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The real reason is 4: sending the signal to investors that they are a serious big boy company that can make the hard choices and cut budgets when they need to i

The real reason is 4: sending the signal to investors that they are a serious big boy company that can make the hard choices and cut budgets when they need to in order to continue to have YoY record profits in fiscally challenging climates.

rrr_oh_man 3y ago
This.
- rcarmo 3y ago
  Yep. AI is not going to remove jobs. It might displace a few, but the current state of the art feels a lot like Disney’s Sorceror’s Apprentice.
  - nicbou 3y ago
    After playing with AI for a bit and letting my own hype die down, I see something that will undeniably be useful and improve productivity, but still require skillful application and only help at a relatively low level. It doesn't reason or create new things, but it does useful low-level work and eliminates drudgery. In that sense it reminds me of spreadsheets and short python scripts. We've had those for a while and they have not displaced so the entire workforce.
oldpersonintx 3y ago
[dead]
aurareturn 3y ago
I think the real reason is that interest rates are high so growth will be slow for a while so they need to cut headcount in response.
- whatyesaid 3y ago
  People who cite interest rates and economy are coping hard. It's all of a sudden a factor now but never was before. Apart from dotcom specific crash, tech has seen relentless growth, until recent years where it was shown firing people had no negative effect.
  - candiodari 3y ago
    The only way I'd agree to "no negative effect" is to say that: 1) all FANGs are effectively dropping in profits, and it's because of "net-revenue": if revenue is up, it's because of new loans, new future financial obligations. 2) One exception is Facebook BUT profit growth certainly isn't what it used to be. And they certainly weren't shy about new loans either. 3) Another different exception is Apple BUT it's "very Apple" financial results: all Apple revenue sources are dropping, some fast, except for one: "services". And, yes, that one new revenue source is making up, for now, for the losses everywhere else. Does anybody seriously believe this can last more than a few quarters though? I get that apple wants the "big new thing" every decade or so. But I find it very hard to believe that service revenue increase can be the big new thing for even 2-3 years without angering every last customer Apple has. The iPhone was a total homerun, and I just refuse to believe that "service" can be even the palest of shadows compared to that. (just so we're clear: I applaud Apple for continuing to innovate, even on product lines dropping in revenue for years, that every MBA on the planet would mass-layoff the shit out of and suck the customers dry in an attempt to extract every last dollar they can) (P.S. Apple is an exception because they haven't done layoffs, which is what's supposed to make the difference. It certainly made SOME difference, but is it big enough? Time will tell)
- TomSwirly 3y ago
  > interest rates are high Interest rates are lower than they have been for most of my life, and close to the average interest rate over the last 700 years. https://bankunderground.co.uk/2017/11/06/guest-post-global-real-interest-rates-since-1311-renaissance-roots-and-rapid-reversals/ https://bankunderground.co.uk/2017/11/06/guest-post-global-r... People have simply gotten used to governments in the last twenty years trying to juice their economies by dropping interest rates more and more.
  - jeanlucas 3y ago
    What you said is factually true. But many tech companies hired aggressively when interest rates were super low. Now that rates are higher than in these last 5 years it does makes sense they want to cut costs, and layoffs are one way to do that. It reflects well on EBITDA. You know, even if they say it's because of AI you can't ignore this change in the last 10 years despite interest rates still being lower than they were your entire life. It was a significant change in the landscape and especially how investments were made in tech companies. I hope this helped you understand the previous comment.
- red-iron-pine 3y ago
  gotta flex on that EBITDA

rrr_oh_man 3y ago

This.

rcarmo 3y ago
Yep. AI is not going to remove jobs. It might displace a few, but the current state of the art feels a lot like Disney’s Sorceror’s Apprentice.
- nicbou 3y ago
  After playing with AI for a bit and letting my own hype die down, I see something that will undeniably be useful and improve productivity, but still require skillful application and only help at a relatively low level. It doesn't reason or create new things, but it does useful low-level work and eliminates drudgery. In that sense it reminds me of spreadsheets and short python scripts. We've had those for a while and they have not displaced so the entire workforce.

oldpersonintx 3y ago

[dead]

aurareturn 3y ago

I think the real reason is that interest rates are high so growth will be slow for a while so they need to cut headcount in response.

whatyesaid 3y ago
People who cite interest rates and economy are coping hard. It's all of a sudden a factor now but never was before. Apart from dotcom specific crash, tech has seen relentless growth, until recent years where it was shown firing people had no negative effect.
- candiodari 3y ago
  The only way I'd agree to "no negative effect" is to say that: 1) all FANGs are effectively dropping in profits, and it's because of "net-revenue": if revenue is up, it's because of new loans, new future financial obligations. 2) One exception is Facebook BUT profit growth certainly isn't what it used to be. And they certainly weren't shy about new loans either. 3) Another different exception is Apple BUT it's "very Apple" financial results: all Apple revenue sources are dropping, some fast, except for one: "services". And, yes, that one new revenue source is making up, for now, for the losses everywhere else. Does anybody seriously believe this can last more than a few quarters though? I get that apple wants the "big new thing" every decade or so. But I find it very hard to believe that service revenue increase can be the big new thing for even 2-3 years without angering every last customer Apple has. The iPhone was a total homerun, and I just refuse to believe that "service" can be even the palest of shadows compared to that. (just so we're clear: I applaud Apple for continuing to innovate, even on product lines dropping in revenue for years, that every MBA on the planet would mass-layoff the shit out of and suck the customers dry in an attempt to extract every last dollar they can) (P.S. Apple is an exception because they haven't done layoffs, which is what's supposed to make the difference. It certainly made SOME difference, but is it big enough? Time will tell)
TomSwirly 3y ago
> interest rates are high Interest rates are lower than they have been for most of my life, and close to the average interest rate over the last 700 years. https://bankunderground.co.uk/2017/11/06/guest-post-global-real-interest-rates-since-1311-renaissance-roots-and-rapid-reversals/ https://bankunderground.co.uk/2017/11/06/guest-post-global-r... People have simply gotten used to governments in the last twenty years trying to juice their economies by dropping interest rates more and more.
- jeanlucas 3y ago
  What you said is factually true. But many tech companies hired aggressively when interest rates were super low. Now that rates are higher than in these last 5 years it does makes sense they want to cut costs, and layoffs are one way to do that. It reflects well on EBITDA. You know, even if they say it's because of AI you can't ignore this change in the last 10 years despite interest rates still being lower than they were your entire life. It was a significant change in the landscape and especially how investments were made in tech companies. I hope this helped you understand the previous comment.
red-iron-pine 3y ago
gotta flex on that EBITDA