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Comment by eschneider | Hacker News Reader

I'm old and this is the third time around for these sorts of layoffs in tech. (Was around for dot-com bust of 2000-ish and financial meltdown post-2008.) One thing you want to keep in mind is that decent severance packages are usually only a thing for the FIRST round of layoffs. There will be more, and the payouts will be a LOT worse. Just, FYI.

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Correct, Take the first round of payouts, always.

Almost every 10+ years a mega company buys the company I'm working for and lays off everyone. The first time I stayed on and didnt take the layoff with my group, was going to merge into the new company. Then after a year, was let go and didnt get the big layoff package, then my manager left.

Totally screwed out of a major layoff package as it was a year later, way past the laws for mass layoffs, was a mistake to stay on, they kept me long enough they only had to let me go under new terms, then promptly closed the group (me and my manager). I was the most senior and long term employee, they saved a bucket load to screw me over.

Are employees able to “take” a layoff even if they don’t receive an email telling them they are among the affected group?

I was wondering about this as well, would be nice if someone could clarify!

It depends on the company and situation. Sometimes they ask for volunteers and you can request the package, most times you don't get a choice.

The writing is usually on the wall for a while before the layoff actually happens, so there's time for you to let your manager know that you wouldn't mind getting the boot.

Not usually in layoffs. In acquisitions or for old fashioned pension based companies sometimes there are voluntary “buyouts” which look like that.

If you're pretty close with your Director/VP, you can volunteer to be first on the list. Frame it as a sacrifice that you're willing to make to spare another member of your team.

Good advice, I have done this and it has worked.

It was petty, but I worked with a dude who got fired for doing that.

When he volunteered to get laid off (with the intention of getting a severance), the person he said that to fired him on the spot for "not being a team player."

Eventually, every last one of us were laid off. But it took six months and I used the time to find a new role and I also received a four month severance.

The "If you're pretty close with your Director/VP" part is probably important :)

Sometimes voluntary buyouts are offered before the layoffs. And they typically will make it seem like the buyout option will have better terms than the eventual severance package, to entice people to take it rather than risk getting fired down the road.

Yeah this is what I’ve seen at previous companies. Basically, they need enough headcount for it to not eventually proceed to full layoffs. It actually seems beneficial if you meet the tenure requirements, are still relatively young, and have a good network. I saw several people make out like bandits from those types of offerings.

Yep. I knew several people at a previous employer who got 1 year full pay packages and had a new job lined up within a week. One guy took an early retirement package, worth probably $250k at the time, left for two years and worked at a startup for a while, then came back and within 18 months took ANOTHER early retirement package.

In situations like this, it's usually too late.

Sometimes voluntary layoffs are announced, but really you need to be able to read between the lines and smell that something is coming before the layoff is announced. (The reason is that layoffs are usually kept confidential because no one wants to incite panic.)

What I did a few years ago was have a 1-1 with a VP and basically implied that I was ready to do something different. I ended up with a great severance package right as the pandemic was taking off.

I've never understood why people in middle management seem to be blindsided by layoffs. I've even listened to a manager tell the CEO this. Are they that oblivious they can't see the writing on the wall? Or is it all just a weird act?

You don't get to be middle management by NOT doing a weird act all the time

Let’s say you are an employee at a company that does mass layoffs. They do not lay you off like everyone else and keep you on. What is the best course of action to take at that point?

If you have any doubts about the company, you probably want to get serious about your job search.

To expand on why, what often happens after these is there now a round of "cost cutting" which on the surface may look like ok we just don't get as many, or any of the cool perks we used to- which will be true, and you will suddenly realize that work doesn't feel like it has a fun aspect to it anymore. But that's really nothing compared to the next step- when they start squeezing you- and everyone for more hours.

And more hours may not be a direct request- anyone at the periphery of the dev process- in the past this was QA, now gets cut because devs can do it, SWE roles might have to start doing more ops work, etc...

When I last left the financial industry, it was so bad, that VPs- and that was back when it least had some meaning- at least it did when I first got the title around 2010, started having to do mundane weekend work like checking out the system after network/firewall changes, etc.

It can be death by a thousand cuts. Now the financial crisis was way worse because essentially everyone was hurting, and losing money- and interestingly I "got out" of that bad situation by going to tech. But that's just how these bad situations play out and deteriorate.

That said, companies are still profitable. There was a LOT of overhiring in the past few years. I don't expect things to get so bad, at all.

I’d start looking for a new job.

As a recruiter told me, "I can add your resume to the pile." There are too many resumes in circulation right now.

I wonder if this mean a dearth of positions (i.e. a tech downturn is fully underway) or simply loads of applicants and enough open positions, but the recruiters are a bit inundated by the sudden influx and it'll take time to sort things out.

Either way I hope those laid off land on their feet.

Looking for a new job.

The advice to "take the first layoff" is weird, you rarely have a choice, if ever.

The advice isn't so much "take the first layoff", it's "next time will be worse."

