Much of this is due to the reversal of the tight hiring market.
For the past several years tech companies were desperate to hire because everyone was growing and the hiring market was tight. This inevitably results in companies loosening their hiring standards and retaining underperforming employees because they can't afford to reduce team sizes.
Layoffs combined with hiring freezes (or slowdowns) signal real stress within a company. However, many of these layoffs are single-digit percentage layoffs from companies that are still hiring across the board. That's not so much a traditional layoff as a pruning of the workforce. That pruning wasn't happening as much when hiring was tight, but now that hiring is easier and real, actual layoffs have put more good candidates back onto the market, the companies who simply collected too many underperforming employees can afford to churn some of them back out of the company. Doing it as a "layoff" makes it more palatable than going on a firing spree.
That said, when it comes to interviewing you shouldn't assume that a laid off employee was necessarily underperforming. A lot of companies don't really perform layoffs with surgical precision and will instead drop entire teams at once. I've watched great engineers get swept up in minor staff reductions simply because they were assigned to bad managers or doomed teams that they couldn't save by themselves. I've also hired great people who came right out of layoffs at other companies and I would have missed those resumes if I had been using dumb filtering rules like ignoring anyone who had been laid off.
I have to continue this train of thought. It is dangerous that people consider layoff as a performance indicator for the employee. It’s just too hard to tell.
I was laid off recently along with many others because an entire experimental project was killed because the market shifted (crypto, I know). Prior to that I’d received top performance marks and had been promoted to team lead. They gave me a great recommendation for the next gig.
It’s as easy to get a low performer who’s on a PIP and employed, as a high performer in a risky company. Hard to tell which one you’re interviewing.
I wouldn’t worry about it - it’s internet message board know-it-all syndrome.
Layoffs are financial and political decisions. Sometimes people layoff idiots when given the chance, other times they layoff the smartest people to protect their friends. I consulted at a bank where a SVP would reorganize non-core business units into his org specifically to meet his reduction target while minimizing business impact. Those people were cannon fodder from day 1.
Hiring is the same way. If you only hire pristine resumes without gaps, you’re selecting for survivors - not the same as performers. It’s more of a statement about the hirer-er than hire-ee.
> I consulted at a bank where a SVP would reorganize non-core business units into his org specifically to meet his reduction target while minimizing business impact.
You never know when you need a sacrificial lamb, eh.
> It’s more of a statement about the hirer-er than hire-ee.
Yep. Before the IPO the task came up to increase our development team size to 200 people, cause “people would rather invest money in 200 developers than in 30”. We would hire anybody who was able to say anything sapient about the task “insert an element into a double-linked list” (and were amazed when 80% of applicants were unable to pass this simple barrier).
On the other hand - when layoffs came they were rather reasonable and the worst people were let go. (None of them were among the people who passed the above-mentioned barrier though).
I’ve been programming professionally for 20+ years and I had to look this data structure up. Granted, once I reviewed it, node insertion is trivial, but I hope you gave applicants that opportunity. Or perhaps your line of work commonly deals with stuff like this.
I’ve spent my career in web and mobile product development, usually with a business focus of some kind, and it still surprises me sometimes how little I’ve used certain topics from college, like mathematics. I think most of the math I’ve used I likely learned by grade 6.
Leetcode interviewing is a hot mess, but "insert an element into a double-linked list" is literally high school computer science.
More importantly, having the general problem solving skillset to reason through this problem in 20-30 minutes seems super important to many aspects of front-end development...
Similarly to the person you’re replying to, I needed to confirm that a doubly linked list is what I thought it was because for me, high school and college were decades ago. I just haven’t had to use that knowledge in many years of professional development. Now I’ve refreshed my memory on the data structure, inserting an element is straightforward. In other words, the harder bit for me is the boring trivia of what is the data structure with this name, while the far more interesting questions how do you use it and what are its advantages and disadvantages are easy. I would expect that a good interview would focus on the more interesting parts.
Probing for information and not being too afraid of "looking dumb" to ask foundational questions about the assignment are, in fact, part of what's assessed in a leetcode-style question. If we're honest, that's probably more important than the actual problem.
At most places I've interviewed, each interview question is a 25 minute - 30 minute session. Since white-boarding the solution takes perhaps 5-10 minutes max, in this case, there's plenty of budget to refresh definitions and provide a clean interface from which the actual task begins.
Critiquing "insert into DLL" as an unreasonable question does a disservice to the "less leetcode" position :(
> Probing for information and not being too afraid of "looking dumb" to ask foundational questions about the assignment are, in fact, part of what's assessed in a leetcode-style question. If we're honest, that's probably more important than the actual problem.
Exactly! We were not looking for A+ CS students, we were looking for people we can work with.
I don’t know what high school you went to, but “literally high school computer science” at my school was “here’s how to format a business letter in Microsoft Works”.
I know only because I volunteer in AP CS classrooms. Linked Lists are covered fairly early in the course. Doubly linked list insertion is one of the standard reversed classroom (?) labs in one of those teacher's courses (but not others; we spent more time on trees in one class and one of the teachers was quite bad and spent a hilarious quantity of time on String.format). In the DLL lab the kids do just fine in an hour or so. They do not see DLLs before that but it is the final lab of the linked lists section.
My high school did not offer CS except as an independent study (you could technically do anything as an independent study, so "offer" is shorthand for "convince a teacher to let you sit in their classroom during planning period and find a way to sit for the AP CS exam").
There have existed high school CS courses since the 80s. (The AP CS exam was introduced in 1984.)
Fwiw, AP Computer Science must have gotten better.
I took AP Computer Science in High School in 2012. The whole curriculum was based on this “Grid World” Java program where a Grasshopper extends JumpingBug extends Bug or something like that, no not as an analogy for OO, the classes were literally named like this. And, the AP test asked specific questions about Grid World's implementation, so you had to learn about it even if you understood the underlying computer science concepts.
I wish we learned about linked lists. I didn’t get that until college.
Oof—I had no idea that was a thing. Especially at that age, I would have loved to learn C++, due to some misguided notions of what constitutes "real programming".
> I had to look this data structure up. Granted, once I reviewed it, node insertion is trivial, but I hope you gave applicants that opportunity.
We couldn’t - there was no Google at the time of our IPO. (More importantly there was no mobile Internet). But the reaction “please clarify what are you talking about” is absolutely sapient, so you would have passed. But note that this:
> node insertion is trivial
- is much less sapient. In my alma mater “trivial” meant that you are able without a pause to write down a proof - without a single error. And this particular task is not designed to be rushed through, there are a couple of potholes. Anyway, hire / no hire was not based upon the absolute correctness of the code. It was mainly based upon the applicant’s reaction to me pointing some “obvious” error in their code. We were not looking for A+ students, we were looking for the people we can work with.
> It is dangerous that people consider layoff as a performance indicator for the employee.
Hard agree.
I've hired high performers from dumb layoff situations like start-ups going belly-up, companies resizing, contracts getting prematurely terminated, etc. I wouldn't consider a layoff a negative metric unless the interviewee outright admitted "they were trying to get rid of me."
I'm always shocked when people bring it up as signal vs. noise in regards to interviews.
There's also always the possibility that someone is struggling in a role or company or project, bored and unmotivated or burned out, and they will be amazing for you in the role you need.
And it's also possible they were actually high performing in their last role but they managed to bruise someone's ego and wound up first on the layoff list as a result.
There is just way more to firings and layoffs than performance.
People also are only fungible to a point (depending on role). If a company makes organizational or directional changes and the role someone was hired into doesn't really exist any longer, there's no guarantee that they can do a very different role equally well and/or that the company will necessarily be interested in making a person who would never have been hired into that role from the outside work out somehow just because they're with the company already.
Mind you. Companies can do more with internal development/retraining and institutional knowledge is a thing especially with large organizations. But, at some point, no one's going to be happy.
> Companies can do more with internal development/retraining and institutional knowledge is a thing especially with large organizations
I remember, many years ago, being tasked with teaching PHP to the mainframe COBOL team - we’d retired the mainframe, and all our COBOL apps with it, but we’d kept the team, and management had struggled with finding them something else to do. It was a painful experience, they were getting it, but very slowly. Didn’t help that I wasn’t the best teacher, I had to slow myself down a lot and found that a struggle - but I was young and inclined to say “Yes” to everything.
Eventually, they were all laid-off - and pretty much straight-away found new COBOL jobs (with a higher salary too). I think, in the end, they were happier that way.
It's almost as if every human being is complex, multifaceted, and always growing. Perhaps every one of us who's interviewing and writing perf reviews would benefit from questioning a system that tries to reduce human beings to a handful of sentences on a CV.
On the other hand... grinding LeetCode is way more measurable. ;)
They've had decades to question this the moment researchers came out with evidence of the complexity of the entire matter, and the status quo failing to capture any of said complexity. 'Intuition' has still reigned till this day regardless.
Let me continue this train of thought even further. Your last sentence nails it. Even a firing for "performance" is not necessarily an indicator that the candidate before you would be a low performer at your company.
Sometimes, people are fired for "performance," when what that really means is "new manager/tech lead didn't like them." Interview enough people and you'll see this at some point. Sometimes, low performers in one environment are star performers in another. This is what happens when founders are replaced by more experienced executives, among other scenarios. Sometimes, people with impressive credentials (PhD + significant publications + previous experience, for instance) will completely bomb your interview because they can't figure out which of their language of choice's container types is suitable to the task. I literally interviewed that candidate once. Sometimes, people are fired for straight up illegal reasons that have nothing to do with performance. (This literally happened to me at a big company you've probably all heard of and used their product.)
