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Comment by chasd00 | Hacker News Reader

Why did so much tech go on a pandemic hiring spree? Did they think it was going to last forever? I don't understand all everyone ( in tech ) made the same mistake. "oh let's increase our headcount by 25% in response to a pandemic that is mutating and gradually lessoning in severity while vaccines and other medicines are dramatically increasing in efficacy... but it's going to last forever." what am i missing? How did the whole industry get it wrong? Did they think the whole planet was goign to be ok with these authoritarian hobby regimes keeping everyone locked inside glued to a monitor?

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What makes you think it was a mistake? Could very well have been planned. "Lets hire like crazy in order to meet demand, and when the demand disappears again, do layoffs".

Probably someone calculated something somewhere saying "If we hire 25% more people to take advantage of the increased demand, we'll earn more profits even with layoffs with heavy severances for everyone after X months".

well... I guess.tiff, i mean that could very well have been it. idk it just seems like a terribly bad business decision by the whole industry. If it was a capacity thing then adding headcount would decrease capacity for at least a year or so as you have to integrate all those people into culture and work to get things productive. On the other hand, I can see a "turn the knob up, then turn the knob down" strategy making sense to some people.

> On the other hand, I can see a "turn the knob up, then turn the knob down" strategy making sense to some people.

Especially when the company culture basically boils down to "The individual employee is worth nothing" and "People should be able to be fired as easily as they are hired", which Amazon seems to be, at least judging by the people I've been close to who worked at Amazon.

One alternative is where companies did not hire 25% to meet pandemic demand and many of those had to take lesser jobs or no job at all.

As another commenter said, employees have been hired in corporate and technical roles that require training to become productive. Hiring is expensive, especially in technical areas, training is expensive and takes a lot of time, severance packages are expensive. The layoffs strike me as damage control rather than a well-calculated business move.

Amazon is letting go 1% of it’s workforce, that’s hardly a 25% bump from COVID. It’s just normal restricting making headlines because of their size.

If such conversation occurred, it was probably worded way different than my quickly thrown together example, where the number was just something I pulled out of my ass, just like the imaginary conversation.

There was no demand, though, not for these roles.

These companies already know how to hire temp contractors, which is cheaper and cleaners than layoffs with severance.

The real answer is that they pretended the Covid money fountain wouldn't end.

There's a more simple explanation. Companies were hiring because they thought they were gearing up for a bunch of work and that there was gonna be a war for talent. I could be wrong, but at least Zuck seemed like a true believer in what he was doing; is there anyone that questions his over attachment to the Metaverse? (I understand he may have known this was a risk; possibly other execs were more aware, and looking forward to it).

More to the point, it seems that companies were hiring because other companies were too. They didn't want to miss out on the party. Not an economist, but you see this behavior all the the time in markets.

Then after the euphoria wears off they notice:

  1. Ditching a lot of unprofitable segments starts to look attractive. The chance for   growth could be pretty slim, especially in a slow market.

  2. Some of these people are raking in massive salaries for jobs they could get anyone in to do. It looked to many people like the strategy was to buy up people to keep them off the market... not shocking to see the change in heart, which lead to:

  3. All these activities were giving employees quite a bit of leverage, and potentially calling into question any managers that might have had "hold down the fort" roles.

I remember having these conversations last summer. It wasn't 100% clear what was going to happen, but this wouldn't have been surprising; people knew. They did about the housing crash, too. It's popular to act like this was discovered by a lone genius, who goes against the crowd.

My dad with no connections and basic financial literacy, with some eyes on real estate, predicted this since around 2000-2004. I remember growing up and hearing about the certain housing crash that was coming that was so obvious anyone could see it. (sure some specific points of failure may not have been obvious, but we knew what was going to happen)

Two counterpoints I'd raise, in case they can help broaden your perspective:

- Industry wide layoffs != Mistake. By analogy, think about naturally occurring forest fires. Vast majority of ecologists would agree that such fires are healthy and necessary for the long term health of forest biomes. It's not a "mistake" for the trees or brush to become dense when energy or water is plentiful, and it's not wrong for a fire to destroy much of existing forest (allowing new and different growth in the future). So it is with business cycles and investment hypotheses.

- There are many accidental products or inventions, that proved more popular and durable than anyone could reasonably expect. Have you heard the story of how champagne was invented? Dom Perignon (yes the actual historical figure) was a French monk in the 17th century, tasked by the Catholic Church to solve the problem of wine fermentation that resulted in too much carbonation in the Champagne region, since the local climate was such that winter was too cold and the fermentation process was naturally interrupted by winter there in such a way as to introduce unwanted carbon dioxide. Wine with carbonation was considered undesirable, but Dom Perignon tweaked the process (inventing the "French method") in such a way as to invent a drink that consumers surprisingly found preferable (remember, nobody originally wanted carbonated wine at the time). The point of this story is that, there's no way to truly know what becomes a lasting trend or a change in consumer tastes; maybe people really would continue to shop and consume media online at higher rates even post-pandemic because they truly changed their tastes and liked it more, after being forced to do it by pandemic? How could anyone know that carbonated wine would stick around, when nobody had ever shown any interest in it before?

The companies are not of a single mind, especially the big ones. Every manager, from mid-level to executives, have the tendency to hire more people, because the more people are under their reign, the more power and influence they have. Therefore once the environment is friendly, they surely will go on a hiring spree, regardless of what may happen in the future.

Things were transferring from non digital to digital decades ahead of expected[1], so head counts had to be adjusted to where companies thought they would be 30 years from now.

The gamble was once people went digital only, they won't go back. The bet was wrong. People are back to their 2019 digital habits

Plus, with all the record breaking profits, there is pressure from shareholders to re-invest in the company (and create even bigger record breaking profits)

[1] https://www.bloomberg.com/news/features/2022-10-11/amazon-am...

Hindsight is 20/20. Back in 2020, the perspective was very different. It was very realistic at the time to see the world going much more digital/remote, and for good.

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