If you say that you aren’t plussed, then they will probably lay you off to.

True but there are exceptions. At a previous job of mine, layoffs were happening and my manager was tasked with laying off one member of my team. He sat us in a room and told us about it and the severance package and basically asked for a volunteer. A more senior engineer volunteered and went on his way with a good chunk of cash.

Oh how I wish I had volunteered cuz a year later basically everyone including me had quit anyway.

The last job I had they offered very generous buy out packages to a few thousand employees to lower the head count. We got to decide if we took it or not. id you accepted they would then figure out your exit date which could be anywhere from 2 weeks to 12 months out depending on company needs.

I don't know if it's an industry specific thing but my parents worked for big defense contractors and they would often talk about layoffs in conjunction with offers that people could take to leave voluntarily. Always signed crazy to me. My mom took one in 99, worked private industry for a couple years then came back to defense after the dot com crash for way more money.

It depends on where you work. But I've definitely been at a place where the first email was "we've decided to reduce staff in key functions, please read the attached offering and submit directly to your manager". This was a reasonably generous package, in one case health benefits would be maintained for nearly a year even if you had only worked there 3 years.

The next round was a security guy waiting in your office with a box and a packet of information about how to apply for unemployment.

Ask if there are VRIF (voluntary reduction in force) options open to you. Most of the time there are unless you have some kind of "special" status.

I've never known a company that is in the process of layoffs not jumping at the chance to VRIF an employee because it is a far cleaner termination and honestly less stressful and upsetting for all involved IMHO.

But isn't there an incentive not to do it given the payout they'd have to pay for someone so senior?

Keeping them around is expensive too.

But if the senior person is in a role that the company ultimately wants staffed, they're going to need to hire someone else to replace them, who will be new and less effective? (Though OTOH, given the current macro, maybe they can get away with paying the replacement less?)

In my personal experience some random senior employee isn't even pennies on the dollar when it comes to the total amount factored into the layoffs that are in the hundreds of millions.

The bigger factor is are you in a position that requires the company longer to replace you? If so you may just be in that shit position of being kept on another 6 months until the next round of layoffs and get a package half as good.

As the first poster said always get out first if you can as the packages never get better the worse a company does.

Never fool yourself into thinking you're too amazing to be let go and that is why you 'survived' this round of layoffs. The worst case is as I said, you are too good to be let go of yet.

I'd be nervous about asking this unless I'm 100% committed to leaving the company, even if they say "no". Otherwise, you ask, they say "no", but now you've signaled that you're not especially invested in staying at the company, which feels like a negative thing to signal if you're interested in staying.

(edit: The idea being that you might get fired "normally" as a result, and not get generous severance.)

You don't need to ask your manager, why not go to HR and stress that this is a sensitive topic you don't want making back to your team? No guarantee they'll honor your privacy, but I'd say it's worth a shot.

HR. Is. Not. Your. Friend.

This is sage advice here. Never fall into the trap that HR is your advocate, despite what they tell you.

This 100%.

HR is there to protect the company. Sometimes that aligns with protecting the employee but when shit hits the fan ask yourself does HR work for you or for the company?

I know I sound a bit 'down' saying that but it is an unfortunate reality that companies are not very loyal to their employees when times get tough.

In my experience, HR may act kind, but they are 100% aligned with the company and not you. Giving them a signal that you're open to leaving at a time when they're trying to reduce the cost of resources that are human is a terrible idea if you aren't looking to leave.

Find a trusted friend in the company who is a survivor and ask them. Survivors have strong information networks for office politics and know such info.

That would almost certainly make it back to the person’s direct manager or 2nd-level manager (director, VP, whatever.)

I've never had HR share that kind of information back to me. And I would consider it highly unethical if they tried.

You do that and there will be an email describing the conversation in your boss' inbox before you get back to your desk.

Don’t volunteer to quit if you’re not willing to lose your job is sound advice, even if it’s a bit on the obvious side.

Even in an economic downturn an engineer with Meta on their résumé is going to be well positioned to find employment inside of the three months or more pay and six month insurance runway this deal provides.

So don't ask if you want to stay.

Having said that, if you're going to be worried about possibly/probably losing your job 6 months down the road what does it really matter if you have signalled you're not very invested in staying? The company has signalled they're not very invested either is how I look at it.

>(edit: The idea being that you might get fired "normally" as a result, and not get generous severance.)

Of course I am saying this as someone in Europe where firing someone "normally" is a lot more complicated and time consuming and comes with a whole list of other issues a company needs to make sure they manage properly. They can't just turn round and fire you with no pay because you "showed you were not very invested in the company as you asked if you could be let go when we were letting go of several thousand people". That is a 100% guaranteed legal hell hole no company likes to be in by choice.

In America perhaps that is something you genuinely need to worry about I don't know.

You're definitely not going to get fired for that on its own. Maybe I'm over-estimating how much this ends up mattering. But I think it can matter in other small ways too that can negatively effect your career growth.