As a company and an interviewer, the best thing for all involved is for you to have a structured process with which to evaluate all candidates for a given position, and follow it. No interview process is perfect at either selecting good candidates or rejecting bad ones, but if you have and follow a structured process, at least you should get consistent results out of your interview process, and you can calibrate your hiring bar from there. I don't want to go into much more detail regarding "structured processes," but if you search on HN for u/tokenadult's hiring comment cum copypasta (albeit an informative copypasta), most of what's there still holds true according to the best and most current research on hiring.
I was laid off a few years ago because the company that hired me hadn't actually won the contract they thought they won. Really hard to pin that on engineering's performance.
Recently laid off under conditions that I'm convinced are similar.
I was at my org for roughly 9 months, I came in as part of a large class of new hires across the entire org.
The last 4 months we were in crunch mode trying to land a big client that leadership continued saying would be a game changer for us. My eyebrow was already raised, because if one company is that much of a game changer, what happens if we don't get that client?
Sure enough, as I was texting with a friend who was spared, he let me know as soon as the last person left the office that day from layoffs, company had the weekly all-hands and announced sure enough, they didn't get the client.
I've seen this in the past, though it hasn't bitten me...
I'm really against 'pre-emptive' hiring for this reason. Its not fair to mess with people's livings just because you promised something in a contract that you can't currently fulfill.
The worst part is it isn't like they don't have another option. Could choose to hire a contractor or let people know upfront about the risk of the job not being there in a few months, but that would drive up the rates people would ask.
Given that this is the status quo, employees should adopt the same attitude. When working for an ethical employer, I'll work 48h/day if the situation requires it, but for everyone else, I'll bill them for the "quick question over the phone" outside of my agreed upon working hours; and I'll quit when someone else makes a good offer. Once a (spectacularly unethical) employer tried to pull the "think about the others in your team" stunt only to be amazed when I found them better jobs within a week and everyone else quit, too. I cannot say he learned from that experience, but I equally cannot say I regret my decision.
I have never been laid off. Not because I'm an especially good engineer, but because I have a good understanding of business and internal politics. I would have been fired from 4 of my 7 jobs eventually if I hadn't left.
That sounds pretty prideful, attributing what is also somewhat luck to your perfect insight. No amount of "understanding of business and internal politics" can prevent it. But it is better than being ignorant to it all.
I don't read it like that. Some people have a spidey sense for this sort of thing. I've only ever been laid off in my life twice. The first time I was completely blind-sided, because on a the Wednesday you have an all-hands meeting and see your name on the org chart the CEO puts up, and on Thursday they decide on a different direction. The second time was quite recent, but I already had one foot out the door, was actively interviewing, but the lay off came a little sooner than expected. Some people just pick up on the natural ebb and flow of a business and can sense when the winds are changing. I am as dumb as a box of rocks in most regards, but I have a good sense of when an organization is beginning to shift under my feet and no longer feels like a good place to stand.
To add a differentiator between laid off and fired, I've been fired twice in my life, once after I quit (toxic manager), and once when I refused to do something clearly illegal (another toxic manager).
how can you be fired after you quit? that's like somebody murdering you after you died. I'm all for asynchronous communication but some things are unavoidably sequential.
Certainly awareness of your performance, your relationship with your manager, what's happening with the company/your project etc. all may send signals that it's time to start looking elsewhere. But sometimes executive decisions happen without a lot of warning. And sometimes, to the point of a lot of the discussion here, something may be affecting the sector as a whole (or wider) so it may not be easy to find another position. A lot of people who post here seem to assume that getting a new job is something you send a few emails about and expect to get deluged with interview offers. That's not true of many people even today and certainly isn't true at all during downturns.
It also seems to conflate 'laid off' with 'fired', which makes it a little harder to understand. Is GP saying he would have been fired (for cause?) at these jobs? Or is this just using the term 'fired' in the colloquial sense of 'involuntarily terminated, for whatever reason'?
Layoffs are usually seen from a mile away. If you pay attention and don't want to go through a layoff it does not take luck or effort to leave before. I, for one, went through several layoffs that were completely predictable. I don't mind getting WARN money and some severance but some people feel that they are better looking for a job without competition from their former colleagues.
It never was. If everyone else is doing that then your value is a commodity. At some point soft skills and other differentiators come into play most of the time.
I’ve had a similar experience. It’s usually obvious to all the ground floor engineers when the building is on fire. I’ve left roles twice where shortly after there were large layoffs, including a fairly well known startup a couple years ago. My motivation is usually because I can see the company can’t be saved and I’m burned out trying.
Agree 100%. I’ve been through 4 layoffs so far and while there is some correlation with performance, politics still dominates layoff decisions especially at more senior levels.
You can be at the top of the layoff list for nothing more than voicing your criticism of company strategy at some random meeting.
I’ve seen very talented VPs go from “hero” to “zero” in the span of a month when the CEO decides to change direction and concludes those people aren’t “aligned with the new direction of the company”.
I was laid off once because the company I worked for went out of business. So there's that. Although maybe some would say it was my fault for not programming better so that the company stayed in business?
I was never laid off, but I once quit three weeks before a company went out of business. When I heard that someone's paycheck had bounced, I was out of there.
This also depends on the definition of "performance". A top performer at one company may be considered useless at another. It all depends on who they hired.
Then of course you can have poor management - someone may not be great a context switching and if manager keep asking to look at different stuff every day or if there is a ton of junior developers needing help with everything, then you may not have mental capacity to do quality work on the stuff you are measured by.
There are some layoffs but from what I’ve seen so far hiring salaries are not coming down. This to me speaks of a subset of tech companies slowing down rather than a general crash. There are plenty of companies still hiring and hiring at top rates. It seems like half of all the layoffs are in crypto which is a typical response to the underlying assets dropping 80+%. The remainder seem to be companies that are over reliant on debt-based capital responding to higher interest rates.
To get the tech slowdown you’re proposing the higher interest rates will have to shake out through all of venture capital and start-up money will have to tighten up.
Keynes had a theory that wages are sticky-down meaning they rarely decrease.
My guess is tech salaries will stagnate for a while. But with poor performance of RSUs and inflation eating into purchasing power this will essentially be a pay cut.
Options do not seem like real wages to me because unlike RSUs I’ve never been able to translate them to cash. You’re totally right. And with future expected value of options decreasing (and RSUs), base is more important than ever.
Base is important but tricky to get a large proportion of. You can negotiate some increase in base but if you want to go too aggressively getting a lot of it will lower total comp. The fact is companies pay base with cash on hand and pay options by issuing new shares. Issuing new shares doesn’t feel like real money in the same way to a lot of corporations so they are happier to do that. I agree markers are currently on a downward trend but I think RSUs are still a valuable portion of compensation. Even if they end up worth only 70% of their initial value you can get a larger total comp from a mix of RSUs and base than just base.
Options on the other hand are largely vapour in modern markets. Many start-ups are electing to stay private for time periods exceeding fifteen years. They fully expect most employees to not be able to afford the options they get because of the tax implications combined with limited ability to sell. Some services exist to try and alleviate this problem although most do so imperfectly and take a large premium for the risk and uncertain time window for the shares to become publicly tradeable. These days I mostly don’t bother looking at companies that can only offer options because they generally aren’t willing to offer a high enough base to compensate. I’d far prefer $200k base and $200k RSUs to $300k base and $100k of uncertain options. The first offer is far easier to find than the second as very few start-ups are willing to raise base to compensate people for the lack of liquidity in their options.
>Keynes had a theory that wages are sticky-down meaning they rarely decrease.
Loss aversion plus money illusion in a nut shell. Most people wouldn't agree to a paycut so employers must fire employees which is even worse for the company and the rest of the economy. This is why deflation results in mass unemployment.
depressed RSUs will likely act as a compensation adjustment. If your compensation is 50% RSU, and RSU's fall by half - then you have a 25% pay cut. With the recent market turbulence some have seen close to a 50% cut due to RSU price declines.
> For the past several years tech companies were desperate to hire because everyone was growing and the hiring market was tight.
Recruitment Tech founder here. The job market is still tight. There are two open jobs for every available person. Source: Fed Chair Jermaine Powell. This means you lay off, someone else will hire quickly.
> However, many of these layoffs are single-digit percentage layoffs from companies that are still hiring across the board. That's not so much a traditional layoff as a pruning of the workforce.
100% this is the story. The pruning seems to take two forms: classic "underperformance" and, as much as I hate this, people who just won't come back to the office, or have moved to lower cost areas and will not accept a pay cut.
> or have moved to lower cost areas and will not accept a pay cut.
Why would anyone accept a pay cut if their job is remote? I get it if location based pay is used for jobs that require in person. But how can the employer have it both ways? Why would the employer want to subsidize more expensive lifestyles for a remote position?
> I get it if location based pay is used for jobs that require in person. But how can the employer have it both ways? Why would the employer want to subsidize more expensive lifestyles for a remote position?
Employers don't pay high because CoL is high; they pay what the market allows them to pay.
Honestly, yes, because the number of FT remote jobs is not high, jobs are harder for FT remote people to find and land, and you are actually now closer to competing with offshore options, often augmenting an in-office team.
Conversely, if more employers start hiring remote, we will have remote employers competing against other remote employers, which will increase compensation. And this is the reason I’m vehemently pro-remote.
People fear loss more than they welcome gain. There is a lot of demand for good engineering talent and there just aren’t enough engineers with these skills. While many people fear that remote would decrease salaries in high col areas, I believe the opposite will happen.
Of course the second order effects are somewhat difficult to predict. If you can get SF salaries in eg Ohio, it might reduce the number of people flocking to SF reducing the talent pool.
> Why would anyone accept a pay cut if their job is remote?
People are not accepting cuts and that is leading to positions being eliminated (layoffs) as employers are realizing they can pay sometimes 50% less than their high cost of living area wages.
Because the people making hiring decisions are mostly located in high cost of living areas, which is why I'm skeptical they'll succeed with it much longer.
