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Comment by adam_arthur | Hacker News Reader

This is likely to be the recession that halts the rapid inflation in tech wages.

Rising risk free rate has hit growth companies the hardest, and there are likely to be a large swath of layoffs right as we have tons of people bootcamping and switching into the industry.

Supply and demand of labor in tech will enter balance for the first time since ~2010. The FFR is looking to have a reasonable chance to go to 5% at this point, so the pain isn’t even close to being over

Get used to not being special like pretty much every other industry

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I actually see this as a good thing. The market got flooded with bootcamp dudes. I've nothing against people who are self-taught or changed careers (I am one). But many of the "developers" joining the market are really only interested in making a quick buck with as little effort as possible. (and adding a whole new range of buzzwords too).

The Tech industry is not going anywhere, though. We are still in a paradigm shift and companies are going to need software more than ever. Here are things that I'm now extensively using, that I was barely using 3 years ago: Food/Items delivery, eWallets, Apple Watch, Airbnb, Web3/Crypto, Discord, Streaming services, Dental, DNA Testing.

While many of these were used by people here for longer than 3 years, many people haven't shifted yet; and their shift is going to trigger the need for more software. There are still a lot of things that can definitively benefit from tech. One example I can think of is health care. Finding a doctor still require the old ways. You medical document is not necessarily transferred between countries or updated by your doctor. There are no apps to track the medecines your doctor gave you, etc...

Tech is still slowly making its way into our everyday life. The Web3/Crypto/Bubbles are really just distractions for this long-term trend.

Dental?

Invisalign.

Does invisalign use software? Wow. I'm curious, is it to model the adjustments that need to be done to the invisalign mouth thing? Or is it something way more futuristic?

Contrary view - this will sprout more startups that were previously starved for talent rest&vesting at faang&co and we'll see much tighter market in 2-3 years.

It will definitely do that if FAANG comp compresses via lower equity issuances. The difference is startups generally can’t compensate at the level that FAANGs do or did.

And if discount rate stays higher, valuations will be much lower at the same revenue and growth rates than they had been in the past.

Of course this also implies the value of the dollars you earn is greater via opportunity of higher yielding investments.

> It will definitely do that if FAANG comp compresses via lower equity issuances.

I think it will absolutely happen at least in short term. In fact in many cases already happened.

small crypto startups compete directly with faang because they can give their own liquid tokens alongside their base salary

given how big the VC funds for crypto startups are now I dont really see any talent acquisition situation improving for other tech startups, I see it getting more impossible

who wants below market salary and illiquid lottery tickets that you have to also put up your own money to redeem after 1 to 4 years of your life with a higher chance of getting zeroed after VCs get their cut first assuming the company doesnt fold? Given a choice

Nobody is going to work for Crypto startups now that the whole sector has imploded. And likely will go even lower from here. The days of profiting off ponzi scheme-esque tokens is over

most crypto assets can fall 99% from their initial trading price (like IPO price) before employees, founders and investors are at anything resembling a loss.

99.99% from all time highs

thats true for newly or to be launched crypto assets, and for existing established cryptos the fully diluted value (non circulating supply that company holds) is often many times the supply that “marketcap” sites show, and this is paid to employees and slowly increases the circulating supply

all while the cash compensation and bonus structure is now similar to FAANG

so I think you might be right that there are potential employees that don't understand that and can only relate to their or their friend’s attempts at day trading

A coin with a market cap of $1B that falls 99% is worth $10m. I'd love to see the startup with more than a few employees where that leaves anybody but the founders with anything.

And usually these lesser known tokens are thinly traded and the volume doesn't support actually cashing out large trades at market price

But yeah, if you trick enough ignorant retail investors to bid up your token, you can siphon their money to your employees. Certainly.

Death spirals happen. Its a risk that lockups expiring create ongoing dilution not met by increased demand. Thats not controversial or exclusive to crypto assets, the early liquidity is currently exclusive and competitive.

The liquidity pool technology fixes the liquidity issue and many company’s investors park additional capital in the liquidity pools. Sometimes even their unvested tokens sit in them or the generated liquidity pool shares is put in the vesting timelock smart contract, guaranteeing liquidity for others (which often increases confidence for holding, knowing that people can get out at any time)

they aint liquid until they vest and by the time they vest you'd be lucky to have a job so no - nobody in their right mind would go with small crypto startup now

There are also plenty of people unhappy with their FAANG jobs and don't want to trade it for a growth-chasing but ultimately unfulfilling startup. Those might be tempted to join a more robust startup.

