Layoff spree in Silicon Valley spells end of an era for Big Tech

Nothing further from truth.<p>Companies still desperately need developers to make their business goals reality. This is not changing anytime soon. There has been no advancement that makes developers less relevant.<p>What changed is how companies react to perceived bumps on the road and productivity. Companies learned that global recession can affect them and it pays to prepare. Companies also learned that fast hiring causes low productivity down the line. The easiest way to fix this is to fire a bunch of people at a time rather than individually and then blame it on perceived recession (even if it barely affects the company).<p>My experience is also that large proportion of hires can barely program at all and got into business because every other job they could get pales when compared to software development. There are multiple reasons why these people got successfully hired (broken hiring, enormous pressures, etc.) I can&#x27;t blame people for trying to do their best but from our point of view it has a huge effect on entire IT business.<p>Also companies started playing a kind of chicken game, it seems. Everybody waits for one company to lay some people off so that they can use it as an excuse to do the same.

If you look at Meta, even after these layoffs they&#x27;ve grown by 17% per year since 2019. It&#x27;s bad for the people affected, but if you look at the big picture it&#x27;s hard to call this a crash for now.

It&#x27;s a recession when your neighbor loses his job; it&#x27;s a depression when you lose yours. Harry S Truman<p>I went thru the previous crashes. It feels like the start, but not the eye of the storm. Companies are cutting jobs, not going going out of business. The casualty rate of startups in dotcom felt like 90%+. In 2008 major banks had to get bailed out. Today, companies are making cuts to get back to 2019 levels. There is still a long way to go before it&#x27;s a hard reset.

The last time there was a slowdown like this one in Silicon Valley, it lasted <i>three years</i>, from 2000 to 2003.<p>Back in 2000, many tech companies were buying products services from, and selling products services to, one another. When the flow of fresh capital from VCs and IPOs dried up in mid-2000, money-losing tech companies cut spending to conserve cash, reducing revenues at other tech companies, which in turn did the same, and this dynamic became self-reinforcing process affecting the entire tech ecosystem, first gradually and then &quot;suddenly.&quot; Tech companies that had been growing at double-digit annual rates in 1999 found themselves with sudden, &quot;unexpected,&quot; double-digit revenue declines a couple of years later. Many tech companies that couldn&#x27;t make cash last for three years failed during this unpleasant period, including many which had good products and capable teams.<p>If the current wave of layoffs and revenue slowdowns gradually becomes a self-reinforcing process affecting the entire tech ecosystem, it could take a long while for the layoffs and revenue declines to end. These things can take a life of their own, and individual companies can&#x27;t stop it, because they <i>must</i> cut spending to survive.

Here&#x27;s my hunch: a lot of top performers valued security during Covid and didn&#x27;t move for a couple years. Late last year mobility resumed, and company went into hiring frenzy because the market was filled with top performers looking around.<p>At the other side tech companies enjoyed lot of growth during Covid as the world digitalized, and are now, well not yet in a crunch, but flatlining toward where their natural growth would have been if Covid didn&#x27;t happen.<p>Pair lack of growth with over hiring and you get a readjustment.<p>I don&#x27;t see reason to call this a jobpocalypse yet.

I&#x27;m not so sure I would equate these layoffs as an end of an era. This is just exaggerated reporting by wapo.<p>In my opinion, these are corrections to the excessive hiring done in 2020. If you take each of the companies, the layoffs cane from bets which didn&#x27;t make money. I don&#x27;t think this marks as an end of an era.

You can&#x27;t look at total layoffs. If you really want what this means look at how many engineers were laid off. I know some were in Meta&#x27;s layoffs but how many? 100? 1000? 5000? Each of those numbers means something different.<p>It&#x27;s still incredibly expensive and hard to hire and retain engineers. If that remains true then this is really a blip. It won&#x27;t really be the &quot;end of an era&quot; unless there is a glut of engineers in the market. This happened in 2000. In the UK, the unemployment rate for engineers was huge (&gt;35% IIRC) and that excluded those who had left the industry.<p>Another interesting question is what will the collapse in share prices to do hiring and retention since equity is a massive (typically &gt;50%) part of total compensation. Those who got hired last year in particular have seen a huge amount of paper value disappear.

Question from someone who was not yet in the industry during the 2000 and 2008 crashes: during that time, were there companies which took advantage of this situation and picked up all of the available talent?<p>I&#x27;m surprised that Google and Amazon aren&#x27;t jumping in and poaching all of these talented engineers from Meta, Stripe and Twitter.

This piece is mostly wishful thinking. The Paper Belt would love to see the information technology industry falter, but its relative impact is only growing.

