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

  • aguyinheat@lemmynsfw.comEnglish
    74·
    11 months ago

    Shulman adds: “They’re getting away with it because everybody is doing it. And they’re getting away with it because now it’s the new normal,” he said. “Workers are more comfortable with it, stock investors are appreciating it, and so I think we’ll see it continue for some time.”

    ughh this makes my blood boil

    yeah workers are “OK” with it, yeah, no, they’re too fucking terrified they’re next to do anything about it

    hate this guy

      • aguyinheat@lemmynsfw.comEnglish
        12·
        11 months ago

        well i mean yeah. but unionizing would be the thing to do about it. it’s just hard because people are scared for their job and scared to be out of a job right now, so they don’t want to take the risk. even though it’s fairly obvious that it’s a bigger risk not to…

      • nivenkos@lemmy.worldEnglish
        41·
        11 months ago

        Unions can’t stop layoffs - at best they can just change the order in which employees are laid off (First-in Last-out / seniority), I guess the process might make the company reconsider, but there’s no direct intervention.

        I’m a member of a union and went through layoffs.

        I think it’d only change if unions had power on the board / guaranteed share ownership, etc. as is the case in Germany (board representation with workers’ councils) and was proposed but rejected in Sweden (share ownership).

  • nihilvain@lemmy.mlEnglish
    303·
    11 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.

    • AccmRazr@lemm.eeEnglish
      91·
      11 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·
        11 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.

    • AA5B@lemmy.worldEnglish
      7·
      11 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
        7·
        11 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·
          11 months ago

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

          • ricecake@sh.itjust.worksEnglish
            2·
            11 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·
            11 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.

  • Evotech@lemmy.worldEnglish
    212·
    11 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.

    • JasSmith@sh.itjust.worksEnglish
      7·
      11 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·
        11 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…

  • linearchaos@lemmy.worldEnglish
    12·
    11 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
    7·
    11 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
    712·
    11 months ago

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

    • Copernican@lemmy.worldEnglish
      19·
      11 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
        11·
        11 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.