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Ah, more layoffs! Setting aside the things I'm feeling when reading this, I'm trying to piece together a picture, for my own curiosity, of this trend, and I'm

Ah, more layoffs! Setting aside the things I'm feeling when reading this, I'm trying to piece together a picture, for my own curiosity, of this trend, and I'm left with many questions, among those: * Are all these layoffs meaningfully based in some hard economic data (e.g. end of ZIRP and some real analytical assessments of the direction of the economy)? * Or, is this some form of corporate herd mentality? There's no malice in my comment, but I often teeter back and forth between "these collections of smart people are surely doing some data-anchored homework before making these decisions" and "nobody knows what we're doing and the easiest thing is to immediately increase profit, like my friends at that other company!" I just want to form a more realistic and objective image of how these massive companies operate, whether or not that image may seem optimistic or cynical.

kmlx 3y ago
if we're discussing averages, it's a bit of everything. there's clearly an imbalance right now and things are adjusting. if we're discussing an individual company, it depends. what i do know from some companies that i work with is this: - some have massively over-hired during covid and now they're trimming - some have been greatly affected by inflation/interest rates - some have seen sales nosedive for various reasons - some have simply replaced roles with AI
- kmlx 3y ago
  for gaming in particular: https://www.ft.com/content/cc6bd66c-6341-4367-85cc-86d274102378 https://www.ft.com/content/cc6bd66c-6341-4367-85cc-86d274102... > Game over? Industry suffers slowdown after decades-long winning streak > Sales growth in consoles and mobile apps hit as a darkening mood spreads across $200bn video games sector > The $200bn video games industry is reckoning with its biggest slowdown in 30 years, as the huge growth driven by smartphone gaming and the latest generation of consoles reaches its limits. > Hardware sales are slowing, with Sony cutting its forecast for PlayStation 5 sales this week. Consumer spending on mobile gaming declined last year, down 2 per cent to $107.3bn according to Data.ai, which forecasts low single-digit growth in 2024.
Magodo 3y ago
Every company mid sized onwards has dedicated FP&A teams that do rolling forecasts at least 2 quarters into the future and also have an operating plan (budget) decided before the FY begins. Projections go out to Wall Street. Executives look at top line summaries, upcoming revenue streams, profitability ratios and so on. Decisions are made on those numbers
WorldMaker 3y ago
Also, in addition to the other useful statements here: don't underestimate how much of a corporate herd mentality it can be. (It's not one [hard data] or the other [herd mentality], it often seems to be a conflux of "both".) It's not just "all my friends are doing it": the number of people that are board members of any company are a shallow pool. Board members often sit on multiple companies. Similarly large "professional" shareholders that take an active interest in corporate planning, have large voting blocks of corporate stock, and have an easy word with the board (if not a de facto seat on the board) are a relatively shallow pool (with some overlap). Sometimes "all my friends are doing it" is the same people telling both the goose and the gander what's good for it. Even when it isn't necessarily the exact same individual person, it can be the same "families" (sometimes literally, there is a lot of inherited wealth in the board member class, but sometimes just metaphorically in cases like mutual/hedge fund management groups that use different hands-on managers for different companies in the same industry but still have shared short term goals for their funds). Again, herd mentality is rarely the sole reason (and legally cannot be the sole stated reason because that would invite "easy" anti-trust investigations if regulators aren't asleep at the wheel), but underestimating it as a factor risks ignoring the way companies are built and the contributing factors of sometimes deeply and surprisingly shallow board and "activist" investor pools. (It also risks ignoring the warning signs of hard anti-trust investigations that could be worth doing, if regulators aren't asleep at the wheel.)
Tiktaalik 3y ago
There's been lots of discussion about how games companies staffed up during pandemic yada yada, but it's likely that these are a reflection of more long term issues. I've read elsewhere that even long before the pandemic, like 2018/2019, there were companies discussing broader industry trends that were unfavourable for AAA games and live service games.

kmlx 3y ago

if we're discussing averages, it's a bit of everything. there's clearly an imbalance right now and things are adjusting. if we're discussing an individual company, it depends. what i do know from some companies that i work with is this: - some have massively over-hired during covid and now they're trimming - some have been greatly affected by inflation/interest rates - some have seen sales nosedive for various reasons - some have simply replaced roles with AI

kmlx 3y ago
for gaming in particular: https://www.ft.com/content/cc6bd66c-6341-4367-85cc-86d274102378 https://www.ft.com/content/cc6bd66c-6341-4367-85cc-86d274102... > Game over? Industry suffers slowdown after decades-long winning streak > Sales growth in consoles and mobile apps hit as a darkening mood spreads across $200bn video games sector > The $200bn video games industry is reckoning with its biggest slowdown in 30 years, as the huge growth driven by smartphone gaming and the latest generation of consoles reaches its limits. > Hardware sales are slowing, with Sony cutting its forecast for PlayStation 5 sales this week. Consumer spending on mobile gaming declined last year, down 2 per cent to $107.3bn according to Data.ai, which forecasts low single-digit growth in 2024.

Magodo 3y ago

Every company mid sized onwards has dedicated FP&A teams that do rolling forecasts at least 2 quarters into the future and also have an operating plan (budget) decided before the FY begins. Projections go out to Wall Street. Executives look at top line summaries, upcoming revenue streams, profitability ratios and so on. Decisions are made on those numbers

WorldMaker 3y ago

Also, in addition to the other useful statements here: don't underestimate how much of a corporate herd mentality it can be. (It's not one [hard data] or the other [herd mentality], it often seems to be a conflux of "both".) It's not just "all my friends are doing it": the number of people that are board members of any company are a shallow pool. Board members often sit on multiple companies. Similarly large "professional" shareholders that take an active interest in corporate planning, have large voting blocks of corporate stock, and have an easy word with the board (if not a de facto seat on the board) are a relatively shallow pool (with some overlap). Sometimes "all my friends are doing it" is the same people telling both the goose and the gander what's good for it. Even when it isn't necessarily the exact same individual person, it can be the same "families" (sometimes literally, there is a lot of inherited wealth in the board member class, but sometimes just metaphorically in cases like mutual/hedge fund management groups that use different hands-on managers for different companies in the same industry but still have shared short term goals for their funds). Again, herd mentality is rarely the sole reason (and legally cannot be the sole stated reason because that would invite "easy" anti-trust investigations if regulators aren't asleep at the wheel), but underestimating it as a factor risks ignoring the way companies are built and the contributing factors of sometimes deeply and surprisingly shallow board and "activist" investor pools. (It also risks ignoring the warning signs of hard anti-trust investigations that could be worth doing, if regulators aren't asleep at the wheel.)

Tiktaalik 3y ago

There's been lots of discussion about how games companies staffed up during pandemic yada yada, but it's likely that these are a reflection of more long term issues. I've read elsewhere that even long before the pandemic, like 2018/2019, there were companies discussing broader industry trends that were unfavourable for AAA games and live service games.