Either way it is almost certain that a large amount of people working in these companies don't contribute much to the generated income and now the executives have been given an excuse to perform mass layoffs without scaring off the shareholders.
Until you solve the problem of middle management status being based on the number of people you manage, you will keep getting bloated organizations. Until an organization figures out a better way to manage their dependencies on each other, every new thing an organization wants to do will require an n log n number of people. (In bad organizations, it's n^2.)
Organizations are just committing on "not growing" in terms of product offerings in the next period of time. The stock market, after some time, will reward growth and the cycle will start again.
I understand this is signaling that the author understands technical concepts like big-O, but why use technical terms imprecisely when non-technical terms work just fine?
It's beyond the scope of this conversation, but the short is that it seems to become a network effect problem. Every team does not work with every other team, but it does end up in a hub-and-spoke system with matrixes over the system. Oversight (ops, security, PMO) do not scale linearly because the competing priorities make scheduling more difficult.
I've read others who have spoken about it, but I'd have to go back and find it.
With more typical interest rates, rich people will make more typical investments.
They put their money in hype when the money is free or close, and putting it in those "investments" make sense. Like when you have QE and near-zero interest rates...
"even the tactical errors committed by investors were insufficient to create the bubble that burst so dramatically last year. For that, we needed a perverse private-public partnership led by Wall Street and the Federal Reserve. The Fed mistakenly created too much money in the fall of 1999 in order to fend off the expected deflationary impact of the Y2K bug—effectively pouring gasoline on a smoldering fire in the stock markets—and banks and brokerage houses used some of the excess liquidity to fund the share price bubble. In the fourth quarter of 1999, the Fed expanded the money supply at an annual rate of 22% (9.6% after seasonal adjustment). In comparison, the rate of growth of the money supply in the fourth quarter of 2000 was 9.2% (–2.8% after seasonal adjustment). Fed Chairman Alan Greenspan, seeing the flood of money into risky start-ups, pricked the dot-com balloon with monetary tightening in the spring of 2000. It was the dot-coms’ misfortune to be first the beneficiaries and then the victims of these larger economic forces".
In that case they didn't need "near zero interest" rates, because they were artifically promised much larger returns than the actual rates.
That is the actual key driver: easy handed loans for BS uses (to VCs, and even better the general public), and hyped returns above the rates. The "near zero" rates is not necessary, it's just the more extreme case.
https://hbr.org/2001/05/whos-to-blame-for-the-bubble#:~:text....
And too many of these organizations still act like they think throwing more engineers at a problem makes things go faster.
And the $$ and prestige of working in tech still attracts too many people whose primary interest is not just in getting things done, but being seen doing it, and, as, you say, improving their status.
The tide is going out and we're seeing who isn't wearing bathing suits. But it might be the whole beach.
... Still though the primary thing driving investment in tech and software is the same thing that drove investment in industrialized cotton mills or Ford Model T assembly lines: mechanization makes profits, and... computerized mechanization is the most powerful cost reducing system ever known to mankind.
And "in tech" is right. At my current company, we have more PMs than we do developers. This leads to a really poor feedback look where the PMs are trying to justify their jobs, so they "look busy" and start generating cruft that is probably not important (like changing text without really a great reason, sure maybe it is "polish" but ... there's real things to do and it distracts the engineers).
We don't need more PMs than we have engineers!
Even if a PM does the right thing by talking to customers and learning about their pain points, the giant bottleneck in dev capacity means that those customer pain points take forever to address, which often leads to more customer frustration than if you had never talked to them in the first place.
“What the heck happened? This was just working last week! Where’s the… ugh! Where did the button for this go?”
“It got Product Managed.”
Google Meets and Slack are repeat offenders.
Agreed. WeWork being the prime example of something that was evaluated as "tech" despite being anything but.
Plus the "deliver cheap and fast" was not just because tech was so useful and must have, but mostly because of a number of factors, like people having money lying around to put into stocks, interest rates being low, QE, and so on.
With a decline in income comes a decline in advertising, (taking "eyeball" based companies), and a decline in BS subscription spending (taking down many "real business model selling SaaS" companies, resulting in a downward spiral...
We might never see it "back in full swing", the same way cobblers never did came back in full swing...
https://novum.substack.com/p/what-if-worldview-zero-interest...
(More technically, they aren't shareholders until it vests, but they are long the equity)
Usually layoffs include accelerated vesting anyway.
Did I wake back up this morning in November 2001?