How many of those openings are real, and how many are fig leaves to meet policy requirements before hiring internally or to get some benefit for "job creators"?
I'm not aware of a program that awards "job creators" for saying they have an opening. For example, most tax credits for creating jobs require increased headcount and or increases in pay on payroll tax returns.
The system used to get demand numbers is a survey, and has been done the same way for decades, so it's pretty reliable compared to counting job ads on job boards. Job ads often will contain lots of duplicates (search spam) and fake jobs.
> For the past several years tech companies were desperate to hire because everyone was growing and the hiring market was tight.
I'd rather categorize it as for the past several years the managers in tech companies seize the chance to inflate their teams to boost their careers at the cost of their companies, while the leadership in those companies are just too incompetent to tell separate the Wheat from the chaff. It's not their money, after all. I mean, why the hell does DocuSign need 7000+ people? Why the funk did Uber need to build their own Slack? Why in whoever's name does Uber's ATG need to hire > 2000 people under two years to build a research project? Why did Coinbase need to have > 3000 people to build a god damn crypto exchange? Incompetence is just not enough to explain these jokers.
And the crown of the crowns, of course and again, goes to Uber: they think that k8s wouldn't scale yet their in-house crap would beat the k8s community and therefore they hire a freaking organization to build their own resource scheduler, as if Uber has "internet scale". Yeah, right.
I think this is a good theory. I almost wonder if it's an accidental synchronization of a burst of hiring caused by the FAANGs snatching candidates away from their peers and having outsized psychological impact.
Classically, the way to go from l1 manager to l2 manager to director, senior director and VP was to grow your organization in headcount terms, so in a situation where it is "hard" to hire, say Amazon is busy grinding through the entire valley, you might accidentally create a situation where everyone feels urgency but no one feels backpressure.
I have had the same thought and my only explanation is “empire building”. There are indeed companies running at full capacity; most do not.
Empire building in the small is “growing your org” and in the large is “growing your company”. Until we stop measuring company performance by customer counts and employee counts, this will probably continue.
One of my best engineers came from a layoff. He stayed with us until the end. I know he went on (after being laid off from our company) to do pretty intense stuff.
Making the statement that companies are laying off "underperforming" employees is
a gross assumption - I got laid off with 25% of the workforce at a pre-ipo company that raised 550 million USD.
Most large layoffs are happening at pre-ipo companies which raised a ton of money in 2020/2021 and were hoping to go public.
Unfortunately the tables turned since Feb 2022, investors want them to tighten belts and reduce cash burn.
>> Much of this is due to the reversal of the tight hiring market.
No idea where you are, but I'm not seeing any reversal at my job or in positions listed...
Personally, I think the layoffs are due to tech companies not hitting profit numbers the investors expected. Just like the PC market, seems people expected Amazon, FB, Netflix, etc to keep growing at 20+% yoy.
It’s a fallacy to assume there are only good and bad employees on some sort of linear scale. It’s underappreciated how much environment, management, company culture effect how an individual performs. One company’s underperformer can really be another’s superstar.
Also just pruning projects, products and divisions that aren’t panning out as well as others. In simple economic turns, when interest rates are low, investments with relatively low returns can make sense. So initiatives get staffed even if the expected value of their payoff is marginal.
When interest rates go up, there are low risk ways to get those same returns, so business expectations of ROI go up.
So projects that made sense, were being run well, but which simply aren’t likely to make high enough returns are going to get canned in these conditions. No reflection of the staff laid off in such a case at all.
The mirror image of this churn happened after the recovery from the dotcom bust.
During the bust, tech workers took ANY job, no matter how terrible, and held on for dear life so they didn't end up unemployed for 2 years. Finally, the market recovered, and companies experienced turnover as people finally had the opportunity to move to greener pastures.
> During the bust, tech workers took ANY job, no matter how terrible
Same feeling, but from a bit different perspective. During the dotcom bust I’ve learned to love layoff periods. Cause then friends and neighbors from friendly and neighborly other teams suddenly started to look for more work instead of looking for less work - and my life became a bit easier.
At the time my team of 2 (two) was handling 12 (twelve) rather simple but important projects. Steve and his team of 4 (four) in Denver was handling 1 (one) similar project. Then the bust came, and the prospect of layoffs. And here we are at the meeting where I am transferring three of my projects to Steve’s team.
After the meeting Paul, a PM from France - we enjoyed working together, asked me, puzzled: Mike, why on earth haven’t you fought to keep your projects?? And I go: Paul, I have nine more of these - do you want some?
In December of 2000, I went to a company all hands. This was a company in the networking industry, a high flyer, and a day or two before the meeting the CEO of the biggest player in the space, Cisco, announced that they were experiencing the biggest slowdown the company had ever seen, and the biggest slowdown that any of the members of the board of directors had ever seen. They were warning that they may miss, and they were even broaching the topic of having a massive inventory write-down (which, later, they would: $2B+ of written off inventory).
At the meeting, our CEO announced that he wasn't seeing any of this, that it was a Cisco problem, and that it was an indicator that we were even winning! Of course, a number of our customers were on the brink of declaring bankruptcy, including Cable and Wireless and a few others. Worldcom was about to happen.
Of course, our CEO said, not only weren't we laying off, we were going to accelerate hiring, and we did. No layoffs planned, more heads to take more of the market!
We did accelerate hiring. Our group almost doubled in the next three months with more reqs opened. One day in early April, I was the last interviewer for a candidate who had done really well and was walking the guy out. Normally at the time we'd make an offer on the spot if the interview was positive enough, we would do incremental round-tables in those days as we went, and this one was positive, so I was a little confused. We happened to walk by my manager's office as we I was seeing him out - were on our way to the elevator. He rushed to join us as and had positive things to day on the way down by gave me a look. We said goodbye and my manager says, "Yeah, there's a hiring freeze as of a few minutes ago, so all reqs closed."
A month later, the CEO denied any layoffs were pending or planned, but suggested that we do a prayer at the company all hands in April. To pray for... something? Worldcom not to go bankrupt? I don't quite remember, I was so shocked. Very explicitly, the CEO promised: "no layoffs are planned." And then, about a month later, the company did its first ever layoff.
And this brings me to the point. New companies - and there are a lot of them this round just like there were going into 2001 - suck at almost everything. They don't know what they're doing and they do a lot of idiotic stuff. I've worked at companies that peanut butter the layoff, that try and cut functions, that target non-human expenses first (such as HW prototypes or expected builds for labs or server farms), companies that target engineering first (or specific engineering disciplines, like ASICs or new boxes, where the project can, in theory if not reality, be put into hibernation for a bit), that target customer support or marketing first, and even one that targeted sales first (because there weren't any). New companies that have not done it before get stupid.
This layoff was the first ever for the company, and they had absolutely no fucking idea what they were doing. What actually happened for about half of the managers was they wanted around the cube area at 9am in the morning and did a sort of "duck duck go" in their heads, and when they approached someone they decided to lay them off or not based on whether they appeared instantaneously busy. To this day a friend who was at the same company swears that when his manager came to lay him off, "can you talk for a few minutes?" he survived entirely because he told the guy to go away because he was incredibly busy on something another team needed and could talk in an hour or two.
So yeah, don't judge people by layoffs from small or new (years) companies. Judge each candidate by what they do and can do and what they've done, not that they ended up on the wrong side of the layoff.
> the companies who simply collected too many under performing employees can afford to churn some of them back out of the company. Doing it as a "layoff" makes it more palatable than going on a firing spree.
Seems to me this implies that companies that do this, have found a way effectively measure performance and productivity. I don't think OP intends to say this, it is pretty much impossible to measure productivity of individual developers. I mean those on the team know who is or isn't contributing from day to day, but among teams and over time it is much more difficult. If someone has figured this out they should be a $billionaire by now.
I'd go further and counter that this is completely bogus claim, and yes, no one hiring should view a candidate being laid off as being related to anything performance or desirability of the candidate.
In my experience, layoffs are merely a popularity contest.
It is absolutely possible to calculate engineering productivity at the product level. The arithmetic is very simple. It’s far more difficult at the individual level, though.
Revenue per employee is one, total investment per dollar of ARR is another, and so on.
It amazes me to see high salaries at companies which are engineering heavy and the revenue per employe is significantly below the median TC for the median engineer.
All this panic about tech layoffs seems a little premature given we haven’t even begun to see the impact of rates hikes on quarterly earnings yet. Many companies still have open recs and budgets to keep hiring.
I work at a company that just laid off 18% of the workforce (Coinbase) including many people in engineering. The day this happened my email, LinkedIn, Twitter inboxes exploded with companies asking me if I knew of anyone looking for a job or if I myself had been impacted.
I reached out to many of my former colleagues who had been impacted to see if they needed help. All had multiple interviews in flight and were not having trouble finding jobs.
Aside from many crypto companies the inbound jobs were from many public and private companies and spanned many industries.
I expect tech layoffs to get worse and the white collar job market to tighten towards the end of this year and 2023.
I expect the main driver for this will be cost reduction at public and private companies in the lead up to earnings or quarterly reports. Main cost for a tech company obviously being labor.
The thing that seems so weird to me about the current state of the economy is that you have lots of "smart people" shouting pretty loudly "A recession is coming! Is going to be bad! We may already be in one!!" I don't remember any recession - not the early 90s recession, not the .com bust, not the Great Recession - having anywhere near so much foreshadowing. Sure, there were people during the .com boom saying "Umm, you know, 'eyeballs' don't pay the bills and at some point you need to actually make money" and during the 00s housing bubble "I'm not even sure lenders are using the 'can you fog a mirror' test anymore when making loans", but it wasn't particularly widespread, and large sections of the economic and policy elite actively downplayed the possibility of recession.
