owe in taxes. Are there any non-tax reasons that companies, accountants, lenders, etc. would use the concept of amortization? I.e., is there some kind non-tax-related of financial planning that finds the concept of amortization useful for decision-making?
  - _heimdall 3y ago
    As far as I'm aware amortization is only used for tax purposes. I guess you could use the adjusted profits and losses if you had a reason to show lower profits, but as far as financial planning goes the money has already been spent so its largely a game of when you want the expense to show up on your tax bill.
  - ozymandias8 3y ago
    Some business that have spending limits like professional football clubs use amortization to make their spending look lower than it is. They can amortize the cost of new players over the length of that player's contract while accounting player sales as instant profits.

paxys 3y ago

Feels to me like tech companies saw how successful their late 2022/early 2023 layoffs were and decided to make it an annual thing.

brodo 3y ago

Maybe Twitch and others have finally moved to the "later" phase of the "grow first and make money later" strategy.

wonderwonder 3y ago

I have a feeling this is going to continue as AI / LLM's become more capable. I know I am late to the party but was messing around with chatGPT the other day to see if it could help me with a code issue I was stuck on. It blew my mind! I don't see how it and similar LLM's don't lead to massive replacement of tech workers and creatives.

ChatGTP 3y ago
This would imply there is an “end of work”. If these things are so good at augmenting your work, why would Google not keep their engineers, augment them with LLMs and just be more profitable and productive with the same number of people ? What does the lay off part get them ? Why be “just as productive” if you could be moar productive? The fully replacing people thing would be if we had an AGI in which case I’ll be using one to augment myself and stay on top of the game.
- wonderwonder 3y ago
  Because that's not how the real world works. Any product has a real world limit on the amount of money it can generate. Only so many companies are going to subscribe to product X. There are only so many customers in a particular niche. Your assumption is that generating more work = more profit. The idea that just adding more engineers leads to more money is an obvious fallacy. Cutting engineers though and continuing to receive the same income is an obvious way to increase net profit.
  - ChatGTP 3y ago
    Because that's not how the real world works. Any product has a real world limit on the amount of money it can generate. Yes it is, I’ve never seen “the end of work”, have you ? Google has an unlimited amount of issues to solve. I read about them here everyday. ChatGPT is even an existential threat to their search, if not directly, then through the internet becoming a huge piece of AI spam. LLMs are not why Google is laying people off.
    - 3y ago

bmitc 3y ago

Over-hiring and restructuring explanations, i.e., excuses, are the most lame and slaps in the faces ever. Such reasons are solely management problems and due to management incompetence. I feel that regulation could be helpful here. The employer's side of at will employment should be reduced and other pressures to avoid these situations.

lupusreal 3y ago
Overhiring always being a mismanagement issue due to incompetence is a cute narrative for the labor-vs-capital arguments, but it's not literally true unless you believe that failing to read the future accurately is mismanagement. Management's job is to do the best they can with the forecasts they have, and no reasonable person believes that forecasts can be accurate every time.
- kavok 3y ago
  Predicting the future is literally a core upper management job duty. It was fairly obvious and should’ve been assumed that interest rates would eventually rise.
- bmitc 3y ago
  You can rephrase management's duties to "predicting the future" as a way to maximalize the so-called difficulties of their roles, but that's an unrealistic description. And it is in fact management's primary duty to understand the evolution of their organization and to have mitigation strategies. Simply hiring when you can and then firing at the first sign of trouble and when investors throw a hissy fit is about the most amateur, incompetent approach available. A monkey could perform that role better. I was recently laid off just a year after being hired. The layoff was described as not cost cutting but restructuring. The reality is that no restructuring has happened, morale has tanked, and attrition in key positions has occurred. Me being laid off means that management couldn't even plan out a year. Further, this company had a restructuring (i.e., layoff) in 2020 as well. If you need to "restructure" every three years, you don't know how to manage. At will employment is a poor setup because companies hold all the cards. They should have much more pressure on abiding by contracts.