I'd say they're holding off on investments and focusing on increasing their bottom line, ie: reducing costs.<p>Software engineers cost a lot of money. Their employment is largely driven by corporate loan interest rates. Some pay with equity as well, but let's ignore that for now.<p>This example is massively oversimplified but should help put the point across:<p>Say it's January 2022 and you pay $1M per year for some software engineers. You take out a loan of $1M to pay those engineers. That loan comes with an interest rate and a maturity date. Generally a corporate loan is 2% above the fedfunds rate. January 2022 had a fedfunds rate of 0.08%, so the corporate loan interest rate was 2.08%. To keep the example simple, let's say that the maturity date is in 1 year after the loan creation.<p>In 1 year, you will owe $1M plus the $20,800 interest on top. If you can use those engineers to increase your revenue by more than the $20,800 in a year, those engineers are a good investment.<p>You can take that extra revenue to pay the $20,800 interest. But what about the other $1M owed? Well, you can do something that's called rolling over a loan, which basically means you push out the maturity date, and renegotiate the interest rate on the loan.<p>It's January 2023, so the fedfunds rate is 4.33%. The corporate loan rate is +2%, which makes for a total of 6.33%. For the engineers to be worth it, they need to increase revenue by $63,300 from 2021 (or $42,500 from 2022), 3x as much as 2022.<p>Ah, but it's actually more than that! Because we still need to pay our engineers, we need to take out an additional $1M for their salaries this year. So our new loan is $2M, and the amount of additional revenue we need to generate is $126,600 from 2021 (or $105,800 from 2022), which is 6x our 2022 revenue goals.<p>Before I go any further, what levers do you think management have to help manage this situation?<p>---<p>EDIT: FEDFUNDS graph: <a href="https://fred.stlouisfed.org/series/FEDFUNDS" rel="nofollow">https://fred.stlouisfed.org/series/FEDFUNDS</a>