The layoffs will continue until (investor) morale improves

The case of Amazon amazes me. This is the company that famously refused to worry about what investors thought 20+ years ago and just kept on being unprofitable (and instead, investing heavily in growth) to the considerable benefit of investors who stuck with them.<p>Google is crazy too: they will spend more on stock buybacks than they will save through the layoffs, yet are investing nothing in fixing their actual, deep structural problems.

The sucky reality is that employees at big tech companies have little interest in running a sustainable and resilient business. We want constant team growth, never-ending promotions, ever-growing salaries. If another company is growing more aggressively and paying even less sustainable salaries, we tend to jump ship. It&#x27;s not necessarily wrong, but we really shouldn&#x27;t act surprised when that backfires every now and then.<p>Tech leadership bears blame for nourishing that &quot;there&#x27;s no tomorrow&quot; &#x2F; &quot;growth will continue forever&quot; culture, but it&#x27;s such an unhelpful take to portray this as some sort of a class struggle with shareholders. Especially since for a good number of big tech companies, shareholders don&#x27;t actually have much say and founders hold controlling interests.

I am curious at what point this violent recurring &quot;dawn&quot; to software engineers (in Silicon Valley specifically) is going to lead to the creation of a Guild.<p>Consider that remote work is more prevalent, the healthcare situation is not getting any better in the U.S. and in this space it has become more common for employees to have to move between companies regardless.<p>Then the certainty of having a comfortable job at Google or Meta evaporates violently. To the point, where mothers while giving birth learn they are fired. And then we have things like ...Twitter.<p>Say you were laid off by FAANG or a notable startup and the same or adjacent company reaches out to you a year from now to rehire you, as the &quot;bull market is here.&quot; What will you do? The instability is here to stay for a while. This can happen in 2025 again pretty easily.<p>What is that critical mass of engineers that would demand a startup gets guild approved to join? I can see that happening if one of FAANG becomes a guild company but they will fight tooth and nail to avoid that.<p>As an investor that is a nightmare, if a minority of startups are in this situation. On the other hand if that is the status quo to getting great people, I can accept that overhead.

There is no other way. If they want something done they need someone to do it. Layoffs make them less attractive. So they will have to either rise the wages or accept less qualified candidates. The difference in performance between average and top engineers can be time. Or even infinite, when one simply cannot do the thing.<p>And this is, BTW, applicable through the whole range. Just check Intel market capitalization, and guess what? It&#x27;s now smaller then AMD, and 6x times smaller then NVidia. The reason: top management, they failed on AI, graphics, they failed on Cloud. Yes, they did something, not enough.

Layoffs will continue until we are fully prepared for the artificial recession induced by worker wage gains fear.

Or until a competitor wins out on this opportunity.

&gt; <i>...and now it’s time to right size to better fit a changing market.</i><p>Come again? What is this supposed to mean?

&quot;We keep you alive to serve this ship. So row well, and live!&quot;

The narrative around this round of big tech layoffs seems wrong.<p>The article opens:<p>&gt; <i>Since the start of 2023, more than 150,000 people have been laid off at tech companies, large and small. That’s a staggering number of people who have been put out of work.</i><p>Who says those people have been put out of work? There are lots of startups that have wanted to hire engineers that couldn&#x27;t because the FAMAG paycheck money firehose made it nigh impossible.<p>These people are mostly not going to be out of work. Most of them will still be earning way more than almost anyone in the country.<p>This is a good thing for startups, as now the (frankly anticompetitive) big tech hiring practices are getting rolled back to sane levels.

Isn’t this mimetic desire at work?<p><a href="https:&#x2F;&#x2F;en.m.wikipedia.org&#x2F;wiki&#x2F;Mimetic_theory" rel="nofollow">https:&#x2F;&#x2F;en.m.wikipedia.org&#x2F;wiki&#x2F;Mimetic_theory</a>

a lot of founders also owe banks money tied to the value of their equity posiitons.<p>As stock price goes down, they are incentivized to either pledge more stock, have their collateral liquidated, or take actions to move the stock price back up.

They do it not to impress investors, but because they feel they are doomed.

Paywall-ed and extra not available in my country :(

paywall

let&#x27;s just simplify this so the next few years aren&#x27;t too hard to figure out<p>why are tech companies laying people off?<p>because they can

The layoffs will continue until the people raising interest rates are voted out.