I actually think they&#x27;re wrong here. Yes, a couple thousand people lost their jobs, but I really think it&#x27;s just companies trimming some fat. Engineers are largely still employed, and except for maybe Meta billions of people are still using Big Tech&#x27;s products.

I’d rather say it’s end of “growth at all cost” era than big tech. Businesses will go back to the basics of optimization of unit economics, being efficient, steady growth and such. Which on the contrary means more emphasis on tech, not less.<p>Remember that much of the tech foundations for 2010s success were laid in mid to late 2000s. I saw it from within Amazon as AWS was building the core infrastructure components that went on to become independent services in 2010s. So I expect 2020s to go through similar phase. Maybe AI? Robotics? VR&#x2F;AR? I don’t know.

This is the typical hyper-reactionary behavior of many companies, not just SV. They are playing a game that is more about pleasing investors than actually building performant companies.<p>That&#x27;s why you&#x27;ll see insane hiring phases (and hear stories of so many new people with nothing to do and no onboarding systems yet in place), and a couple of years later you&#x27;ll see huge layoffs when there are big public economic fears.

I just hope the leetcode and other dubious interviewing techniques goes away with it as well

It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to Heaven, we were all going direct the other way--in short, the period was so far like the present period that some of its noisiest authorities insisted on its being received, for good or for evil, in the superlative degree of comparison only.<p>Tech might be changing, and it may be the end of <i>an</i> era, but it&#x27;s not the end of tech.

To me it seems like COVID remote work plus whatever this economic condition is called created a perfect environment for outsourcing. Not sure whether it will work out any better than before. But around me and anecdotally from others, there&#x27;s lots of hiring going on not just the traditional destinations that come to mind but everywhere from Spain to Egypt to South America to Eastern Europe. Even elsewhere in the States. While there are hiring freezes esp on the West coast. Especially with junior devs. Some teams have few or no junior devs locally. Only a few senior engineers overseeing outsourced coders.

I don&#x27;t think it&#x27;s the end of an era. IMHO, it&#x27;s only a correction of a super-estimate mistake done during the pandemics.<p>People tends to believe that the current situation will last forever, the bad and the good ones.

Big tech is fueled by the old tech of advertising money. In a recession companies slash their marketing budget.<p>How does Twitter, Google, Meta etc make money? With ads.

Agree with the other comments. There&#x27;s been recent layoffs, but over time it&#x27;s still mostly a hiring spree, not a layoff spree.

Good riddance. Big tech firms have been able to make as many questionable investments as they want for far too long

I see it once in a while comments out there on the internet(even here) flat out denying that companies have people employed that serve no purpose for the company. The reasoning goes like that economic incentive they would either never been hired in the first place or kept around when they are not useful anymore. Not realising that there is that most companies don&#x27;t do weeding out pf personel continously. When ever there is a economic downturn they look what employees they really need... this is what is happening now.

At least, valuation-wise, I agree. We&#x27;ve been on a ridiculous, risk-on market rally for a decade and a half, fuelled by incredibly cheap money and plenty of discretionary excess, and tech stocks have been the vehicle for speculative trading. My money is on energy and associated mining sectors outperforming in the next market cycle. I think we&#x27;re about to see the return of Peter Lynch style investing after the washout of excess from tech.

I was surprised by how much many of these companies, already huge, expanded further in 2020-21 when covid “changed everything” until it didn’t. (Hiring 10k more people in a year doesn’t make the news; laying them off does)<p>I wonder if part of the broad labor shortage of the last year or two was from so many people pivoting into remote roles for tech companies (not all engineering roles either). It was unsustainable. Now things are going back.

Doesn’t look like. In 2022 (and probably part of 2023) we’ll see tech companies fixing what they did wrong during the pandemic. That’s all.

How is two high profile layoffs a “spree”?

Bet money we&#x27;ll see a hiring spree in 2024.

How is this different from the .com crash?

This Article like much of the commentary around the current recession leaves the CEOs here mostly blameless in a world where half of all profit increases were done by companies, not by the growth of material cost or the loss of venture capital. They are not laying people off because they are struggling quite the opposite, they are laying them off because they promised 17% growth and they can achieve that by firing their engineers and assuming more with come.<p>It&#x27;s always sad to see the &quot;who could have forseen this&quot; argument passed around whenever things like this happen.<p>In fact if you treated companies like any financial advisor would tell you to treat something like a 401k or a savings account they would have considered what these companies have been doing for the last two years outright gambling with them and in turn also gambling employees futures.<p>With a lack of accountability for these reckless financial decisions though there is little chance that things will improve in the short or long term. This will continue to happen until legislation provides some kind of guardrail to simply firing at will anyone who disrupts a profit margin with their well paid talent and years of service.