Once the redundancies have started, the clock is running: you no longer have career growth at that company. You need to start planning your next career move elsewhere.

I don't think this is categorically true... you think _all_ the companies that have recently announced layoffs are basically sinking ships?

But it does mean your options for promotion and salary increase are clearly limited. And in tech there's strong evidence that more career development happens when you move companies than within a company.

You may find there's nowhere better to go, but switching to "looking externally" rather than "looking internally" for new jobs is definitely a good idea.

> You may find there's nowhere better to go

Yeah that's kinda the rub right now though. Everyone's frozen, tons are laying off. If the only information you have is "my company did a layoff", it's not clear you're better off looking externally vs. internally vs. staying on your current team.

One bad case is you leave your company that just did a layoff for one that has yet to do one (but will need to soon).

I understand your concerns and certainly don't mean to minimise them, this is just my personal experience and opinion after all :)

Do what you feel comfortable with at the end of the day. My original reply was meant as one possible answer that I have seen first hand to work well for both parties.

I will add as another personal opinion though that I very rarely see people that choose to stay at a company going though layoffs hanging around very long.

More often than not those people experience a 'depression' (for want of a better word that escapes me as I write this) seeing their friends leave, not having the freedom the had back in the "good old days", little if any progression, the constant "sorry not this quarter, we're still recovering from the layoffs", living in constant anxiety that they will be in the next round of layoffs, etc. So they often leave within a year or two anyway.

Over the years I have played this game and now I am a bit more proactive about exiting before that 'depression' hits me. Of course what is right for me is not right for all, only you can truly decide what you feel is best given your situation.

This nervousness is what companies rely on to keep the ship steady during massive lay-offs.

In other words that same company that in its heyday relied on the person pulling an all-nighter 'for the good of the company' yet failed to ever offer a reciprocal 'sure, take all the paid time off you need buddy' in return gets what it earned.

Although you may hear the 'rats from a sinking ship' and 'you're deserting the company and leaving your colleagues to pick up the slack' shrieked from on down high by management - Fuck 'em. They didn't actually give a shit about you on the way up and they don't give a shit about you on the way down.

Jump fast, jump early, beat the pack

I don't at all mean that I feel guilty about abandoning the company or anything like that, I'm saying this 100% from a place of selfishness. Wherever I am, I want my manager to think I'm engaged, I want to seem like a team-player. I worry that otherwise, I won't do as well at perf, I won't get put on interesting/meaningful work, I'll be relegated to the side and not feel as integrated into the team.

It's possible some of these are unfounded/exaggerated fears, though?

If you're 100% set on leaving with or without severance, for sure ask. But if you think you might prefer to stay if severance isn't an option, asking feels risky.

I think what you are describing is both a reasonable worry and also exactly the kind of ambiguity the company encourages. You have no leverage if you're unwilling to leave, and it's foolish to initiate a discussion like that from a position of dependency.

I'm not suggesting issuing ultimatums, of course, I'm just suggesting that you mentally prepare for needing to quit first, otherwise it takes a real pro to have that conversation. I know I'm not good enough to do it unless I talk about things like that with my manager regularly already.

I do wonder if these are questions you can ask confidentially in a different way. Like I dunno how big your place is but you might find this information easily in a meeting with HR, but HR is there to help the company (not you) so it depends on their priorities a lot. It's a very reasonable thing to wonder about when tens of thousands of people just got laid off from similar positions... I'd think a reasonable manager or HR person would understand that. But I certainly can't argue that managers and HR people are all reasonable!

In general you're probably right. Though once upon a time I tried to volunteer about three different times and never managed to get a package. At one point my manager literally said "Shut up, you're not getting laid off so quit asking!"

When this happens I'm always expected to take on more work without a commensurate raise. That's why I always leave.

Prep hard. My 2c below, not trying to tell you how to live life :)

1. Review your finances. How long can you skip work without feeling financially stressed? This should include full expenses (medical insurance, family, etc.) and will determine the level of risk you can comfortably take with your job.

If you have 5+ years of cushion you can take a lot of risk. Even if the job market and your company both collapse you can downshift for a year or two and work on a new tech as a personal project. Droughts seldom last more than a couple of years. If you have less than 3 months of cushion, look for the lowest risk options (a strongest company you can work for) and try to build it up.

2. Decide whether you expect your current company to do well with the reduced headcount. If your company is publicly traded, read financial statements and analyst opinions try joining an investor call. Look at the outside information, not the HR infomercials.

If the company is expected to do well you can stay. Layoffs in strong companies often mean shakeouts beyond actual layoffs (teams merging and forming, etc.) and you might even be able to move to a better spot. If the company is in trouble, start looking for other options ASAP.

3. Learn what is the job market for your skills and if any adjacent areas have significantly better prospects (if so, buff up your skills). This can change quickly. Talk to your tech friends, especially those in hiring manager spots, to figure out if they are hiring/frozen/RIFfing.

> If you have 5+ years of cushion you can take a lot of risk.