Now though, I see the exact opposite. Tech moguls, central bankers, VCs, etc. etc. have been warning "this is going to be really bad" now for months. But, in actuality, it's not that bad (yet). Yes, inflation is really bad, but unemployment was 3.6% in May. It still feels like many companies are having a very difficult time hiring and keeping workers.
So why the difference? I don't want to go into "conspiracy theory territory", but I do think it's pretty undeniable that there is a marked difference in "warning levels" between the current time and recessions in the past 40 years.
That's because this recession is going to be manufactured. Powell was clear, wages are rising too fast for the feds liking so they are going to crash the ship into the rocks.
> According to a transcript of the presser published by the Wall Street Journal, Powell blamed this inflation crisis, which is global, not on the proxy war in Ukraine [1] and Western sanctions on Russia [2], but rather on U.S. workers supposedly making too much money.
This is basically Russian propaganda. The author and founder of that website has a history of sympathetic covarage of authoritarian regimes (https://en.wikipedia.org/wiki/The_Grayzone). It's also funny that these far-left journalists always cite their own previous articles. Powell mentions the war in Ukraine as contributing to inflation, but since he didn't call it a "proxy war" I guess it doesn't count.
> “Employers are having difficulties filling job openings, and wages are rising at the fastest pace in many years,” Powell complained.
LOL. Definitely sounds like a complaint to me. No editorializing here. That's why Powell said this later in the press conference:
> If you think about it, if you look at the last cycle, we had a very, very—longest expansion cycle in our recorded history, and in the last two, three years, you had the benefits of this tight labor market going to people in the lower quartiles and it was—you know, racial wealth and income—not wealth but income gaps were coming down, wage gaps. So it’s a really great thing. We’d all love to get back to that place, but to get back to anything like that place, you need price stability.
People are obsessed with real estate prices going up because low interest rates result in full employment which means more people can afford to pay more for a house. The strange part is the argument that raising interest rates is going to somehow make housing more affordable. It doesn't solve the underlying problem of a lack of housing near job centres. An interest rate hike means less employment and that is ultimately what drives house prices down. It doesn't make housing more affordable, there isn't enough housing to begin with and now there won't be any jobs.
If you want to lower home prices you are going to need to stop land speculation and so far public land ownership has been the only way to do that e.g. in Singapore. The alternative is a land value tax.
This orthogonal problem needs orthogonal solutions. Money is about employment and trade, not about housing. Housing is a land allocation problem e.g. zoning.
It’s an old fashioned sports league lock out. Players salaries too high in fed’s opinion. Labor’s cut approaching 60%[1]. I think the owners prefer it at 50% if not lower.
Seems like a weird theory considering the history of that graph over the last 70 years. Not really much variation considering how much the US economy has changed.
I don’t get it? In the grandparent comment you said the number would be pushed lower. But now you’re claiming it will actually be higher. Or maybe that it just won’t change much?
Fed will want to push it back lower. Due to extremely low unemployment, it has been pushed up. they don’t update it often enough. Will probably show up in Jan 2022, then down in 23 / beyond if recesssion.
I think you're misremembering. The 2001 and 2007 crashes were very widely foretold. The current recession risk concensus seems pretty weak to me right now. That's just perception but the popular joke goes something like "economists have predicted 8 of the last 3 recessions".
The risk of an unexpected recession is much worse than a warning that doesn't come true so warnings are always pessimistic. Risk right now still feels 50/50. The next CPI report after the major Fed action will be watched very closely.
> I think you're misremembering. The 2001 and 2007 crashes were very widely foretold.
Hard disagree, at least by what I said in my comment about what "widely foretold" meant. I mean, the IMDB opening description of The Big Short starts with "When four outsiders saw what the big banks, media and government refused to..." Michael Burry, https://en.wikipedia.org/wiki/Michael_Burry, famously said he wasn't a super genius or anything, and was surprised that so few other folks saw the coming housing collapse like he did.
Again, my point is not that nobody could foresee that the recessions were coming, it's that the institutional "powers that be" - government, large corporations, VCs, etc. - actively downplayed the risk of recession. The exact opposite is happening now.
JP Morgan navigated the 2007 crisis and came out on top. They're saying recession risk is 50/50 and the S&P will end up positive for the year. There were definitely a lot of people in power and especially policy makers who put their own interests ahead of what the data tells them.
Burry is also a shameless self-promoter who has predicted a lot of disasters that haven't happened including WW3 a few years ago. There's like a dozen people who have made careers out of claiming to be the only ones that predicted the 2007 recession. If you keep predicting recessions you're bound to be right. In reality, it's just not possible to predict accurately. Here's Krugman in late 2006 presenting the data and putting the recession risk for 2007 at 2:1
Right now there are several indicators flashing and a lot that aren't. Technical data like P/E ratios, volatility, yield curves are great at predicting things that happened in the past but they just can't be relied on as being infallible.
Burry's famous because he placed a bet on a carefully researched observation connected to the sub-prime crisis before it was remotely known, and he was disbelieved.
He might have made other wrong predictions but to gloss over the above fact is a big omission.
There are the economists and there are people with skin in the game, I think there's a big difference if you're a wealth manager versus a NYT editorialist. Incidentally Krugman seems like a proponent for whatever blue tie is in power (https://www.nytimes.com/2022/01/04/opinion/2021-economic-rec...). That's different than placing bets in the tens of millions.
I'm not sure what that link is supposed to prove. 2021 was a pretty great year. Krugman is usually very sanguine about not ascribing credit policy or presidents and he didn't in that article. He doesn't disclose his holdings because he doesn't give investment advice.
And Burry definitely wasn't a rogue genius. Lots of hedge funds bet on the crash. Goldman Sachs was specifically called out for betting heavily on a crash while they were still selling mortgage assets to customers.
2021 was a fake year for growth, that's the point, because we were relying on cheap and plentiful money being subsidized by borrowed time. We'll be paying the press for a long time for the spending and helicopter money that provided demand, while supply was still limited. For Krugman, a monetarist, printing money when there are fewer goods and services in an economy, wasn't registered as a problem. Ah, but he admitted recently that he was wrong in the party line of "transient inflation" (where every private economist outside of academia and the government knew it was not going to be transient and made moves at the end of the 2021).
I'll give a slightly different view. Many of us who lived through the early 90s, the dot com bubble, and the great recession are worried about this because recessions happen pretty frequently (every 4-6 years). However, the last big downturn for the US was 2009.
While there was the Covid downturn, in general, the economy has been on the upswing for 12 years. The US Federal Reserve has appeared to manipulate that due to the Great Recession.
So, many of us are worried that roosters are coming home to roost.
That doesn't mean it will happen, but our fear is mean-reversion.
>So, many of us are worried that roosters are coming home to roost.
According to Keynes a recession only happens when the interest rate on financial capital exceeds the maximum yield of physical capital. That implies that if the interest rate is set properly, then you would expect economic recessions to never happen. Economic cycles are equivalent to oscillations in control theory and those are usually a sign that you are doing something wrong.
The expectation that when things are too good then something bad must eventually happen is completely misguided and can at best be explained by having a medium of exchange that is incapable of conducting in some transactions that humans would like to engage in and are currently engaging in.
Barter is unable to represent a lot of useful transactions. Money without credit is unable to represent a lot of useful transactions. Money with credit is unable to represent a lot of transactions. The next stage is money with credit and inflation is able to represent more transactions than without inflation and so on.
This means that if anyone tells you to go back and adopt a system that allows less transactions they mistakenly believe that the transactions you have conducted are somehow sinful/immoral or simply shouldn't happen and hence adopting their system will require undoing a lot of transactions which they consider akin to divine punishment for going against the laws of their preferred money system.
It is particularly common with Austrian economists who insist on going back to gold currency. However, because gold is unable to conduct a lot of transactions that we today take for granted, all the growth that happened because we abandoned gold shouldn't have happened according to them and we must now pay for going against the gold standard.
It is complete nonsense. If demurrage currency sits at the apex of representing the most transactions then it is entirely plausible that this economic cycle and crisis crap was pointless and inefficient nonsense to begin with and that booms and busts should only ever occur due to the real business cycle theory which as it stands only explains a subset of all recessions and not most of them because it is about external economic shocks in e.g. oil and gas prices for example.
The expectation is that interest rates will be increased to reduce inflation however this increase will also be expected to cause a recession. The hope would be that this recession would be smaller than the later recession that might be expected later from the high inflation. The theory was the same in the ’70s between Carter and Reagan. This time around, some think that raising rates won’t work in the same way to curb inflation due to differing theories about its cause. Needless to say, these things are hard to predict.
People knew there were dotcom stock bubbles (dotcom bubble) and real estate bubbles (GFC). People knew during the gas crisis that the supply shock sent inflation skyrocketing (70s). People knew that wildcat banking would cause insolvency and runs (tons of recessions and panics in the 19th century), people knew that unrestricted lending would cause the mother of all long squeezes (Great Depression).
In this case people knew that overly dovish monetary and fiscal policy would overstimulate demand. That leads to inflation, and the Fed’s job is to balance inflation with employment, and since the unemployment rates they look at very low, that means it’s time for them to raise rates to curb inflation by reducing aggregate demand. This has a knock-on effect of cooling asset prices since credit becomes more expensive and harder to get, so the market deleverages.
One difference is that expectations are set but interest rates/the money “printed” due to overly dovish policy are still in the process of being changed. So stocks are sold off and people are planning for a recession, but layoffs and the actual economic cooling haven’t happened yet.
It’s entirely possible that the fed is able to cool inflation easily (it could also resolve itself if Russia stops fighting or China stops trying to do zero-COVID) without that much of a recession, but raising rates lowers demand, so since rates may go much higher than they are, a recession is likely. In terms of assets, rising rates and subsequent recession involving lowered rates are already priced in
I've had 3 folks respond now that "hey, people knew these bubbles were coming", so apologies that my original point wasn't clear.
