Nearly 25,000 tech workers were laid off in the first weeks of 2024. Why is that?
(www.npr.org)
from L4s@lemmy.world to technology@lemmy.world on 29 Jan 2024 04:00
https://lemmy.world/post/11314067
from L4s@lemmy.world to technology@lemmy.world on 29 Jan 2024 04:00
https://lemmy.world/post/11314067
Nearly 25,000 tech workers were laid off in the first weeks of 2024. Why is that?::undefined
threaded - newest
This is the best summary I could come up with:
Last year was, by all accounts, a bloodbath for the tech industry, with more than 260,000 jobs vanishing — the worst 12 months for Silicon Valley since the dot-com crash of the early 2000s.
Now in 2024, tech company workforces have largely returned to pre-pandemic levels, inflation is half of what it was this time last year and consumer confidence is rebounding.
Yet, in the first four weeks of this year, nearly 100 tech companies, including Meta, Amazon, Microsoft, Google, TikTok and Salesforce have collectively let go of about 25,000 employees, according to layoffs.fyi, which tracks the technology sector.
All of the major tech companies conducting another wave of layoffs this year are sitting atop mountains of cash and are wildly profitable, so the job-shedding is far from a matter of necessity or survival.
Some smaller tech startups are running out of cash and facing fundraising struggles with the era of easy money now over, which has prompted workforce reductions.
If it appears as if an entire sector is experiencing a downward shift, Pfeffer argues, it takes the focus off of any single individual company — which provides cover for layoffs that are undertaken to make up for bad decisions that led to investments or strategies not paying off.
The original article contains 621 words, the summary contains 209 words. Saved 66%. I’m a bot and I’m open source!
Could it be…greed?
Americans corporations, greedy? No, surely you jest.
"Helping their stock prices so there is no reason to stop ".
No reason to stop… :)
If you are the kind of person that thinks collecting money is the reason we exists here, I guess it’s hard to see a reason to stop. Lols.
Q1 profits. It happens to some extent every year between Thanksgiving and early February. It helps the books for Q1. 1rst earnings calls of the year mean more than they should.
And when everyone is doing it it’s much easier to do…
Rinse & repeat
You don’t say
Because they all hired way too many people right after the pandemic and are just realizing they fucked up.
That’s not what the article says. The article is saying that was true last year that the hiring spree was over optimistic and needed correction. Now that is not the case, but there’s a weird knock on effect where the market has rewarded this behavior companies keep tightening to continue being rewarded. And there’s a heard mentality where if company A gets rewarded by the market for layoffs, company B faces scrutiny from major shareholders not to do the same.
I think the initial correction of layoffs kind of made sense a year ago, but this article makes me think there is something not cool happening as it keeps continuing.
The “rewarding” theory is probably true. That’s why so many people were hired to begin with. Boards were like “if we don’t hire, we’ll fall behind!” So they over-hired. Now they’re like “we can easily hire more later. Fire these losers.”
So you basically trained a ton of people on your internal systems and let them go? And you think randos will be able to pick up the slack when you need them in 12 months?
These companies are so dumb. Aren’t they growth companies? Don’t they have moonshots to work on or any good ideas for the future these people can contribute to? It’s like they became big and lost the ability to innovate.
It’s because when they become big the people on the board become less tech oriented and more business oriented, that means no vision other than next quarter numbers…
People not returning to office.
Based on what?
Execs threatening to fire people who don’t return to office, then firing a bunch of people.
nypost.com/…/remote-workers-more-likely-to-be-fir…
washingtonpost.com/…/return-office-mandates-2023-…
gizmodo.com/amazon-ceo-tells-workers-to-return-to…
Not the reasons mentioned.
WFH made some cool opportunity hires. You could access people in remote areas and pay less.
Market rev is uncertain at the moment. They all want their numbers to come in hot. When everyone else is laying off, so they get less scrutiny.
Because the economy is doing great.
Rich fuckwits’ gambling money
ughh this makes my blood boil
yeah workers are “OK” with it, yeah, no, they’re too fucking terrified they’re next to do anything about it
hate this guy
More like the workers aren’t unionized and have no voice in the matter, amirite?
well i mean yeah. but unionizing would be the thing to do about it. it’s just hard because people are scared for their job and scared to be out of a job right now, so they don’t want to take the risk. even though it’s fairly obvious that it’s a bigger risk not to…
Unions can’t stop layoffs - at best they can just change the order in which employees are laid off (First-in Last-out / seniority), I guess the process might make the company reconsider, but there’s no direct intervention.
I’m a member of a union and went through layoffs.
I think it’d only change if unions had power on the board / guaranteed share ownership, etc. as is the case in Germany (board representation with workers’ councils) and was proposed but rejected in Sweden (share ownership).
Many of us are contractors, which just means employees with no rights who you can lay off without an excuse.
