The layoffs will continue until (investor) morale improves
techcrunch.com
techcrunch.com
Google is crazy too: they will spend more on stock buybacks than they will save through the layoffs, yet are investing nothing in fixing their actual, deep structural problems.
In my area, Amazon has tripped up so bad I can't even have the basic necessities delivered to my house due to a staff shortage (they throw an error at checkout claiming multiple items can't be delivered to my address...items I've ordered for at least 4 years straight on a monthly basis without issue) so I am going to go from spending tens of thousands per year with Amazon to zero. I am in a city in the United States. Amazon will happily sell, ship, and deliver some no-name brand item from a third party seller within 2 hours of ordering, but they can't be bothered to do the same with the stuff I ordered.
If they weren't making money off me (which I doubt, I spent $23,967 on Amazon last year, and their products are only slightly cheaper than local stores...like CENTS), why were they willing to sell to me to begin with? I've switched to a combination of Costco/Walmart for most of my stuff, and will soon be independent from Amazon completely, all because they refuse to deliver my core products that they've delivered for years on a monthly basis without issue (toilet paper, a 12 pack of my favorite energy drink, my favorite brand of protein shakes, etc)
Really Amazon? (note the error I receive says that the item cannot be delivered to my address, and to select another. It is a residential address tied to a house and I've ordered the exact same item month after month. they also blocked subscribe and save.)
Sorry, this is a rant, please carry on.
It doesn't change the decision whether it's better to reinvest in growth or pay out the profits to the owners; the primary reason for buybacks is that in the current tax law it's a slightly less tax-burdened way of paying out profits to shareholders as "dividends-that-technically-are-not-dividends".
Wow. Are groceries that expensive in America or are you buying for a family of 8? My family of 4 only spends about 8 to 10k on food stuffs.
I've started to notice this too - they seem to be experimenting with trying to push people to different "stores" within Amazon that are not unified: Fresh (which is now gone?), same day vs not etc.
I already didn't order high-margin items from Amazon because of the risk of counterfeit products, and Prime no longer meaning "this will be shipped from Amazon inventory within this defined time Window" makes that a useless marker too.
I cannot be bothered with any of this, and got myself a Costco membership, so Amazon (.com) have effectively lost all my business as I try to extract maximum value from that at this point.
Because they are making money off you. You are forgetting what the end price does includes the store margin (while in America it doesn't include taxes, lol).
Not only they are making money, they do it regularly. Maybe profits aren't big per user, but there are hundreds of thousands of such users so ARPU is quite high.
We may argue that this particular buyback was ill timed, but still, banning all buybacks is a very very strange idea
starting a company allowed some pricing power, plus individuals could start their own entrepreneurship (but weren't able to hire anyone)
This is not secret knowledge
I wanted to ask instead of assuming before making the following argument to the previous claims:
> You might be surprised to learn that companies still existed/exist under communism, with not a single investor around ;)
> Those were not actual companies that existed. They were just another part of the government with a different name.
> no, there were worker owned coops.
As I suspected, these "worker owned" cooperatives are completely dependent on the party (unlike current cooperatives). That is not my idea of "owning", since party members that are "workers" of the cooperative only in name would be deciding a lot of things in how the cooperative is run.
> Many cooperatives were vulnerable to exorbitant taxation by local officials, high interest rates on loans, and protection rackets run by criminals, the cost of which inevitably were passed onto consumers in the form of mark-ups. “Kooperativshchiki” (cooperative owners) thus became a term of abuse in ordinary Soviet speech.
So I agree with user nradov here: "Those were not actual companies that existed. They were just another part of the government with a different name. "
I must concede, at some point the lines can become blurred.
The obvious problem with USSR-style communism was/is the authoritarian dictatorship, so everything had to be integrated into the power structure, so only very small companies were allowed to be independent.
If you became successful without the Party? That's a no-no, so thanks and the Party will take it from here.
If you became successful with the Party? Great, now here's a bunch of chinovniks to help you.