I wholeheartedly agree that some people saw the crashes coming, and honestly, I don't even think they were that hard to spot. I'm a pretty big fan of Jeremy Grantham, who considers himself a "bubble historian", who points out that while the timing of when bubbles pop is almost impossible to determine, the fact that one sector is in a bubble is not.
But that said, my point is that the institutional powers that be were very quiet, or in many cases actively argued against the possibility of a recession, in both the .com and Great Recession cases. In the present day the exact opposite appears to be happening. The seats of institutional power (central bankers, execs of large corporations, rich VCs, etc.) have been talking about the sky falling for a while now. That is what is really different.
> I don't remember any recession having anywhere near so much foreshadowing.
The 2008 downturn had tons of warnings, everyone I knew who had any visibility into product shipping and future orders was talking about the big slowdown in orders, across all kinds of industries.
Yeah it was the tail end of a boom in Ireland, and I remember being in a hotel during the week and every conference was public sector, zero private companies. That's when I knew things were gonna be bad.
> All this panic about tech layoffs seems a little premature given we haven’t even begun to see the impact of rates hikes on quarterly earnings yet. Many companies still have open recs and budgets to keep hiring.
I think that's the main point. Tech is going nowhere, it's crucial for the future for most countries around the globe.
Didn’t Coinbase cut its marketing budget? Advertising companies are going to feel that trend immediately, even if the quarterly numbers aren’t out yet.
While there is still a open question about how much the sudden reversal of monetary policy from the last 15 years of "hey! all the money can print" that led to companies going into debt to purchase their own stock to "oh crap, inflation, let's tighten the money supply" affects the durability of companies...
that said...
There are some very hyperbolic people comparing this to the .COM crash and also to 2008/2009.
In 2001, there was literally a site doing nothing but reporting in flamboyant terms all of the "fucked companies" going under. IIRC, it was dozens a day, at one point, with people stating that the Internet had failed, and it was all going down the drain.
In 2008, absolutely no one had any clue what was going on but everyone knew it was catastrophically bad. People were trying to guess if it would be merely the worst recession ever or the second great depression.
This so far seems like a fairly normal correction. We will see if Debt blows up and changes that.
I do not see comparisons of today with 2001 or 2008 as hyperbolic. I was working during both of those and remember them as fairly localized. Large areas were demolished, but there were plenty of other areas to move into for sharp, technically literate folks.
I had friends who, in 1999, were freshly-minted millionaires at Microstrategy, then lost it all less than a year later. And a friend who joined Lehman after his Wharton MBA in the summer of 2006. While it was not fun to be in the middle of the burst they all easily found high paying jobs within a few months.
I suspect this crisis may be worse as, after spending trillions on covid lockdowns, we have fewer options to spend our way out of this problem. The pain in both 2001 and 2008/9 was limited as the US pumped money into economy and inflated another bubble just as the previous one was bursting, and I think this option is not easy to use today. But I am not an economist, we shall see in a couple of years how this shakes up.
I went through both 2001 and 2008. Maybe crypto is relatable, but beyond that it's not close. Overall, companies have great balance sheets now. The VC funded, questionable businesses will have some washouts. But, in 2008 the whole financial system was coming apart - not localized at all. I remember going long on BofA and thinking if they go under it doesn't matter if I lose my investment.
I went through both, as well, and I'd say this is maybe similar to the early stages of the 2000/2001 contraction in that it's in particular affecting tech and happening rather slowly. Certainly not 2008, which was abrupt and severe, but didn't affect the tech sector as strongly as other sectors.
I wouldn't rule out that in 6 months the parallels with 2001 are more pronounced. However I agree it's not really close, especially with Google/Facebook/Apple/Amazon, etc. are still printing money at an incredible rate and that money continues to sprinkle into other parts of our sector.
During the .com crash there was a severe pullback in general on investment in the online startup space in general and it wasn't until the Google IPO that I felt we were truly out of that phase.
In the technology sector 2000/2001 was pretty bad. Obviously some large established companies weathered the storm relatively well. But the carnage even at companies like Cisco and EMC was immense. And they were still a lot better off than the dot-bombs. A ton of people were unemployed or underemployed for a long time and quite a few left the industry.
I was laid off right after 9/11 and I have no illusions that I was very lucky to land a job (at reduced comp with someone I knew well) quickly given that I otherwise didn't even have a nibble.
The entire crypto market is a drop in the bucket. It could all go to zero tomorrow and not have any significant impact on anything (except maybe risk sentiment for a short period).
The cheap cash situation on the other hand is the elephant in the room. Unprofitable companies are about to be under immense pressure.
I don't know if there is going to be much of a bang rather than a very long deep slide for equities (especially tech) as indices undergo P/E compression. When we start seeing 12 P/E then maybe things will turn around.
> The entire crypto market is a drop in the bucket. It could all go to zero tomorrow and not have any significant impact on anything.
That's what I used to think, until I began to see how connected it was to other parts of the economy. Once financial institutions get involved, you just don't know how connected that system is anymore.
No matter how connected it is a $1T total market cap (at it's peak) is just not large enough to matter. If it goes to zero it goes to zero, no large financial institutions will shed a tear other than for whatever fat fees they were making selling crypto derivatives to their whale clients.
The difference between now and 2001 is the reliance the rest of the world has on the tech we work on. Some of this stuff is trivial but a lot of it has people/enterprises that rely on the work we do.
We’re at the tail end of the largest asset bubble in history with near 10% inflation, war, pandemic, debt at > 100% GDP and interest rates rising from a decade near 0.
None of this is normal and what follows won’t be either.
This won’t end well and in the current environment of high inflation the fed has no choice but to raise interest rates and companies will continue to layoff into the recession.
Sure, there are differences... but in the 80s, i remember people burning their houses down to collect insurance money because of things like high interest rates, high inflation and the savings and loan scandal amongst following a huge energy crisis, a huge escallation in the cold war, political strife and so much more.
As for the fed, they're raising interest rates to cool things off - hopefully people are investing in ibonds and just maybe savings accounts will see more than 5th of 1% again so there are some upsides.
Layoffs? they're happening but unemployment still went down.
Nah, I disagree. I work in crypto (coinbase) and was working in tech in the Bay Area in 2008.
As of today, many crypto companies have money from 2021/early 2022 raises and are still hiring. In 2008 the private tech market reaction to the stock market crash was swift and brutal.
It was really hard to get a job in 2008. Today it feels like their is a big lag between stock pullbacks and jobs drying up. None of my colleagues who were laid off are having trouble getting jobs in crypto and have options in other parts of tech if they want it.
To be clear I expect the jobs situation to get worse this year and in 2023.
Judging by the number of people living paycheck-to-paycheck, I think all it will take is a slight uptick in layoffs to light the fuse for another housing crash.
My only anecdotal datum here is that I just got a new job, and every day I'm getting multiple messages from recruiters looking for developers. Full Time and Contracting.
If it's all gone to shit, I'm not seeing it here (Scotland), salaries I'm seeing are really good for the area too.
I'll start by saying that overall I agree. For engineers, specifically, things are still pretty good and companies are actively hiring.
That being said, be careful with this assumption. Recruiters aren't going to stop recruiting; that's their job. At many companies, they have a certain amount of outreach they're required to do. If they stop emailing, then all of a sudden they stop doing their job, and that means they're personally going into layoffs with bad numbers.
The jobs still exist, but behind the scenes it's likely things are changing. Companies are hiring 2 engineers instead of 10, or increasing their hiring bar significantly. The difference between "we're desperate to hire" and "we're open if someone great comes along..." is huge, but you won't see a difference in how recruiters treat you.
tl;dr = if a company cuts their hiring plan from 10 engs to 1, they still send the same number of recruiting emails.
Exactly this, recruiter messages volume might actually increase because they also know companies are tightening and so they need to lock in those placements asap before roles dry up outright.
A bit of my job ends up being a hiring management and the amount of recruitment agencies that want to send developers our way increased a lot. They are getting desperate.
Data from indeed seems to support your anecdotal datum:
"Employer demand for workers remains strong, with Indeed job postings as of June 24, 2022 54.2% above their pre-pandemic baseline. New job postings, defined as those on Indeed for seven days or less, are also well above their pre-pandemic baseline, up 68.3%. While job postings growth has slowed, the leveling out has been moderate."
Job listings is a terrible metric because it has never been cheaper to have a listing. Listings are nearly double pre-pandemic norms while actual hires are only up slightly from pre-pandemic norms. This implies that each job listing is much less effective than it was. If companies would stop throwing away 90% of resumes because they didn't exactly match the keywords for the job, perhaps this would be better. The bottom line though, is we shouldn't factor listings into any metric in much the same way that me putting a $100 trillion price tag on an item doesn't increase inflation. Track actual transactions.
The fact that there was so much hiring over the past 5-10 years meant that there was also a lot more recruiters.
And now that the hiring is reduced, the number of recruiters haven't (especially since they tend to work on commission, rather than on a fixed salary). Since they now have fewer jobs to connect people to, even they are likely to get more desperate and send more recruiting pitches to candidates, because they aren't filling as many jobs as easily and earning as much commission.
IOW, seeing an increase in recruiter activity can be completely consistent with reduced hiring (and is also consistent with increased hiring), so in itself it doesn't tell you much.
VCs react first, in the most savvy and farsighted places. That’s why we’re seeing symptoms already.
There is literally a geographical delay. Things like house price crashes take time to spread. The more remote you are, the less connected you are to the global economy. Scotland is relatively isolated.
It took a while but after the dotcom boom it was hard for even good tech people to find work. We were getting 100s of very qualified applications for every open position we had. Hopefully things don't get as bad as that this time.