In my own experience I think this is a dangerous attitude: anny other HNers out there that thought this and failed, maybe add a comment about your own experience?

I thought I had cushion. However that attitude led to me reseting my equity to zero when I was about 30, and it took more than a decade of my life before I felt like I was starting to recover.

Perhaps sometimes we had some luck, so we get some savings, and we then think “that was easy, I could do that again” and try something risky. But the environment or our circumstances have changed, and we can’t always replicate our past.

The other aspect is that I think we underestimate risk: for example when I was younger I would think creating a business worth a million dollars would be unbelievably great. Now I see that opportunity costs of a $X00,000 loss of income require a 10x return ($X million) to break even (to only just cover your risks). Also you need wayyyy more return than 10x to cover the fact that your time investment is not diversified: a 10x return on a game you can only play a few times is a massive gamble that you end up with nothing. You don’t want to end up with nothing after say 40, because the world starts to randomly switch into extremely-hard-mode sometime after ~40 (and everybody is unaware they were playing on easy-mode until after the switch changes).

I wonder if we are talking about different risks. If I may ask, in your case did you go through your savings over several years by using it for regular living expenses or by pursuing a business/investment idea?

I have seen people go from a good sized bank account to zero quickly by buying something expensive (a house, a boat, etc.) or by trying to start a business. One can always lose money on risky investments or outright gambling.

But I have never seen someone deplete a 5-year savings by downshifting for a period of time. I was talking about the second case: I do not have to worry about losing a job if I have 5+ years of living expenses. If I lose my job and have to cool heels for a year, so be it; there are still have 4+ years of cushion. My 2c.

Sure. Travelling lots led to low equity, then I got involved with a business that went nowhere which led to “having nothing”, followed by cofounding another business (zero money investment but plenty of time investment). My income went to nearly zero and my spending went very low for a couple of years: for example I was living in an abandoned building with some dodgy people. I still had backstops (I could get a job, parents could have supported me, and I live in New Zealand which provides social welfare). The second business I helped found is mildly successful (I think it will pay me back for its risk plus a little, but it cost over a decade of my life plus some other even heavier costs).

My opinion is tempered by watching so many others flame out when trying to start businesses. Early flame out is often way better financially than many years of not quite succeeding (a friend just sold a business for peanuts after nearly a decade: costs and benefits but didn’t get the success they wanted).

Part of my comment is related to something I just read: a summary of Warren Buffett’s investing as:

RULE #1: don’t lose money.

RULE #2: don’t forget rule #1.

I”m not suggesting we shouldn’t chase rainbows - dreams are awesome even though they are usually social constructs driven by status. I guess my comment could be summarised as: don’t advise people to take risks. Either they are risk averse, in which case if they flame out due to your advice, that is bad. Or they are risk takers, in which case they need the opposite advice - try to be more sensible and less gambling.

The median return from people investing time into a business is probably nearer to zero than I would like to think. The average return is insanely skewed by the 1 in 1000 outliers. https://80000hours.org/2014/05/how-much-do-y-combinator-foun...

I mean, the world needs founders, but I strongly believe it is not a financially sensible risk for the vast majority of people that become founders. I am assuming your comment was aimed at potential founders.

Edit: I just noticed this relevant note in https://www.sequoiacap.com/article/sam-bankman-fried-spotlig... about Sam Bankman-Fried:

  Here, SBF realized, was the rub: When he applied this principle to his own life, he came up short. There was little chance he’d get himself fired from Jane Street. Thus the decision to stick with Jane was a risk-averse preference. It was the logical equivalent of being offered a choice between $50 and 50 percent of $100, and saying, “Give me President Grant.” SBF was risk-neutral on behalf of Jane Street, but not, he realized, for his own life. To be fully rational about maximizing his income on behalf of the poor, he should apply his trading principles across the board. He had to find a risk-neutral career path—which, if we strip away the trader-jargon, actually means he felt he needed to take on a lot more risk in the hopes of becoming part of the global elite. The math couldn’t be clearer. Very high risk multiplied by dynastic wealth trumps low risk multiplied by mere rich-guy wealth. To do the most good for the world, SBF needed to find a path on which he’d be a coin toss away from going totally bust.

Also makes me think of https://en.wikipedia.org/wiki/St._Petersburg_paradox

I dont know the law here, but it seems you can ask to review your contract, and insist that they include a minimum employment term or guarantee a severance package. They have two ways to say no. They can fire you then, in which case you get the severance, or you're free to look for another job in the period before they're no longer legally obligated to give you severance.

It seems that you should take as much advantage as possible of your legal status.

Well, if you're in a 'critical' position and you want to take a more 'wait and see' approach, retention bonuses are usually a thing for folks they don't want to lose in a first-round layoff. You approach that conversation like so, "I really love it here, but with the layoffs and uncertainty..."

Ask for a retention bonus.

I'm not saying there won't be more layoffs, but I don't think this advice makes sense for people at places like Meta. They are generating a ton of revenue and profit even with the current economic conditions.

