Nearly 25,000 tech workers were laid off in the first weeks of 2024. Why is that?::undefined

  • kandoh@reddthat.comEnglish
    69·
    10 months ago

    Aggressive targets weren’t hit so the c levels are harvesting skulls to unlock their full bonuses.

    • edric@lemm.eeEnglish
      23·
      10 months ago

      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.

  • nihilvain@lemmy.mlEnglish
    404·
    10 months ago

    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.

    • AA5B@lemmy.worldEnglish
      9·
      10 months ago

      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?

      • ricecake@sh.itjust.worksEnglish
        8·
        10 months ago

        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.

        • AA5B@lemmy.worldEnglish
          1·
          9 months ago

          Hopefully they’re wrong. Commercial real estate should have no direct impact on most tech

          • ricecake@sh.itjust.worksEnglish
            2·
            9 months ago

            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.

          • bitwaba@lemmy.worldEnglish
            2·
            9 months ago

            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.

    • AccmRazr@lemm.eeEnglish
      101·
      10 months ago

      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.

      • nihilvain@lemmy.mlEnglish
        2·
        9 months ago

        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.

    • trustnoone@lemmy.sdf.orgEnglish
      3·
      9 months ago

      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.

  • Evotech@lemmy.worldEnglish
    263·
    10 months ago

    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.

    • flamingo_pinyata@sopuli.xyzEnglish
      101·
      10 months ago

      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.

    • JasSmith@sh.itjust.worksEnglish
      9·
      10 months ago

      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.

      • Evotech@lemmy.worldEnglish
        2·
        9 months ago

        Yeah very large at more at will employment so you can just Hoover up anyone and then see if you needed then later…

  • AutoTL;DR@lemmings.worldBEnglish
    16·
    10 months ago

    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!

  • linearchaos@lemmy.worldEnglish
    14·
    10 months ago

    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.

  • SlopppyEngineer@lemmy.worldEnglish
    8·
    10 months ago

    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”?

  • Skyrmir@lemmy.worldEnglish
    714·
    10 months ago

    Because they all hired way too many people right after the pandemic and are just realizing they fucked up.

    • Copernican@lemmy.worldEnglish
      23·
      10 months ago

      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.

      • KevonLooney@lemm.eeEnglish
        12·
        10 months ago

        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.

        • JeffKerman1999@sopuli.xyzEnglish
          5·
          10 months ago

          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…