> salaries I'm seeing are really good for the area too.
That I don't get. It should rather be good for the skills you have on offer, not where you are based. From my experience the offers are pretty sh*te and only gone up slightly. You also need to take into account being caught in the higher tax bracket. So if the offer is £120k you'll only get £73k, which these days isn't that much considering costs of living are not the same as 10 years ago.
That being said, I have received a couple of offers for over £150k recently so at least the trend is upwards. Still not enough for me to consider.
I'm in Western Canada and locally, provincially and nationally there's a ridiculous number of open tech positions. I guess a chart that included hiring wouldn't be highlighted on twitter...
Probably because U.S. companies hit up Canadian talent hard during the talent crunch, since they mostly speak English at a native level, live in the same time zones, and were cheaper than U.S. devs.
I don't think Canadian companies could compete and hire, so mostly just rode it out and let positions sit unfilled. I suspect there are more unfilled positions in Canada than there are unemployed devs in Canada right now, but if layoffs continue, the Canadian companies might get some relief
Yeah, I'm getting way more unsolicited job recruitments than ever before. I'm not sure if companies actually need the head counts or feel like they can pickup some cheap(er) hires now that the market is off.
Same here. My flood of emails has cut down by roughly half, and LinkedIn has far fewer notifications about matching in searches, in mails, people viewing my profile, etc.
Two months ago it was extremely busy and noisy. It might be even less than half the activity today.
I believe it is about weeding out mid-high 6-figure (and sometimes 7-figure) staff. It is understandable that 5-figure (underpaid) European devs are not affected.
Same, I currently work at fortune 10 and while I actually appreciate recruiters reaching out to me unlike many other folks, I've had to start ignoring everything on LinkedIn because I'm getting upwards of 1-5 people asking me to talk/interview per day. One company was claiming 400K salary too, so I really have no idea where any of this stands.
That´s my hope as well, however in 2001, I was getting flooded with recruiter messages at the same time that layoffs were going on. For a few months people were having pink-slip parties because they just assumed it was always 1999. It was pretty scary, to be honest.
Eventually the recruiter messages tapered off until about.. 2005.
The trueup data casts a pretty wide net. Seeing Microsoft on that list and makes the impression that layoffs are hitting FAANGs in a similar way to high growth startups, but those layoffs were due to Microsoft pulling out of Russia.
Similarly, the Tesla layoffs sounded like an office of in-house data labelers close to the tool developers in California being replaced by outsourced temp workers after the labeling tools reached maturity. It's a stretch to call that a tech layoff.
Much of this seems to be a complete miscalculation of the “new normal” of the pandemic. There was a narrative that somehow all the wild growth we had seen in the pandemic years when everyone was forcibly locked at home would sustain forever.
Of course that wasn’t going to happen and should have been obvious to anyone. The pandemic is over and the “new normal” has just gone back to the “old normal” with marginal changes in work/play patterns.
This was always going to happen, with or without current rate hikes. The rate hikes just accelerated everything by 2 years.
The great part is that tech (and other white collar) workers used that small window of opportunity where they had tremendous bargaining power to push for policies that will make it even easier to replace them.
It feels like a white collar repeat of what blue collar voters did in the US in the 70s and 80s.
> The great part is that tech (and other white collar) workers used that small window of opportunity where they had tremendous bargaining power to push for policies that will make it even easier to replace them.
Work from home. Even with the pandemic over and some big tech companies not wanting to fully commit, remote work has become dramatically more commonplace in the industry than it was a few years ago pre-pandemic. Even conservative companies like Two Sigma were forced to introduce flexible hybrid models.
The very obvious one is remote work policies. Before you were only competing against people in your immediate area or people who were willing to move. Now you're competing against everyone. That's a much broader pool of employees for companies to pull from.
That’s just one side of the coin. With remote work, your pool of available jobs also increases. At least in Europe that’s a big win since the whole continent has only 2 or 3 hours of difference.
I think there is another way of looking at it, as a way for the incredible growth in startups to the finally being understood by the new and old entrepreneurs.
Hiring and such didn't only happen in the pandemic period but also overall in almost the entire past decade(2012-2021).
Hurting the understanding of the people in the market, we are now seeing the sudden shrinking to have caused them to figure out priorities of either growth or profitability in even later phases of the business. At least that's what it seems like to me.
Because the jobs market is almost just as good in tech as always, it's just big startups and companies are shrinking and increasing margins while smaller ones in early phases of growth are still increasing jobs or just in sheer numbers.
if you want to see what people were discussing back then
blabla print money, blabla dont print money, blabla change jobs, blabla dont change jobs, its the fed's fault, its wallstreet's fault, more regulation, less regulation.. etc
or people bashing apple claiming android is going to disrupt the app store
one thing is for sure, almost all predictions going forward in the chaos are as good as random, anyone can explain the chaos in hindsight.
tbh, 16k jobs in these overvalued industries isn't much. We are adding hundreds of thousands of jobs in real industries every month. Places that make things that people want.
Tesla is kind of the exception to this but aren't there always layoffs there? seems par for the course.
Right. The same site from which this is taken shows ~400k open tech positions. That ratio is pretty decent.
Didn't Elon just say how Tesla's software needs more work? How is he going to do that without software engineers? Is Tesla even laying off software people or other employees? As a model 3 owner, the mobile app sucks, the in-car UI/UX which was cutting edge is now falling behind, let's not talk about auto-pilot/self-driving. They should be desperate for better software people.
The one common thing about "overvalued" companies is that they either need to show strong growth or their stock is going to be decimated. Management often looks at headcount as proxy of growth (I'd argue that's not always correct but that's a different question). It's extremely dangerous for the stock price of these "overvalued" companies to do massive layoffs both in term of further hurting the short term and a big impact on the long term. If they have plenty of cash they can and should be looking forward. That said this can be a reasonable excuse to offload some lower performing employees or adjust some priorities.
I know the people who were laid off were passionate about what they were working on - and this was a big disruption to their life.
But when I see some of these layoffs, my immediate thought is:
1.) Who is this company and how did they have so many people?
2.) OK, that industry experienced a COVID boon (edtech, mortgages)
3.) Taking advantage of others laying off people to get rid of poor performers
Netflix laying off employees; I'm sorry, but Netflix is mostly a catalog of garbage at an ever increasing cost, with legitimate competitors at this point.
Not to be a luddite, but a ton of tech ventures now straddle the edge of value addition to society. Value might be subjective, but its hard to see how a NFT marketplace is as valuable to society as, say, a tractor factory or steel plant.
For sure. The unicorn era is characterized by an oversupply of venture capital that gets spent well in advance of proportionate proof of utility. E.g., Theranos and WeWork. Or pretty much the whole [1] of the metastasizing crytpowhatever space. Layoffs in nonproductive companies are good, IMHO. And the sooner the better, as the longer someone spends in a bubble, the harder it is for them to adapt when the bubble pops.
"value" is an ambiguous word. I think you understand it as "something people are willing to put money into", which certainly covers gambling.
Another definition of "value" is something which increased the economic output, a positive-sum game. Thus gambling (which is zero-sum) does not create value.
Derivatives do create value in the second sense, in that they can be used to protect against risk, thus creating value (or allowing the creation of value). Yes, they can also be used for the equivalent of gambling, but they have additional uses.
Just to be clear, gambling is a net societal negative. For every dollar that goes in, less than a dollar in income comes out. It's going to happen, but let's not pretend that it's value-creating.
I don't see how you can say this. The 2 most valuable tech companies started in the 2000s are Facebook and Google. Those 2 companies are glorified Ad Companies that happen to provide a service so they can aggregate data to sell more ads.
Other than organizing the information of the internet (lately it is debatable as to how well they have been doing this lately) via google, what value addition would you say facebook or google is providing?
Same thing with Uber, now that VCs are no longer subsidizing Car rides for the entire world, it's just a more expensive cab.
What are the tech ventures that have been adding value addition to society. Based on the experience i've had with family members becomes complete Q psychos i'd say net negative on facebook's part and they dont even build anything.
a real industry makes things that people want. Farming, mining, chinese manufacturing. Coinbase is a glitch in our regulations on the other hand and we shouldn't be wasting our brightest minds on convincing people to sign up for accounts.
The world will get by if we have fewer coinbases, SaaS companies and other tech jobs. If we have fewer factories, oil refineries, meat packing plants; there will be shortages and riots.
I was recently interviewing for a lot of jobs (20 or more) and most of them were in “real” industries. Making factories more efficient, improving logistics, tools for various laboratory facilities to work more consistently and efficiently, etc.
Around 75% of what I encountered touched real products, workers, and production directly.
It seems like there is plenty of that kind of tech out there and in development right now.
The other 4 or 5 companies were strictly internet related, selling digital products to people doing things on computers.
I’m not sure if I encountered that because that’s a reasonable representation of what’s out there right now. I do know I prefer work where I get to support real people doing real things, so to speak. In any case, there are definitely roles like this out there and plenty of companies hiring.
It's amazing how for some people hatred of the political opposite causes glee when tech companies fail and people lose their jobs. People who may not be political and who probably need their job.
All of this being done on internet forums and social media produced and managed by those same people.
I don't blame em. Tech has always thought of itself as a bunch of snowflakes.
Reality is, yes, it's a new industry, but no, it's not special.
Every other industry I've been exposed to has all the same bullshit office politics. The same supposed "in jokes" that only "their industry" would understand.
Layoffs are normal and happen every year, and moreso during inflation.
Hiring is still hectic. Every company and recruiter I know is trying everything they can to find candidates. Our company is desperate to hire and we're nothing special.