Not to be contentious but some people may ask, "How much of that revenue is real?" and, "How much of it is inelastic?"

In the case of Meta, Mark Zuckerberg has set the controls for the heart of the Sun. It has no future because Zuck will lose everything in the quest for a product nobody wants.

There's actually a bunch of us who do want it. I work in VR 5 hours a day. It's the dream for me.

There is VR and there is the Meta version of it. One can succeed despite the other, in fact, the Meta version of VR endangers the success of VR in general. Specifically, Zuck is working overtime and spending his shareholders money to convince people that VR is somewhere between Axie Infinity and watching paint dry.

Most of the VR advocates I know are no fan of Meta:

https://www.youtube.com/c/ThrillSeekerVR

What is missing from Zuck's vision is any of the understanding that can be had from or had about fiction. If he was willing to listen he should take a sabbatical and go watch Ready Player One and all of the Sword Art Online anime and then he should buy a Switch or a PS5 and get a serious gaming habit. At some point he might get some insight about virtual worlds that aren't just a pale shadow of the real world but rather a place you might really want to work or play in.

You're just not the target of the product.

Have you heard anybody say anything positive about Horizon Worlds?

If you believe that Superbowl commercial for Horizon Worlds is representative of what they think the market is it for people who feel like they are over the hill, the best is behind them, and they can recapture what it was like to live back in the day? (Is that you Zuck?)

I am very interested in getting a VR headset to help with some 3D GFX development I do, I like the Oculus hardware but I nuked my Facebook account a long time ago so it's not for me. I game plenty too but I try only to play games that are fun. (I am a little vulnerable to grindy RPGs, my son will smack me if he catches me…)

> Zuck will lose everything in the quest for a product nobody wants.

Quest, no pun intended?

I survived two rounds of layoffs in 2008/2009 and they went as you describe. The first round had significantly better benefits. Which, ironically, ended up going to the worst performers.

That said, the company where I experienced the layoffs was losing money and the first layoff was 2-3% of the workforce. Meta is still quite profitable and they are axing well over 10% of their employees. I would think another big round of layoffs is unlikely unless Meta has a bunch of debt coming due or the macro conditions REALLY go in the crapper (and there sure are a lot of doomsayers out there).

I have been through a couple of merges and layoffs, it taught me that what matters is loyaty to the team, employer not so much.

Do you mind to elaborate a bit?

If your team lead can protect you they will but the employer at large is rather indifferent. Also further in your career those relationships to your team mean a fair bit while who you worked for as a company might not make that much difference.

I’ve gone back to work for a manger who laid me off. There were literally no hard feelings.

When he laid me off it was clear that he had to hit a hard headcount number, and I knew the project I was working on was “discretionary”. The HR meeting was “this is a headcount reduction and not a reflection on your work. Have a lawyer look over your severance and please accept or decline it within a week.” Really quite professional.

Others have pretty much covered the matter, you will always bump into former team mates, or it will be thanks to them that you will get some gig.

Employers themselves usually look into spreadsheets with a bunch of KPIs deciding who to lay off, without any regards for the effort you have actually placed into the job.

If you have decent skills and reputation, the manager or team lead may bring you over to the new company (if such opportunity is there).

But the company itself couldn't care less about anyone working there.

It depends. In a lot of layoffs your manager themselves will find out the same morning and will have no say in the decision.

Direct line managers are still part of the team.

This is going to be a repeat of 2000, not 2008. There's seemingly no contagion and no secular stagnation. This is just unwinding of the cheap money era that flowed overwhelmingly into SV. You'll see a cooling off of red hot compensation, a lot of failed startups that no one ever understood and the ongoing crypto crash. This may end up being enough to trigger a mild recession.

" mild recession"

If we're lucky

We're like 2.5 years into one at this point and some people still don't acknowledge it. A lot of people just keep saying "we're heading into one." It's likely this one will pass long before people come to a general consensus on whether or not one really happened.

If this is a recession, its not one I am feeling. 2008, the .com bust, those were recessions that everyone felt acutely. Unemployment is still at record lows. If the GDP dial isn't where people would like it to be then fine, but overall jobs are plentiful and no one I know is scared like they have been during the previous recessions.

The U.S. unemployment rate was 3.7% in October, and GDP was up 2.6% annualized in 2022Q3. Why do you say we're in a recession?

We didn't have inflation like this in 2000. I'm old enough to remember the 70s

There was a lot of commodity-inflation in the early 2000s, the second biggest rise in commodity prices after the 1970s[1]. Unlike the 70s (supply shock), this was primarily a demand-pull out of China/Asia, so the net impact to the economy was much more positive.

[1] https://www.investing.com/indices/bloomberg-commodity

The 5 year breakeven inflation rate today is 2.61% Since Treasury Inflation Protected Securities didn't exist in the 70s we can't compare, but the market thinks inflation is not going to continue like it did in the 70s.

Global macro is very different. This is going to be different from both.