How much of those were in office jobs versus work from home? I mean, with the whole back to office push, is your job safe in the office or more likely it’s all been just more “cat playing with a mouse”?
At my company, nope lol
There was massive over hiring near the end of covid. So now they are shedding again.
Everyone is cutting headcount, so everyone else is following along. Thinking this must be good we stay competitive.
It’s a pretty US focused issue though, as in European countries you can’t just fire someone like that. There’s definitely more cautious hiring though.
There hasn’t been the same purge here in Europe. I think the US tech industry is very large, and covid saw demand surge, resulting in a lot of hiring. Demand slumped which led to this. We’re not seeing the same purge in other industries. Headcount just needs to normalise again, which I think won’t take much longer. Unfortunately there is a compounding factor: interest rates. Tech was propped up by free money. Without that, we might see larger structural issues in the industry. If companies start failing then we enter a new phase in the layoffs.
Yeah very large at more at will employment so you can just Hoover up anyone and then see if you needed then later…
There was also a certain level of “denial of talent” competition among the tech giants. Hire any vaguely competent people event if practically useless so the competition doesn’t get them. It works only if you have infinite money (as in 0 interest rates) which is not the case any more.
Watch this, important. youtu.be/-653Z1val8s?feature=shared
Here is an alternative Piped link(s):
https://piped.video/-653Z1val8s?feature=shared
Piped is a privacy-respecting open-source alternative frontend to YouTube.
I’m open-source; check me out at GitHub.
.
As others stated a small portion of that was due to over-hiring, some to follow the layoff trend and some to make the earnings call look good.
But from what some experts are saying; there’s also another factor, which is even worse.
There’s a looming threat of a recession hitting in a few months (which is said to be a much bigger recession than the post-Covid one). And this recession will be tied to the Commercial Real-Estate Bubble.
They are saying that it will be like the 2009 Mortgage Crisis and will be very disruptive.
There’s this theory that companies are reducing their headcount to prepare for this recession by reducing their expenses to the minimum. Which makes sense.
For the companies without savings that is a must but the ugly part is that you see big names with huge amounts of money in the bank laying off people as well.
Well, because they don’t want to invest that money on the people, they will use all that money to buy smaller companies when the recession hits. All big tech with enough money in the bank is rooting for the recession to happen so they can buy everything for very cheap and grow even more.
Do you have any more reading on how a looming recession is will mirror 2008?
There has been a fud, fear mongering, excuse providing ‘looming recession’ every single time things are going kind of ok.
Also inflation fear stokes actual real inflation.
I think there is a bigger chance of people starting to default on their student debts and on their stupid car loans than the commercial real estate alone causing anything.
You can literally just convert office buildings into apartments if you want.
As much as I think commercial real estate is minimally linked to the rest of the economy, it’s been well established that you can’t just convert office buildings to apartments.
Floor plates aren’t cut to manage the changes to the floor plans in some cases not even being designed to carry the weight as modern office buildings often utilize floating plates so adding more walls actually would cause all kinds of issues with the walls as the building wobbles around. The plumbing doesn’t have the capacity and also is centralized in the buildings despite apartments each needing it, requiring more alterations to the floor plate. The windows requirements for bedrooms leaves most of the central space of the building unusable or everyone has kitchens and living rooms with no windows…. It’s often cheaper to demolish the building and start over than it would be to modify it.
To get a real idea of this look at apartment buildings in manhattan. They are either long and skinny towers or they are the size of a block, but have a massive quartyard running down the middle where office buildings are solid all the way through.
Exactly this. If not utilized by companies most of these office buildings will be sunken investment.
There’s a very informational video here detailing the challenges of converting office buildings into residential.
youtu.be/FQOgOhheSi4?si=Wciv_kGUWurhmBy-
Here is an alternative Piped link(s):
https://piped.video/FQOgOhheSi4?si=Wciv_kGUWurhmBy-
Piped is a privacy-respecting open-source alternative frontend to YouTube.
I’m open-source; check me out at GitHub.
old.lemmy.world/post/11314307
old.lemmy.world/comment/7121127
I didn’t mean to say it’s going to be as big as the 2008 crisis but the idea was that it’s gonna create a similar domino effect.
Here are some stuff about this.
www.jpmorgan.com/…/commercial-real-estate-trends
www2.deloitte.com/…/2024-realestate-outlook.html
…yahoo.com/…/kevin-o-leary-says-coming-230043170.…
youtu.be/YLshGvV0lRo?si=yTpYIyGLFFVv4D6i
youtu.be/Jq_6RKHJIIA?si=F43pJoeDv9FvUGCw
youtu.be/-V9yPGdubHQ?si=hdrxXJ71g3mwVyO2
I’m not an Economist but from what I understand the argument is like this:
1- Covid changed the work culture and made remote work viable
2- This in turn reduced the value of Commercial Real-Estate
3- There’s a lot of investment of Comm. real estate. And investors & owners wanted to keep the value of their assets high.
