There are some obvious things missing from here.<p>I believe the prevailing wisdom is that tech hiring slowed because interest rates rose.<p>Because software scales so well, it benefits from speculative effort more than other business types. We see this in venture capital, where they only need 1 out of 100 bets to hit in order to make their money. Large tech companies do something similar internally. They may fund the development of 100 products or features, knowing they only need one of them to hit big in order to fund the company going forward.<p>When money was essentially free to borrow, it made all the sense in the world to make a large number of bets because the odds were on your side that at least one of them would pay off. Now, however, each bet comes with a real opportunity cost, so companies are making fewer speculative bets and thus need fewer people.<p>---<p>The other thing he doesn't talk about is the rise of remote work and the downward pressure that it puts on wages. I know that many companies are forcing employees to return to the office, but I'd speculate that the number of remote workers has risen significantly. And that opens up the labor market pretty significantly.<p>I'll tell you that I'm getting overseas talent for roles where 10 years ago I would have hired entry level talent in the US. But since my company is fully remote and distributed, the downside to hiring in LatAm and Eastern Europe has been significantly reduced.
> At Automattic last year we did not do layoffs, but allowed performance management and natural attrition (voluntary regrettable was 2.9%, non-regrettable 6.8% for us in 2023) to allow our size to shrink down more naturally<p>"Non-regrettable" attrition means either that the person was fired or laid off. Since the post says Automattic didn't do layoffs, that means all of that attrition took the form of being fired because of performance problems.<p>If 7% of the company exited the company in a year because they were fired -- which seems quite high to me -- then even if you don't call it a layoff, it has many of the same characteristics as a layoff.<p>In a classic layoff situation, you've over-hired, expecting future growth, and then the winds change, and you need to reduce the workforce to match the declining growth.<p>In a case where you're firing 7% of the company because of performance problems, you haven't over-hired, but you have certainly poorly hired!<p>Either way, now the remaining workforce has to adjust and "do more with less," and I'm going to guess that most of them have a reasonable fear that they might be next on the chopping block!
In my experience, the USA is shitting on its entry-level engineers. I know 3 junior engineers unemployed 6 months after graduation, from top 20 to top 40 schools. They have 10 total internships among them.<p>One had a zoom, corp job with 24/7 hours they had no life and quit. One had their offer rescinded 4 weeks before start date. One had their position cancelled 60d after start date. All are now longterm unemployed with virtually no interviews.<p>Meanwhile overseas hiring and 85k H1B workers are flooding the job markets annually, its galling ...
> Sam Altman when he says there may someday be a billion-dollar
company run by one person who is able to highly leverage future AI
agents to automate most traditional roles at a company.<p>Altman is nearly right, but Warren Bennis had it better;<p>The factory of the future will have only two employees, a man and a
dog. The man will be there to feed the dog. The dog will be there to
keep the man from touching the equipment.<p>It's not that companies will "leverage AI" but that AI will leverage
humans. Companies are already "AIs", but that will become more and
more apparent as time goes by.
> Some of this productivity gains just come from adoption of existing tools like Google Workspace or Office 365, issue trackers and version control with tools like Gitlab, Github, or <i>Jira</i><p>I guess I haven't seen Jira be something that actually improves productivity. More often it seems to be a productivity suck.
I don't think productivity gains explain why companies need fewer people to be employed. A better explanation is that tech companies have grown too big. They've established big enough moats to prevent competition from arising, and if for some reason competition did arise, they can just be bought out.<p>So we have something like a monopoly/oligopoly situation where companies are in a rent seeking phase and don't need as many employees as before when they were in a value producing phase.
I’m a security engineer, so my work is a bit different than SWE - data wrangling and analysis, tying systems together and correlating events across them, building defense in depth, cool and effective under stress.<p>That said, LLMs are showing up a lot in my job. Being a good sec eng is having a 70% base in most systems, solid comp sci and programming chops (I call it I can build and run a mediocre app), and solid security expertise.<p>GPT is really good at radically speeding up how to get past the 70% starting point I usually operate from. I run (sanitized) terminal output through it so the 60% of the output I table to RTFM later to understand, I can understand immediately via GPT. Sec eng benefits a lot from leaning into pandas/notebooks vs log csvs, and GPT does that really well too.<p>The big marker for me is incident response - standardized tech data requiring analysis and correlating in a pinch. I’m going to have an incident response LLM partner soon enough. Analyzing open source codebases for how they do input sanitizing with a new to me language? LLM partner walking me through.<p>All this together - goodbye entry level cybersecurity jobs in a few years I think. Many of the things you’d need a security analyst for or the more busy work sec eng 1 jobs I truly think are turning into LLM jobs. My lived experience this past year reflects it.<p>I think layoffs, and productivity gains from LLMs are under the hood of tech layoff tight now. Curious if other engineering tracks are seeing this though? A SWE buddy at Google thinks so.
