Why So Many Tech Companies Are Laying People Off Right Now
theverge.com
theverge.com
They rely on a constant influx of gullible, industrious and ambitious people willing to jump through hoops for a bit before they get averaged into the grey mass of middle management.
Middle management is a scam where you let your eager workers feel they got somewhere but then get stuck for 15 years going nowhere because it mathematically doesn’t work to keep promoting everyone.
And you can’t promote people anymore who aren’t women minorities, anymore.
So then you have to clear cut middle management, especially if white and over 40.
The layoffs are basically a cover to do exactly that.
Then they refill the buckets with new dumb industrious people and ring another 3 years before doing it again.
It’s a talent Ponzi scheme and works everyone. And it only works with regular layoffs.
I see this type of comment and sentiment more and more in threads on tech companies, and I have to ask: what exactly is meant by it? Is the idea that cycles of cynical exploitation only exist in capitalism? That seems flatly false, on every level, when compared to the other options. Bureaucratic exploitation exists everywhere, always has, and always will.
Viewed more fully, the argument points out that capitalism tends to concentrate wealth. On the other end, people without cash reserves get pushed to subsistence living, since they can be pitted against each other to compete for the lowest salary. And you can expect middle managers to side with the people with the most money, since they'll receive rewards for helping them concentrate their wealth.
That doesn't claim that you can eliminate bureacracy. It just points out areas where capitalism itself is the problem, and you can consider other systems. Or improvements to this one, though analysis of capitalism suggests that most improvements will be co-opted in favor of those with money against those who don't.
So that's what the phrase means. There's still a lot to unpack, but that's enough to suggest that there's more to it than just a buzzword.
Your comment has a new angle, but it only says how, not why. To paraphrase, layoffs are a way to fire white people in middle management in favor of women minorities. But why is that so?
JFC. Stop making minorities your foil. There are plenty of white guys in middle management. There are plenty of all people in middle management. Middle management is just the rut that everyone gets stuck at in the American Dream (tm).
Seeing non-white or male people get promoted doesn’t mean that white men aren’t getting their fair shake. At the scale of these major companies (tech and non-tech), trust me there are many getting promoted. You’re just hyper focused on minorities and women because that bothers you.
Easy to signal when the money is good, but now the stock prices are tanking and you gotta cut fat.
In my mind it proves that a small number of people really do try to use minorities as scapegoats for no good reason.
1. A disproportionate number of people who are laid off being middle managers.
2. A disproportionate number of people who are laid off being white men.
Rather than speculating, go find the data. You'd have a great lawsuit on your hands! Until then, this is just ridiculous speculation.
Nobody who isn't a member of a minority group can get promoted anymore? Come on. Like, we do promotions all the time. People can look around and just see that this is false.
As for what questions this might raise about the perceived "value" of these people, those are left for the reader.
This is true, IMO. Lots of hiring happens because "Of course, you need a program manager!","Of course 3 QEs need a QE manager!", " Of course, a company our size needs an Innovations Lab!" etc.
> The answer is that investors have changed how they’re evaluating companies.
Correct. If your valuation shrinks 50%, your ability to obtain capital shrinks with it. This will drastically affect how you distribute your resources, particularly in R&D heavy endeavors.
If your revenue is expected to shrink, your profit margin will likely shrink as well unless you lay off some workers.
For startups, it's about survival because their growth models are no longer valid under expected economic conditions and harder to get VC funding.
Also something to keep in mind is that other things in the environment are changing. Facebook was hurt by Apple privacy tightening. Consumer decisions and behavior may change as a result of widespread job cuts and higher borrowing costs. And politicians are ramping up pressure on the sector.
Lastly, for better or worse, investing in headcount is more forgiving than investing in heavy capital equipment because companies can make large scale job cuts relatively easily. It's easy to be upset about the downside, but the upside is that some large proportion of the time between economic cycles, large profitable tech companies might be willing to add headcount that isn't absolutely required.
So while there is no need for a company with cash flow to raise money VC-style, I think they pay a lot of attention to how "investors have changed how they’re evaluating companies" for reasons like: having to struggle with the board and the largest shareholders (all the way up to the board firing the CEO if need be), potential activist investors picking up fights with something they dislike, or even a random outside analyst (or several) publishing a crappy outlook. Some of those seem tangential to the business, because CEO is closer to the operations and often knows better, yet it seems to be a factor.
That's a pretty ridiculous non-answer. The people who initiated these layoffs are some of the most aggressive and sharp (not commenting on moral or intellectual side) in the world. They are different because they are on top of the world food chain and mostly got there through their own efforts (Satya, Zuck, Jassy, etc). They are absolutely not stupid and must have very specific reasons for doing this, which unfortunately the professor here failed to shine any meaningful light on.
Now that bubble has burst.
> The internet will continue to be integrated into our daily lives. Bold prediction: in 2023 you'll finally be able to book your dentist appointment without talking to a person.
There's so much more to do integrating the internet (particularly mobile internet) into our lives. So much.
We're in the middle of the deployment age, which favors incumbent companies who actually sell goods and services; not so much startups/tech providers. The latter are favored in the installation age.
(My thinking on this was informed by this masterful essay from 2015: https://reactionwheel.net/2015/10/the-deployment-age.html )
It is difficult to let them go en masse because the people and the media will happily go with torches and forks to blame you with everything that’s wrong with capitalism. Unless everyone else in the market is also in the firing mood.
Big Tech views layoffs as an opportunity long overdue, and now it is the best time for them to execute without too much outcry.
I am not defending the moral side of these decisions, just saying that this is how all corporations aiming to maximize shareholders value work.
Real reason:
Twitter cut half its staff and still works fine. Everyone said it would explode and the servers would shit the bed, but you don't need 7000 employees to maintain 5 features. As soon as it was clear half the employees were redundant, other companies realized they could lay off some of their useless people too. Companies had huge bloat and realized the core operations would be fine if you can some people, so they did.
https://www.npr.org/2022/11/25/1139180002/twitter-loses-50-t...
By having all those workers and features in the works, it prolonged their position and increased evaluation. Which as we can see worked amazingly. Usually they would have sold to a tech giant like Microsoft or Facebook. An entity that can eat the cost because they don't know what to do with themselves and don't care about profits.
Musk won't make back what they bought Twitter for, not even close, and neither would have the original investors if nobody bought it.
More interestingly, I have a theory that the app has not had a large-scale breakage precisely because of the reason they had bloat.
Having a large org run on microservices makes it likely that you are running more infra than you require. But then failures tend to be self-contained in systems. This then means that on average, a failure will only affect one small part of the system rather than the whole.
It will be interesting to hear post-mortems from engineers once the spotlight dies down and people are ready to talk about what is happening internally.