One of the reasons there's so much hiring going on is a bunch of emerging markets have entered the field and are looking to build tech products. Another is that the developed world is still awash in record corporate profits and have plenty of runway to fund new development. But there has been no huge push to get more bodies into the labor market in the past 4 years so the numbers are still too low. Add to that the onward march of retirement of old staff and we're going to be in a hiring crunch for a few more years. Companies might actually have to learn to be efficient / use a few staff to get more done
Ser, we’re at a point where a company like Uber looks like it might never turn an operational profit, and is quietly planning to/has existed most markets.
If $33B in funding doesn’t get you a dollar in profit, you have to wonder if its all even worth it.
There are a lot of companies, small and medium, without enough revenue or funding to pay employee salaries, given reasonable budgeting into the next several quarters.
It does seem at this point as if companies that haven't been able to make money, sometimes for years--especially those that should have been "pandemic businesses" (looking at you meal kit subscriptions)--are going to have to significantly raise prices, cut costs, or turn out the lights.
If this is a reaction to the Fed raising rates, the layoffs aren't necessary, but by and large, these companies put short term gains above all else, which is why they are doing it.
The era of cheap money is over. Interest rates can't come down without making inflation worse. The tide is going out and we're starting to see what was real or not. Crypto got wiped out and now the tech and real estate bubbles are popping.
Home Price to Median Household Income Ratio is even worse than 2008.
We're in the early stages and I fear we're looking at a combination of the dot com crash + 2008, but longer lasting because the Fed won't be able to bail us out this time.
> Crypto got wiped out and now the tech and real estate bubbles are popping.
Crypto got wiped out but a BTC is still hovering around 20k?
> now the tech and real estate bubbles are popping
I sincerely doubt it, things might slow down and plateau but with the cost of everything going up (including rent) people will still desire a home with a mostly fixed cost. We also haven’t seen any massive layoffs yet coming from tech companies.
Also if home prices plateau and inflation rips the value of those homes are deprecating without price reductions.
Home prices have been rising far faster than inflation. The "people will always desire a home" and "plateau" talk is straight out of the Realtors playbook and is said before every pullback.
People have forgotten what a real estate downturn looks like because it's been propped up by the Fed for so long, but in the good old days (before 2004 or so) it wasn't uncommon to go through periods where the average house took 9-12 months to sell and sellers went through 3-4 Realtors before it sold. Do the Realtors still say that 6 months is the average time to sell or have they forgotten that too?
The fact is that people buy homes based on monthly payment and significant rate hikes are something we haven't seen in decades. When the monthly payment doubles housing prices go down.
Here's an example. Imagine a $500k house in Texas with a 2% property tax rate and $2k/year in home insurance. Suppose a hypothetical buyer is putting 20% down.
At a 3% mortgage interest rate, the monthly PITI payment would be $2686. At a 6% mortgage interest rate, the monthly PITI payment would be $3398.
That's a substantial increase, to be sure, but if payments had doubled then it would cost $5372, not $3398.
How high would mortgage interest rates need to be for the payment to actually double? Answer: about 12.8%. So interest rates would need to more than double from where they are today to see actual housing payments double.
+1 I totally agree with you: the US government has been printing money (if you will allow an imprecise analogy) like crazy to prop up property values and stock equities. I don't know anyone who thinks that the future will be anywhere as good as 1990-2015 (even allowing for 2001 and 2007-2008 downturns).
Both political parties service wall street and our defense industry, not regular people and don't really care about inflation and other problems that slam the poor and lower middle class. Printing money is good for the republican's and democrat's constituents (the elites).
And yet the dollar is getting stronger relative to other currencies.
This whole "government printing money" framing is very wrong.
The government was printing money and it led to tremendous growth. In other words, the economy was able to absorb the money which meant the money printing was absolutely appropriate.
However, we had several external supply side shocks due to the pandemic, and Russia's war on Ukraine, which drove the cost of goods higher. Since the US government cannot really stop Russia from killing civilians in Ukraine, or force China to get rid of its zero COVID policy, or single handedly fix the logistical breakdowns in all the shipping lines, etc, it has to rely on the only tool it has, which is cooling the economy. In essence, it's solving a supply chain shock with a demand side response, because that's all it controls.
In fact, the fact that the Fed had kept interest rates low and "printed money" meant that it has a lot of leeway to actually tackle this situation right now without causing too much pain. After several significant increases, the target rate is still 1.5-1.75, which takes us back to what the Fed had reduced it to during the peak of the 2008 crisis.
Which means that thanks to its policies, the Fed still has a lot of room to help control inflation without causing too much pain, something which wouldn't have been possible if it had prematurely raised rates earlier.
Dollar is getting stronger because other countries either had similar irresponsible policies or are a shitstorm for different reasons. All things considered, the US, with its world-dominating and extremely robust economy, is the safest bet for weathering the storm, and so the whole world buys dollars to invest in the US.
> However, we had several external supply side shocks due to the pandemic, and Russia's war on Ukraine, which drove the cost of goods higher.
just a sec. huge inflation started before Russia’s war. and it was due to the government printing huge amounts. the politicians miscalculated and we’re paying the price. Russia’s war just confirmed things will be bad, it was not the precursor, no matter what the politicians are saying.
You have it backwards. Interest rates increase the cost of doing business. They cause more inflation. Not only that, higher interest rates encourage banks to create more risky /predatory loans. They add to risk and add to cost of everything. What would reduce inflation is to improve supply side. More diverse services and goods for people to spend money on will reduce inflation. Increasing interest rates just increases inflation to the point people start going bankrupt and demand drops because people are destitute. Not a great way to do it...
Crypto is in another winter cycle. We've seen this before. The interest rate/inflation story had a part to play in that but this is a normal market cycle for this sector.
> now the tech and real estate bubbles are popping.
I don't think the real estate bubble has "popped", rather cooling off from the massively overheated valuations in 2021. I don't see a cratering of existing home values (yet).
> I fear we're looking at a combination of the dot com crash + 2008
Turn off the news that spends all its time trying to convince you the sky is falling 24/7.
> Crypto is in another winter cycle. We've seen this before. The interest rate/inflation story had a part to play in that but this is a normal market cycle for this sector.
Curious. What do you see as the forces which drive a crypto market cycle? What is a normal crypto market cycle?
As an illustration, Ray Dalio talks about short-term debt cycles as driving the economy; where the debt is (hopefully) linked to investment in activities which increase the economic outputs.
Or a business cycle is "business cycles are marked by the alternation of the phases of expansion and contraction in aggregate economic activity,... the aggregate measures of industrial production, employment, income, and sales, which are the key coincident economic indicators used for the official determination of U.S. business cycle peak and trough dates."
For crypto, I don't see anything more than simple supply/demand, and it is really unclear what drives that besides pure speculation.
If it is just driven by speculation, then what makes for "normal market cycles" in speculation?
> If it is just driven by speculation, then what makes for "normal market cycles" in speculation?
Miners are rewarded in BTC for keeping the network secure, and they sell these BTC to cover operating costs. Every four years, the mining rewards are cut in half (per the consensus protocol). Miners have less coins to sell, which results in a supply shock. The price floor between these supply shocks is ostensibly determined by economic activity outside of speculation. This has resulted in a repeating four-year market cycle. Of course this pattern will only continue until it doesn't. You can search "halving" or "halvening" for more info. https://www.investopedia.com/bitcoin-halving-4843769
Miners being rewarded in BTC doesn't explain anything about the underlying value of it that would explain a boom-bust cycle, miners are just performing the validation task but there is nothing else driving demand for BTC except for speculation. No real usage for real-life transactions, no real usage as a currency.
What exactly would drive demand for BTC except for speculation?
Parent specifically asked about the four-year market cycles and I answered that specific question.
To your more broad question, BTC demand outside speculation is driven by economic usage, despite HN's doubts. If it wasn't for that, I'd be asking the same question about its value. If you're open-minded and interested in learning, I've written up answers to that question several times. https://news.ycombinator.com/item?id=31932743
You mean the comment where your first two contentions (about Ukraine donations and PornHub only accepting crypto) are shown to be wrong in the first two comments that appear for me? Sorry to be snotty here, I guess. But the days when I can drive ten minutes and pay for groceries or a pizza or cat food or socks in crypto are not here. What besides porn, drugs, and I suppose donations should I be spending on with crypto as a US citizen today?
Re: Ukraine. My article was March 23, the second article is Apr 28. So suppose they got back online a month later, that doesn't mean they've always been online. Just like if GitHub is online right now, it doesn't mean they've never had any downtime.
> He noted that since “the national bank is not really operating, crypto is helping to perform fast transfers, to make it very quick and get results almost immediately.”
That quote is pretty unambiguous. At least for a time, Ukraine benefited from a financial system with no central point of failure.
-
Pornhub probably offers different payment methods depending on your jurisdiction. I don't know much about that industry, I was just quoting a thread from the day before where a few people confirmed.
-
You're right that in a first world country, with reliable infrastructure, paying for uncontroversial products (note uncontroversial != legal), BTC will have more friction. Even if BTC is wildly successful, I'll be happy never to buy socks with it. But there's lots of adoption in other countries, and for fringe products like the ones you listed plus VPNs, "water pipes", etc.
And why are you asking for use cases "besides" these? That's the problem with these threads. Someone says "no use cases", then I list some use cases and cite my sources, then the next reply is "actually those don't count, please give me even more use cases!" Posting in these threads is exhausting.
> Home Price to Median Household Income Ratio is even worse than 2008.
And don't forget, the people that were lucky enough to get houses before they became unaffordable have to (somehow) fork over the real estate tax on the insane valuations of those houses - which newly unemployed folks won't be able to do, so there are going to be even more houses for investment firms to buy.
From the Great Resignation to the Great Layoff. For the first time in 50 years workers started to have some leverage on employers and it only took a few months for the coordinated response to shut it down.