Really? Why? I thought FAANG jobs were the closest thing to heaven on earth.

Okay, I am being obnoxious, but seriously, this is first I have heard of this. Do you know why? Surely it can't be the remote work thing. I would assume there has to more to this.

Have you ever worked for a large company? Some people thrive there, others would rather die.

I assume it's mostly about that.

It's the constraints that come from working in a large team/company - the bureaucracy, the politics, the kind of work (focusing more on scaling vs fun features). A lot more features can be tried out in a startup due to their smaller scale, but not if growth is the only thing they care about.

Those people already left or are on their way out soon, and there is a fresh crop every year

There are still many who are coasting along because there is no better alternative.

Personally, myself and several others I know don’t care to work on the problems that the big tech corpos are working on, no matter the salary. I make well below what I could because the things I work on are important contributions to society rather than helping an advertising business or help a closed garden become more closed.

Where do you work?

I’ve worked at several companies that have efforts in renewable energy and building energy management optimization. Reducing use and reducing peak demands mostly.

> Personally, myself and several others I know don’t care to work on the problems that the big tech corpos are working on, no matter the salary.

While there are indeed people like you out there (don't care about the money)

You have to remember that you're more of the exception than the rule. The average developer is indeed very keen on optimizing their salary, and the possibility of a 50-100% raise by moving to a FAANG is undeniably a huge motivator.

Sprouting startups funded by what? All indications as I read are VCs becoming note risk averse right now.

scrappy startups not "lets plow 100 mil with no market fit" startups.

We are barely in the early stages of automation and digitalisation. There may be a temporary bump but we are nowhere near where we should be in terms of automating things. Let alone the existing code that needs maintenance. Large and boring companies, the Chryslers of the software world, will undergo a slowdown. There will be new tech and process coming around. We still have trains driven by people, planes flown by pilots, factory floors maned by workers, tills handled by cashiers, cars that dont drive themselves, we dont yet have robots coming to our door, and so on. The current state is just the beginning.

This: "We are barely in the early stages of automation". I would disagree from the perspective of manufacturing. Most people do not realise how much automation has occurred in the last 30 years. The labour cost per unit of manufactured product continues to fall at an incredible rate. The future feels like a bunch of 99% automated factories in the middle of nowhere. It seems scary to imagine the day when someone can manufacture a car (end-to-end) with almost zero labour input. Imagine: Semi-autonomous robots at all points in the supply chain: Mining, refining, steel & aluminum production, deliveries (driving trucks), car manuf. plant.

But, yes, I do agree that this statement is generally true for services industries ("office work / retail").

The factory automation you're talking about is the culmination of the industrial automation that started in the 1800s, so it's no surprise that it's so far ahead.

Information automation, on the other hand, is still very much in its infancy. Not just office and retail—construction, farming, and medicine are huge growth areas for IT right now.

"I would disagree from the perspective of manufacturing" as long as we are not at a stage i like to call FaaS (Factory as a Service) we are no there yet. Full automation means self driving trucks unloaded by robots that place raw materials on manufacturing lines which after fully automated processed are packed and loaded into self driving trucks.

There's also a lot of automation to be done before a factory begins producing something. There are large capital costs, and even larger opportunity costs, to the really slow testing setups for all kinds of industrial goods.

For the area I'm most familiar with, batteries, a novel chemical composition for a battery can take 5-10 years, to hit market (leaning towards the latter end of the spectrum). IMO this could be brought down to 6-12 months with much lower capital costs.

Tech is pretty different in that its whole point is automation and reduction of redundancies. I would imagine over time there wouldn’t be a need for a mediocre engineers as their jobs would just be done by code written one time by a superior engineer.

We’ve seem this already happen to “mom and pop” web dev shops getting pushed out by the work of a handful of companies (Weebly, squarespace, Shopify).

Yup, a single dev can build out a massive business via severless cloud components in what used to take a large army of engineers.

It just so happens job growth has historically exceeded efficiency gains. The equilibrium point seems close from my perspective, especially if there’s a shock of recession to hammer tech employment

The real value add of software engineering hasn't been code for awhile, it's figuring out what code needs to be written and which architecture/services are the most efficient to implement it.

Yes, same as the value of a plumber, electrician or architect. Difference there is there isn't a supply/demand imbalance of labor in those jobs. And there soon won't be one in engineering either

Have you tried to call an electrician or plumber recently? Assuming you can even get one on the phone, they can basically name their price for any job.