Mild recession? How are you not understanding the global macro set up right now? Europe will see a ~10 year recession, possibly the worst ever. America may fare better but there's no way you're getting away with a "mild" recession.

We're definitely bracing for impact around here. Where do you get 10 years from though?

Source: he made it up

Predicting the future is hard, but the labour market is still extremely tight, boomers are leaving the workforce due to retirement, and there will probably be (attempts at) on-shoring as the west tries to decouple from China.

Europe will probably get its energy sorted in the medium term with LNG, and they're going to need to build a lot of damn nukes, but I don't think it'll be 10 years.

How do you not understand that you have a contrarian take on the economy?

Software engineering is far more saturated than it was in 2000 and 2008. In 2008, Amazon, Apple, and Google all had a seemingly endless room to grow. The iPhone, Android, AWS, and video steaming were still in their infancy. There's nothing like that right now. There are definitely a lot of exciting innovations in ML and VR, but I think it will be a while before these technologies find a mainstream consumer use case.

In 2000 some people still worked with paper rolodex. We need to keep things in perspective. The world changed massively in the last 20 years, everything is software and software is almost everything. There are a lot of contributing factors to this economy which are unrelated to the actual demand and value of software. There will not be an oversaturation of software engineering for a while to come.

If memory serves, Meta is cutting a lot of non tech jobs. Engineers might lose their jobs if entire projects are scrapped, but maybe a different position will be offered to them.

I hope that everyone is looking at Twitter and learning what not do: no company wants to beg some engineers to come back after being too quick to pull the trigger.

Outside of big tech, every single company has been struggling to hire. Companies hate to admit it, but every company is a software company now.

"Software engineering is far more saturated"

What country are you referring to? I'm in the US-- the market here seems quite strong according to the BLS:

US Bureau of Labor Statistics-- Here are two examples, followed by the general IT occupation growth description:

- Software Developers, Quality Assurance Analysts, and Testers

--> Job Outlook, 2021-31 25% (Much faster than average)

https://www.bls.gov/ooh/computer-and-information-technology/...

- Information Security Analysts

--> Job Outlook, 2021-31 35% (Much faster than average)

https://www.bls.gov/ooh/computer-and-information-technology/...

"Overall employment in computer and information technology occupations is

--> projected to grow 15 percent from 2021 to 2031, much faster than the average for all occupations"

https://www.bls.gov/ooh/computer-and-information-technology/...

Even Mark Zuckerberg admitted to making the wrong projections of tech growth per the article. What makes you think these statistics are doing better?

I was around in 2000. It had the failed startups but it didn't have inflation, war, and a pandemic.

Long Covid alone is going to hamper any economic recovery. It's a mass disabling event. The sooner we recognize this and start tackling it, the better : https://www.wsj.com/articles/covid-workforce-absenteeism-pro...

CMBSs held by shadow banks with quarterly markdown accounting — with valuations linked to commercial leases.

You'd almost think cities and metropolitan areas are being thoughtful when avoiding the demands from those following the latest gold rush. But surely, that would be an unpopular opinion around here.

It really depends on the Fed and the overall market. I would say the economy is at a much greater risk now than in 2000, for these reasons:

We have several fundamental inflation factors - The population is aging. A huge number of boomers are exiting the workforce every year. - Unlike in Japan, this cohort of people are likely to keep spending into their retirement, including a huge spending on healthcare. - This time, we don't have China to absorb the inflation. China is in the same situation. Also, most jobs that could be easily exported already have been. With the tech sector being a bit of an exception. - The prices for all sorts of jobs being done by people in their 60's will go up. This goes for everything from hairdressers and plumbers to accountants and lawyers. This will cause pressure on the salaries for these jobs, raising costs. - Decades of low interest rates have created a massive amount of cash (and cash-equivalent "value") in the system. As investments go down, more will find its way to consumption, driving prices up. - During the Covid lockdowns, many countries discovered that plenty of goods were becoming scarce or unavailable. Local production facilities are being built for anything from face masks and respirators to integrated circuits both in the US and Europe. Trade barriers and subsidies are used to support this. Local production will be more expensive than 1-2 huge plants able to serve the globe. - Covid also led to a mentality change, where employee loyalty to employers took a big hit. Employees (especially blue collared ones that can't WFH) that got laid off during Covid will be more likely to switch jobs more often, driving salaries and costs up.

On top of this, the war in Ukraine adds these factors: - Food, energy and fuel, as well as many minerals are scarce, driving up the prices of everything. - Such items are added to the list of goods western countries want to produce for themselves. And in the case of food, places that experience famine may switch back to food production over cash crops over a longer term, as well. - Western countries have started rebuilding their arms industries, sucking capital and labor from other sectors.

All-in-all, these factors lay the foundations for an inflationary pressure that could exceed the 1970's.