4- So there was the RTO mandates. Which was initially pushed by the investors.
5- Ukraine war creates inflation and raised interest rates. The time of free money is over.
6- Now investors push for companies to turn profit instead of growth.
7- Companies try to cut costs to please the investors. Mass layoffs happening. Startups going bankrupt.
8- Since the interest rates are still high and investors saw that turning growth into profit wasn’t that easy they are shy to put in money into new investments. Especially IT (AI excluded)
9- Investments dried up which means there’s less growth potential for companies meaning even less demand for Commercial Real-Estate. Which means whoever invested heavily (with loans) into comm. Real-Estate will go under when it’s time to pay back.
10- The banks who are heavily invested in Comm. Real-Estate will get affected meaning there will be even less money for investment causing an economic recession.
Here is an alternative Piped link(s):
https://piped.video/YLshGvV0lRo?si=yTpYIyGLFFVv4D6i
https://piped.video/Jq_6RKHJIIA?si=F43pJoeDv9FvUGCw
https://piped.video/-V9yPGdubHQ?si=hdrxXJ71g3mwVyO2
Piped is a privacy-respecting open-source alternative frontend to YouTube.
I’m open-source; check me out at GitHub.
I don’t get how there’s any connection. Sure, it sucks to own commercial real estate, or be one of the service companies that grew up to support office work, but isn’t the whole problem being that tech and other large companies no longer want to pay for that? This should be a bonanza for tech companies, saving billions of dollars that formerly went toward renting office space. Why aren’t we expecting a tech company boom?
The anticipation is not that it’ll hurt the tech companies, but the economy as a whole. A generalized economic slowdown impacts everyone, even if you specifically benefited from it.
If I could tell you exactly how it’ll unfold, I’d be using that to make a lot of money instead. It’s not even certain that it will happen.
Commercial real estate was for a long time a roughly predictable investment, and profitable.
Now profitability is severely reduced because people, including tech companies, are cutting their usage.
If the market collapses, it’s unclear how far down it’ll drag the economy, so companies are bracing for it to be bad.
Hopefully they’re wrong. Commercial real estate should have no direct impact on most tech
It shouldn’t, but there shouldn’t have been a connection between home mortgages and the auto industry either.
It’s not just the connectedness of the industry sectors, but their mutual connection to financial markets.
It won’t.
It will have indirect impact. The question is how much.
If the entire economy is down, people have less disposable income. The big income areas in tech are advertising, goods sales, monthly streaming services, and cloud compute.
Less disposable income = less people buying things they’re advertised, less people buying shit they don’t need off Amazon, less people keeping their Prime, Netflix, YouTube Premium, Spotify, or Disney+ accounts active, and less cloud compute resources needed to drive e-commerce websites.
This is probably going to work out to be a global catastrophe.
old.lemmy.world/post/11314307
old.lemmy.world/comment/7121127
I think another thing that isn’t being talked about with these layoffs, which would call for more unionization and policy making, is that “AI” is taking over these jobs.
Also when companies merge, there are “redundant” employees. So like the recent Microsoft layoffs, those were going to happen.
Surely. AI is definitely a factor. But at the same time it’s a fad right now. It’s what Blockchain was a few years ago. Everyone is trying to jump into the AI bandwagon as it’s the new cool hip thing. Sadly unlike Blockchain this is getting people fired instead of getting hired.
Even though AI creates remarkable results I don’t think it’s as mature enough as companies really think it’s to be. They are kinda gambling on that it will be able to cover the human work force before the effects of layoffs are felt by the customers.
On that account I think the number one issue is about the cost, uninformed companies think that what they are paying today is the real cost of AI. But in reality all AI offerings are actually burning money to lure customers, to make them get rid of their workforce to get them really dependent on their AI. And when they achieve enough dependency the prices will increase, then the companies will see the real cost of AI. Basically the exact same thing that happened with Streaming Services.
Another downside that people will notice after great adoption of AI may be that the variations of the results will start to look the same. If all of us use the same AI tool, giving similar prompts for our Ad campaign then most likely our Ad campaigns will look very similar, beating the most important necessity of an Ad campaign; recognition. To beat that AI should be used as a tool by capable people to ease their job and not to do their entire job.
I think it will take a few years for companies to really realize that.
I feel like something big is coming soon too. My guess is a recession like that, but i don’t know the economy enough to know. But somehow, someway, all the corporate places are firing and all the grocery stores are adding security layers in my country (expecting more thefts due to a down trend of money?).
Just feels like somethings off and all the rich companies with economic analysis teams are already putting in their action plans.
Aggressive targets weren’t hit so the c levels are harvesting skulls to unlock their full bonuses.
Which is kinda ironic because all those targets are commitments between the C-levels and the board/shareholders. So if the C-levels can’t meet their commitments, then they should be the first ones fired.