There are a lot of posts claiming that advances in technology over the past decade or two have been leading to "productivity gains". But the economic data simply doesn't support these claims. Productivity growth has stalled in most of the developed world.<p>I like the way tech companies operate. I like slack. We don't use P2 but it looks interesting. I just don't really believe it'll turbo charge productivity at my company, much less at a more traditional company.<p>I'm going to avoid saying anything one way or the other about AI because that would be a separate argument.
Did anyone perform an analysis on where the laid off employees for last 3 years went? According to layoffs.fyi nearly 500k were laid off since 2021, would be interesting to see if people mostly reshuffled within FAANG or there was a more structural talent migration e.g. from megacorps to startups.
Paying less for an engineer in a low cost of living area may save you money in the short term but will wound you in the long term if you value employee retention. If you have a truly skilled engineer paid cheaply, it’s trivial for a large company from a high cost of living area to offer them a 20% salary bump and snatch them away. Good luck if that employee had valuable insight into company processes.
> At tech companies some roles are highly leveraged… These leveraged roles can create enormous amounts of value, but the unlock in technology can come from a single person, a single insight.<p>This core idea about tech employees having high leverage is spot on. It not only results in the high compensation that tech enjoys at the moment, but also explains why attrition and layoffs are a part of the process. Companies with a lot to gain from technology are willing to throw money into hiring, but are simultaneously figuring out which roles are actually paying off and which ones aren’t.
Another obvious cause I don’t see anyone mentioning: tech simply created a lot less value in the last decade than in any previous decade. Pretty much every one of the big hyped up technologies that was going to be the future of everything turned out to be a bust: IoT, drones, cryptocurrencies, NFTs, and on and on. Even the ones that got some traction like ride sharing really were just castles of smoke floated on giant clouds of dumb middle eastern and Asian venture capital money looking for a greater fool. Most of the changes in web development tech have made software slower and more bureaucratic to make in order to support large FAANG-style software orgs.<p>There was absolutely nothing remotely on the scale of the smartphone, social media, the web, the personal computer, etc from previous decades in terms of actually creating real value for users.<p>Today’s tech industry deserves to shrink.
A few of those thoughts I completely agree on: results of overhiring, and technology enabling bigger impact by fewer people seem spot on to me.<p>But a few I find strange. For example, a semi-implicit assumption that hiring, profits and stock price are tightly coupled. That is not always the case. They are correlated, but often have significant time lags, so it is possible for a company to hire rapidly on a great novel idea, realize a first mover advantage, have it lead to profits, have that lead to a stock rise by which time there is no longer a need for aggressive hiring. The company does not even need to do layoffs, just a stop to aggressive hiring is enough to feel a frozen job market.<p>Edited: apparently I totally misunderstood the meaning of the "non-regrettable attrition". Is the only difference with a layoff is firing employees one-at-a-time vs en masse?
People talk about efficiency a lot, but they miss the basic point that efficiency in a free market means lower prices and decreased profits (due to competition). Companies profits are soaring. Folks upset about lay offs are not against that type of efficiency, they are against bad faith arguments that's it's cool for leaders to make money on short term gains (fire staff) while paying no costs for long term losses.
> There’s been a weird accounting thing where companies put a lot of their compensation into equity, but I think that’s going away as investors are learning to better account for dilution and employees appreciate the fungibility of cash.<p>Interesting, is there any public data to support this?
> Some of this (tech industry) productivity gains just come from adoption of existing tools like Google Workspace or Office 365, issue trackers and version control with tools like Gitlab, Github, or Jira.<p>Why would other industries need version control with tools like Gitlab, Github, or Jira. These tools exist to solve complexity problems that arise in software. They aren't making the tech industry more productive then others. If anything, it's a huge red flag if a company is a little too obsessed with Jira.
I’ve noticed salaries haven’t kept up with inflation from the last four years. Could that be playing a role?<p>Maybe companies realizing they can’t attract employees with their budgets so they don’t bother hiring?
Does this article actually say anything? It seems like a tech bro founder who laid off 7% of his staff rambling and everyone eats it up for some reason? Don't forget the a16z quote because we aren't done shilling crypto
That said, after working with small teams. I observed Its kind of hard to maintain all team member enthusiasm and drive without feeling like getting burnt out.
When there is a one person $1B company someday, which I think is very possible, I believe it will come after a series of events that will make it obvious that such a thing could exist. For example, the existence of several multi trillion dollar market cap companies, plethoras of small companies worth several billion dollars, and probably a radical rethinking of compensation and capitalism in the economy.
FYI, Automattic has lost more headcount in 2023 (proportionally and in absolute terms) than some companies that had public layoffs.<p>I know of several cases where individuals receiving stellar reviews were suddenly fired for “performance reasons”.<p>Call it what you want, Automattic has been doing stealth layoffs and it is disingenuous to pretend it has not been.