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Comment by shakezula | Hacker News Reader

Yes, that’s… why I was upfront about that.

The companies range from startups to enterprise, at practically all stages of funding, but they each told me their funding never materialized or investors gave management ultimatums.

A few were in crypto, two are in fintech, a few more in various b2b tech companies. But they all gave almost identical explanations: management sees a rough economy ahead and tightened their belts accordingly.

I’m not trying to be doom and gloom, I still have a job, but even my partner, who is also a software engineer, just survived a round of lay-offs at their fintech that happened yesterday. They laid off 25% of their company across the board.

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That seemed to be the feel in 2008 as well. Lots of companies that were fine choose to have layoffs just because they “saw” a rough economy ahead. Self fulfilling prophecy, or just trimming the fat…?

In 2008, spending was in the toilet after the housing crash. That’s not the case now.

Do you think inflation and supply chain issues could have a similar effect as a decrease in spending?

Why would “supply chain issues “ reduce spending? If a company is having supply chain issues, that by definition means that there is more demand than they can supply. Meaning people are willing to spend money. What are companies going to do when they get supply if they lay off workers?

Besides, if you work for any tech company, you should be able to throw your resume in the aid and get another job. Even if you are a blue collar worker, there are plenty of companies looking. I have a friend who works in finance for a major manufacturer. He said the company had to be a lot more lax about firing factory workers because they already had a shortage.

Because they can't get the supplies to manufacture and therefore sell their own products reducing their revenues.

And by definition none of them had a profitable business model. The investors were hoping to pawn off their investments to an acquirer or the public markets - ie “the greater fool”. The investors knew they couldn’t find a bigger fool and are left holding the bag.

They were “tightening their belt” a profitable company doesn’t have to worry about that.

Did you read what I wrote at all? Why are you being so combative, lol. My partner’s company is not seeking funding and is profitable. Still had layoffs. Another friend’s company is profitable but did happen to be seeking investment. Still saw lay offs. Why do you insist on looking at this through the lens of funding and refuse to acknowledge that companies see a rough economy ahead, regardless of their funding status?

Even the profitable ones too are under pressure to show YoY and QoQ growth. To make that happen, belt tightening has to happen. So take away is no one is growing or expected to grow in the coming year.

The startup I worked for before my current company sold services to health care systems. It was hit hard by Covid. Hospitals were losing money and not paying for new products or even old ones.

My CTO said specifically “we need everyone we have and we aren’t going to be successful by laying off people. We have a vision and we need you all to help execute it”. They were bought out less than 9 months later for 10x revenue. I had moved on to $BigTech by then after leading their “cloud modernization” efforts.

The profitable tech companies are using it as an excuse to get rid of dead weight. No one is going to come after Cook, Jassy or Nadella for short term revenue misses.

Facebook and Google still have founders who own more than 50% of the voting shares. No one can come after them.

You can say a lot about the big 5. But none of them can be accused of short sightedness.

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