As central banks attempt to counter this by continuing to raise rates, we get the following problems. - Anyone with a variable or expiring interest rate will have their standard of living going down from interest payments AND inflation. - Huge swaths of people will demand that raises keep up with inflation. Groups with skills that see increased demand will get such raises, and possibly more. - In other sectors, employers will not have the income to raise compensation at the same rate. Employees in these sectors will become increasingly unhappy. - People will start unionizing at a greater rate than before. Especially in Europe, but also in the US. - Most likely, we will see large numbers of massive labor market conflicts, with strikes followed by lock-outs. - Tensions between countries is also likely to rise (though the war in Ukraine may mitigate that a bit, for as long as it lasts) - These conflicts will damage the supply side of the economy further, leading to even more inflation and a deeper stagflation, in a vicious circle.

In all of this, this is bad for any business without a significant positive cash flow, including much of internet "tech". Military "tech", on the other hand, may see a huge boom, and the same may come for anyone able to contribute within manufacturing or construction (such as through robotics/AI).

Thanks for this, Debbie Downer. This was all I needed to brighten my day.

People act like there were no layoffs between 2010 and 2000 but there were plenty, if you were in the wrong company and/or the wrong sector. IBM comes to mind. There were still CEOs out there trimming the fat while everyone else was getting high on the hype. If you had exposure to this, you're ready, at least emotionally, for what's going on now. If you didn't, you're probably shellshocked right now. Don't worry, you'll get used to it.

I'm interested to hear your opinion: Do you have any thoughts on the current way companies are valued/how they operate vs how they were leading up to the 2000 crash?

Personally, I see it as a cycle which appears to be repeating itself, especially after re-reading The Intelligent Investors assessment in the years after the 2000 crash, and comparing it to some of the current offerings out there. I would be interested to hear your perspective on the matter.

This is literally nothing like 2000 unless in you're in something like crypto. Meta hired 30k+ people during covid and they are correcting that over hire mistake. They are fine financially.

In 2000 entire companies were just disappearing. Companies had gone public that had no business plan. 100s of millions were thrown at companies who were gone in 12-18 months.

Big tech, who are making dump trucks of money, laying some people off is just part of the normal business cycle.

Yeah, SV is never completely sane, but the Dot Com era was truly mental bonkers.

Thanks for the response. :)

Under what circumstance do you believe the current landscape would be comparable to the 2000's era? Certainly, I would hope that the same kind of foolish behavior wouldn't reoccur, outside of a very specific set of circumstances, but do you see any sort of comparison between the historical foolishness of the market, and the wastes of money that have been devoted to things like, Stadia, Zillow AI pricing, Quibi, WeWork, etc.?

When I see the amount of money spent vs brought in by the various big names out there (social networks, in particular) I can't help but see a thing essentially worth little outside of name recognition. I naturally assume it to be a house of cards ready to collapse at some point, I just can't really determine when or why that might be. Perhaps not anytime soon, or to the extent that it would have were it 2000, but certainly companies that has such a noticeably poor ability to create profit, that it seems assured to fail.

I've certainly been wrong about such things in the past. Twitter, for example, was a thing that I assumed around 2008 or 2009, would never catch on, and that whatever traction it had would fade within a few months. I had similar assumptions with Netflix being "doomed to failure" after they tried to split the steaming/DVD rental services. I've been laughably wrong on each of those things, so it's entirely possible that I'm just not appreciating that maybe the world itself works has changed in a way that I haven't grasped. I just don't see how tech companies which can't manage to turn a profit, let alone offer predictable income, are able to sustain longterm value investment. It just seems like a hopeful anemic.

Interesting question. I like the WeWork and Quibi examples. Imagine most of the Nasdaq being made of companies like that and you get an idea of 2000. 00 and then the GFC I think really hammered home business plans and path to profit in the broader market.

Crypto though I think is where we will see an 00 style collapse. Many of the companies are scams or lightly disguised gambling platforms. The technology is poorly implemented in many cases, leading to theft. There are also a large amount of drifters just taking people's money. Maybe crypto has protected the broader market by being a honeypot for all the exuberant behavior? IDK.

I think you should be careful discounting social networks. Meta, as one analyst I read said, is a cash volcano. IMO, ATT effects for Meta and Google are overblown because they have so many properties to gather data from. Ads on both platforms work and are valuable. Though they are not immune from general economic slowdowns.

Even though TikTok is private, the little that has leaked shows them doing extremely well. Twitter has been mismanaged for years. Musk is right that Twitter should be a decent business, but it remains to be seen if he can get it there.

While I'm pontificating, and since you also mentioned Netflix :) another spot I see about to implode is content spend. Look at how much Netflix, Disney, Prime, etc... have spent creating content the last 5ish years, and then look at how much they charge a family for the access. There is no way that level of spend continues. We have been living in a golden age for content with the variety and amount, and I think that is about to end. With the increase in rates and the market pullback overall, content spend is going to have to get cut.

I've been through 3 lays offs years ago and after the 2nd one I got pretty good at predicting the 3rd. It's basically a cookie cutter approach.

Watch out for emails that talk about "tough decisions" and "respect for our people". I actually took a company email, printed it and highlighted key statements and told everyone lay offs were coming. About 6 months later they were formally announced.