Especially in Silicon Valley.

That’s a very hard prediction to make. The most expensive part of software is maintenance and it’s not decreasing over time.

Of course it's decreasing. The amount of people required to maintain an application of a given size continues to drop significantly over time.

Something like Docusign, once built out, could be maintained by a handful of people using serverless components. Same thing with Twitter and pretty much every other application.

Interestingly, as a side effect of this, the marginal gains on the most skilled engineers continues to increase.

For certain classes of work it is very difficult to hire even at the top of the market. There are positions my company would happily pay a million/yr to fill and simply cannot find anyone who meets the requirements.

Yes, so the median wage declines, and the wage of the most productive increases. You'll have 20% or fewer of engineers doing most of the work.

The amount of impact an individual can have has never been higher

What sort of positions out of curiosity?

It's hard to list all of the sorts because sometimes the needs are quite nebulous. Sometimes it's someone who's a great engineer who's just... really great at certain kinds of growth hacking, whatever that entails. These are more "you know it when you see" opportunities. Engineering leadership can be sort of similar. The kind of person who can "make things happen". More technical roles are often easier to describe. A few concrete examples:

Someone who got their PhD researching databases who is also a very experienced software engineer.

A senior software engineer who's worked for a few years in the finance world, and understands some of the more advanced math like stochastic calculus.

Someone with experience helping hypergrowth mode startups whose main DB is MySql to adopt Vitess.

Considering many F500 have old crusty mainframes deep in the bowels of their core operations… who wants to deal with that stuff. The stories I could tell from doing security consulting engagements and peering into these abysses. HN is a bubble about this stuff and loses perspective some of the time. The cool and sexy engineering might end up funneling into a harder to reach place, but meat and potatoes software maintenance and engineering that keeps big business going is not going anywhere. The things and languages we are inventing now will take decades to penetrate and replace the things deep in big business right now. Never mind the horror that is operations software like SAP.

> We’ve seem this already happen to “mom and pop” web dev shops getting pushed out by the work of a handful of companies (Weebly, squarespace, Shopify).

Yet automattic is a 7 billion dollar company and wordpress runs almost half the web. Point being that if anything weebly and such lowered the entry bar for small businesses. Of which some are lucky and move upwards, driving demand for devs. I like to call such companies and tools facilitators. The more, the easier for non tech people to enter the digital business world, and the more demand for developers.

I struggle with this - I tend to agree they will trend lower, but will still be high for the best engineers.

Most high paying jobs pay well because of leverage. Private equity/investment bankers make decisions to invest huge sums of money. The people who make those decisions get a small cut. Similarly, consultants make decisions that steer entire companies, in exchange for a small cut.

Software is unique vs many other jobs because it has a lot of leverage. An afternoon where I write a few lines of code can impact billions of people - this is why software engineers get paid a lot.

Where it breaks down is that only select few software engineers work at Google. There is a lot of software that does not impact a lot of people.

I could see either

a) A shift toward long hours, like finance, where software engineering is a commodity and the highest paid engineers are simply the ones who are willing to work the most

b) A shift of the median downward, but comp among the 95+ percentile of engineers staying the same with competition among the highest leveraged companies.

> This is likely to be the recession that halts the rapid inflation in tech wages.

I think the transition to remote combined with the recession will put a damper on high tech salaries. I've already started seeing pressure from our executives to explore more hiring of remote workers to cut costs further.

A FAANG-ish company I am familiar with budgets for salary, not roles. If you're a manager trying to build the best team possible and you think you can do 2x the work by hiring engineers from Nebraska who make 50% what they might in SF, you are stupid not to. For a time there was a rule managers on a particular team couldn't hire from SF or NY for this reason.

I'm a remote worker. My company explicitly tells me they like remote workers because we are cheaper than locals (they are based in NYC). My comp is about 20-30% lower than I expect I could get if I had relocated to NYC. It's still more than double anything I could get where I actually live (Salt Lake City).

I remain skeptical of the claim that an influx of inexperienced developers will significantly affect demand for people with significant amount of experience and proven success in the industry.

Obviously I'm biased, but still

I feel like this could be true in an environment where software adoption stagnates but I like to remain optimistic about the fact that there's still a lot of room for software to improve various industries. Lots of big and small problems yet to be solved.

lots of people bootcamping = lots of garbage engineers

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