These types of things are almost always corrections. A granola bar company blows up and hires 500 employees in two years and builds out a massive office and gets funding. 2-3 years later the same vcs say hey you are not having hockey stick growth. Time to cut costs and lay folks off.
At any given point at any major city there are a half a dozen to a dozen of those company corrections happening at once. When talk of a recession happens a few of the companies that might have been given a bit more slack are told to shape up earlier.
So many of these are companies that boomed during covid and now are correcting.
Nobody can make any relevant conclusion here the same way nobody can really predict if we are in recession or we are heading to one.
This is again one of those where HN does not know anything about anything where $500k and $50k engineers talk about their bubbles.
Amazon is surprisingly not yet in that infographic in the latest lay offs.
When I left Amazon last year, there were effectively two Amazons. One is a group with half baked product or service ideas, throwing garbage at a wall to see what sticks. The other Amazon is like a retirement community worker, keeping legacy services alive, ensuring their security recertifications, and not much else. There isn’t even a concept of innovation.
Though I don’t work there anymore, I’m still a shareholder. I look forward to the company trimming the excess fat. If the broader market really is impacted, unfortunately, there’s going to be a massive army of H1Bs suddenly faced with leaving the country.
Re-hiring previous employees might be something Amazon does for lower wage, warehouse worker role.
I seriously doubt Amazon would rehire engineers from unregretted attrition or employees who were let go.
Amazon is actually insanely cost focused. For engineering, Amazon is more likely to hire more aggressively in India, bring more H1Bs to the US, or hire in European markets where total compensation is a fraction of what it is in the US.
During my time, a common tactic was to grow offices in India and use them as a pipeline to source H1Bs. In theory, you pay an H1B engineer the same total compensation once they’re in Seattle. Except in reality, if SDE 3 comp is $350K, you can bring an SDE 3 from India for more like $200K. You can get away with this for at least 18-24 months and get enough labor out of that person, until they realize they’re underpaid and demand a higher comp. Then, they either leave Amazon, but you already got several years of cheap labor from them. Otherwise you adjust their pay if you seriously want to keep them around.
Sad, frustrated, bitter & angry to have been apart of this. Started the job on April 4th, casual 1:1 with my manager on May 26th turned into HR stating it’s over. Not even one months severance as a good will gesture.
Why does bad planning on your part need to result in stress, anxiety, and financial concern for me?
The market is thankfully in a good place and I’m good at what I do. Did atleast one interview activity with 20+ places, it was hell, busier than a average work day. To get to final around it took 6-8 hours of interview activities.
It would be amazing to see companies that are struggling to hire to create a fast tracked interview process for those laid off.
When the cost of capital increases it's bound to have ripple effect on an entire generation of startups which were founded when money was effectively free (0% interest rate). When it's ingrained in companies' DNA that they have to grow at all cost you can't then suddenly ask them to start focusing on profit. They built this huge structure by ignored fundamentals such as cash-flow, unit-economics, business-model (selling $2 for $1). Now that they have built this 100 story sky-scrapper they can't just go back and fix the foundation. It's going to be a painful process.
It's fascinating to trace the genesis of present crash to Fed's policies post 2008 crisis. The interest rates were kept artificially low to prevent another Great Depression. 2010s saw an unprecedented rally of tech/growth stocks, fuelled by cheap capital. Growth at all cost was the mantra, hoping companies will turn profitable at some point á la Amazon. Uber's CEO hit the nail on the head when he wrote "The average employee at Uber is barely over 30, which means you've spent your career in a long and unprecedented bull run".
There were signs of rate hike in 2019 but COVID forced Fed to create trillions of $$. Which only added fuel to the fire; equities, housing, crypto saw unbelievable growth.
However the signs of inflation were clear in early-mid 2021 they were hoping it to be transitory. But when the inflation data came in late 2021 it turned out to be multi-decade high leaving Fed with no choice but to raise interest rates for the first time in more than a decade.
Which brings us back to growth companies. As Uber's CEO candidly stated "Channeling Jerry Maguire, we need to show them the money". 2020s will be all about cash flow and efficiency.
On the other hand expect to see cool innovations as it requires genuine scarcity to look for out of the box solutions. While Amazon's stock soared in 2010s their core tech was being built in 2000s while they were relentlessly driving for efficiency.
I wonder if that means the "VC-subsidized" companies are going to go out of business. I don't know the list of them, the extent of it, or anything, but from what I understand (again a source would be fantastic), companies like Uber held artificially low prices in order to show customer growth, and for some companies in the face of competition.
We have inflation and soon, reduced discretionary spending power which is becoming rapidly more obvious.
Airbnb fees are through the roof, and tons of people are choosing hotels over them again. "AirDNA" recently showed a trend towards vacancy, and if you read reddit subs on the topic you'll see hundreds of people piling on saying things like, "I used Airbnb for years, it used to be cheaper than a hotel, now not only is it drastically more expensive with the service and cleaning fees, but the hosts leave a laundry list of TODOs before I check out, and I can't check in til 4pm"
It played out similarly with app-based taxis in India (Uber, Ola). They subsidised drivers and riders and it was reliable enough that I had given up driving. However things quickly reverted once they cut-down driver subsidies. The supply tanked immediately and getting a taxi meant waiting for 20-40 minutes and face multiple cancellations. So I gave up and went back to driving. Uber/Ola are on their last breath in India.
This is interesting. To be honest, I don't see recession as much as maybe attempts to trigger it by some companies ( right now, it is clear companies are poorly equipped to deal with empowered employees ).
Yeah, easy money from FED is drying up for banks ( and various companies and rely on access to easy money from banks.. such as early tech ), but should that automatically mean crash?
It can still happen. While I am certainly preparing for this possibility, I dislike various CEOs saying its coming and media trumpets putting it in bold letters.
No, not automatic. But it sure increases the likelihood.
Especially after years of cheap money have allowed tremendous unproductive investment. It isn't just banks, it is every company with access to capital markets.
Unproductive investment made sense when money was free ("easy money"), but when money starts to costs, those investments get closed down. And the people those investments employed become unemployed.
> Yeah, easy money from FED is drying up for banks
It's impossible to know certainly how much and where it was having effect. Housing market was just one place, which caused a sort of wealth effect as households' equity increased. Stock buybacks might be analogous.
These mechanics have been in play since 2010? Potentially alot to roll back.
20% of the Russell 3000 are considered Zombie companies. Without easy money they will be severely harmed and many will go under. And that 20% was based on numbers when debt was cheap, no doubt it's even worse as the rate increases keep coming.
Tech leadership is using scare tactics to panic the workforce and drive down wages. Less than a year ago the same companies were blowing billions on stock buybacks. No one know's the future.
I find the comments here somewhat reassuring but my anxiety is through the roof; I feel as though I would be on the chopping block in the event of a layoff. It's one thing to hear that you're doing a good job by your team and manager but when you _keep_ hearing announcements & reading about layoffs elsewhere it really erodes away at your confidence.
Same here. This week, I made an overview of my cashflow, should my current client no longer need me. I’ll be fine but still these layoff news items are worrying me.
Layoffs seem to be up, but that's a questionable chart if ever I saw one. I doubt they have had representative coverage of the market for that whole period. With those numbers, looks like it's as much a chart of the increase in their data collection on layoffs as it is a chart on layoffs.
Some companies, before being acquired, go on a hiring spree. I guess they do it to bump up the price.
Then, when the deal is closed, there's usually a reorg involving massive layoffs, where the most affected people are usually the people that just got hired.
I wonder how many of these companies are actually having issues versus the number who are pre-emptively cutting loose people that they believe they can lose should the market actually turn.
I frequently read these and look at which areas exactly are getting dumped. I've have never read an article that said engineers are getting laid off. Most layoffs I see are overhead.
Amid the FTE layoffs, are there any stats on how many contractors FAANG+ have been laying off? I wonder if contingent workers are the first to go, or the last.
which is a tiny percentage of the labor force unless I am missing something important
it goes to show how despite all the media attention tech companies get , they are a drop in the bucket as far as the labor market is concerned (except amazon and its warehouse workers)
It reminds me of the dot com bubble in 2000. I remember clearly walking around in San Francisco, and every younger person that I saw had a scared and stunned look on their faces, realizing how most of them either were, or were going to be, screwed.
Lots of schadenfreude on my part, I must admit.
The whole conqueror of the world attitude bugged the hell out of me, when it was reallly just luck that the picked a good profession and happened to be at the "right" time to see a 400% increase in the NASDAQ, as if it was all them. I was in tech also, but it just bothered me to no end.
So of course, I see a lot of parallels, although tech workers don't seem to be quite a full of themselves now, even with the monster salaries. Emphasis on "quite."
For the past several years tech companies were desperate to hire because everyone was growing and the hiring market was tight. This inevitably results in companies loosening their hiring standards and retaining underperforming employees because they can't afford to reduce team sizes.
Layoffs combined with hiring freezes (or slowdowns) signal real stress within a company. However, many of these layoffs are single-digit percentage layoffs from companies that are still hiring across the board. That's not so much a traditional layoff as a pruning of the workforce. That pruning wasn't happening as much when hiring was tight, but now that hiring is easier and real, actual layoffs have put more good candidates back onto the market, the companies who simply collected too many underperforming employees can afford to churn some of them back out of the company. Doing it as a "layoff" makes it more palatable than going on a firing spree.
That said, when it comes to interviewing you shouldn't assume that a laid off employee was necessarily underperforming. A lot of companies don't really perform layoffs with surgical precision and will instead drop entire teams at once. I've watched great engineers get swept up in minor staff reductions simply because they were assigned to bad managers or doomed teams that they couldn't save by themselves. I've also hired great people who came right out of layoffs at other companies and I would have missed those resumes if I had been using dumb filtering rules like ignoring anyone who had been laid off.