Maybe less relevant now that a lot of companies are still remote. In the past when a company cuts back on office perks, such as snacks, it’s often a leading indicator of financial issues and possible looming cuts.

Yup, or reducing janitorial staff, or talking about extending payment terms for suppliers. All canaries in the coal mine.

Or just read the 10-Q and 10-K reports and see the revenue (in your part of the org, if separated) go down.

I'm not sure comparing a company with $28 billion Q3 revenue to .com bubble makes much sense.

During the dot com bubble even companies with massive (for the time) revenue did huge layoffs. Cisco was probably the poster child for that.

I helped a friend move after she was laid off, a couple years after the dot com bubble popped. One of the eeriest things was seeing all those shiny new buildings in Silicon Valley, sitting empty.

It was like 15% of the businesses just evaporated.

It was a Cisco building in particular that I remember.

I was over on that street recently and everything is occupied again, though many of the names have changed.

When I left Cisco in 2014, some of those buildings were still practically empty.

Not necessarily: I know companies paid 2 weeks/year in the first round and 3 weeks/year in the second round a year later.

Sounds like everyone got a weak deal.

I'm close to deciding to go back to University to get some additional education that's likely to improve my work in the future. I can afford it without any salary. Based on your experience, do you think this is the right moment to do so? I'm employed at the moment.

What are you going to pursue?

If you're looking for income growth and are already in professional position making decent money it's almost never worth it to go back to school.

If you’re going in order to get education that you personally want, now seems like the best time. The economy will recover and you’ll be able to get back in later.

If you’re going because you think it’ll give you better work opportunities later, I suggest thinking carefully about that. You’re already in your field. Even if you’re in an adjacent field but still in tech, you can usually transition — I’ve been a gamedev, worked in finance, been a pentester, and now I do ML. The question of whether I had a degree came up exactly once, very early in my career.

Academia can be a good fit if you’re going for the right reasons. Make sure you research what life is like at that university, and plan out what you hope to get from it and where you want to be five years from now.

Great advice! Where do you see more opportunities in the near future, ML?

Nothing interesting will be reliably funded over the next 5-ish years given the current macroeconomics.

If we’re talking about where the opportunities (jobs) are going to be, then you’re probably looking at tech roles within non-tech companies. These companies have been dying to modernize but haven’t been able to hire engineers due to the tech bubble.

After that, tooling that enables non-technical companies to build software - whatever that looks like.

The really high paying jobs of the future (well, and really now to be honest) are going to be some sort of combination of Data Science + Speciality Science. Think biomedical engineering, material scientist, chemist, any engineering discipline because the thing we need the most right now are better medicines and antibiotics against the rising threat of resistant bacteria, COVID showed us we still don't have a shot against a really bad virus, we need better batteries, better power generation, better cars and modes of transportation, etc.

What we don't need any more of is web cruft and CRUD apps, social networks, and people figuring out more ways to mine our data and shove ads in our face.

> What we don't need any more of is web cruft and CRUD apps, social networks, and people figuring out more ways to mine our data and shove ads in our face

(No snark intended, my background is in science...)

The fields that would benefit society the most are not typically the fields where the most money is to be made.

This was common on what a lot of people did when the dot-com era crashed to an end. Almost all my software engineering friends went to grad school, most for their MBAs and law degrees, a few stayed their course in software engineering and bit-twiddling.

If you look back at those people who went to switch into mba - did it pan out for them?

I did that after I got laid off early 2009, although for me it was going back to finish my bachelors.

Spent two years in school and got to sit out the worst of the recession. However, (in the US) tuition increased a ton from when I first went to school and has only gotten more ridiculous since I graduated.

Personally I'm glad I did it, it just took a while to pay it all off.

From personal experience school is much better (and more fun) later in life, especially if you're genuinely interested in what it is you are studying. If you can afford it, or even better - get your company to pay, it's definitely worthwhile. You may have to pace yourself, as taking on a lot of credits and full-time work at the same time is not easy.

> There will be more, and the payouts will be a LOT worse

Yep, was with a company that went out of business slowly - I was one of the last 10 employees to be let go (on the day the company officially went out of business). The first round of layoff severance was something like 6 months of salary. By the time they got down to the last of us, it was two weeks.

Except the very last round, where you're the person left to handle sale of IP and so forth. Then they'll pay you well to stick around for a few months doing nothing.

Are you referring to rounds at the same company, or rounds across the economy?

Rounds at the same company.

Not the OP, but what I’ve experienced is severance packages get worse across rounds at a single company. A previous employer started at 1 year pay / benefits, then six months, then six weeks + two weeks per year of service.

Then you have corporations like the previous one I worked at, which had a terrible 1 week pay per year you've worked there, capped at 4 weeks pay.

I know someone who had worked there for 17 years that got laid off and only got 4 weeks because of it.

They never got around to laying me off, I ended up quitting much later than I should have.

That really puts loyalty towards your employer into perspective, doesn’t it?

I read it as same company.

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