As for individuals starting their own entrepreneurship - only in certain specific, government allowed situations. And even then it was frowned upon both by the government and by the society.
Also, being entrepepreneur didn't make much sense anyway, because money didn't matter as much as talons for items. That's why used cars (not requiring talons) cost way more than new ones -- as in, the taxi corp could buy new cabs, drive them for a few years, and then sell with a profit.
Worker-owned coops were nothing like what we know under capitalism. They were huge semi-governmental structures filled with bureaucracy.
Dividends aren’t great tax wise but some big SV companies like Intel pay them out.
Tax code can always be fixed if the gov wanted. For some reason, they don’t like profit sharing, only speculation. More tax payout I guess!
The companies want it that way, so they buy the politicians who will want it that way.
I say this as a heavy chat GPT user. I really love it but not nearly like sending and email to a senior engineer: “please make X” - which then turns into the senior engineer scheduling meetings with the required teams / individuals - navigating the technical and (unfortunate) political issues, coming up with a design and implementing it - getting things done in other words. I don’t know what future versions of GPT will look like but the current one is light years away from having that level of capability.
Even a simpler task like fixing a bug cannot remotely be handled by ChatGPT.
It is almost like LLMs are a new dimension - we used to have X and Y, now we also have Z. Yet, we are thinking that this is just more “Y”.
The real reason is these companies have been overpopulated and produced basically no visible changes in 5 years. Google search is worse with auto-generated results not written by humans, YouTube has become super rabbit hole instead of discovery, Twitter shipped NFT profile pictures and Spaces.
I suspect it is more likely that the benefits will accrue to start ups as they will not have so much inertia working against them in terms of leveraging AI. People with ideas and limited means will likely be the primary benefactors due to AI amplification I think.
Don't forget fleets rip
Look, if you want to not need employees, you need to do capex. If you spend more money on stock buybacks than you save in payroll by doing layoffs, you're taking money away from capex.
I was specifically addressing the phenomenon described in the article, where the threat of the large number in future is demoralizing and destructive.
Reasonable people can consider them facets of the same phenomenon.
I worked for a company like this as well. It’s easy to ignore investors when you’ve had an upward trajectory year after year. They’ll put up with almost anything when the stock price keeps going up.
But as soon as your growth slows or stops, reality hits like a ton of bricks.
Investors have lots of place to put their money. If Amazon cant deliver what these investors want, they’ll put their money elsewhere.
Amazon is free to ignore them, they’ll just have to deal with the consequences of that.
I mean, as an employee, would you stick around for less compensation? No, most people would find a better paying job.
The consequences aren’t necessarily that significant: mainly the cost of raising further cash from the markets, which doesn’t look like Amazon will have to do for many years, if not decades.
Many people who decide on these things, though, are mostly compensated in stock. They need a good price to sell their stock at.
Yes I'm aware stock-based compensation is also an expense. But as I understand it, that expense = the initial value of the grant. So if the stock price goes up it's like the employee got a handsome raise funded entirely by Wall Street.
Choosing to reinvest that money in the business caused some consternation, but the consistent revenue and growth let them ride out periodic misadventures and hits to the stock price. It turned out to be a good move in the long run, because they weren't bluffing about their business fundamentals.
Amazon had the no profit strategy because Bezos had ideals and as the Czar of the place, finance would not convince him to change strategy (But I bet they tried, must have been a fund meeting to watch). Now he is worried about his yacht and pet projects, so he let finance rule the place for the benefit of his stock price. Same with Google. L&S don't have their ideals anymore and just want their money protected. Finance has this covered. There is no care for the brand nor its other stakeholders anymore.
They basically became another IBM, Microsoft, etc...
"their actual, deep structural problems"
at this point I think Android and Chrome are their most high-quality things.
Calendar is okay too, but it does what it did 10 years ago, oh, sure, it has Meet integration too (which sucks, and 720p)
Maps' mass transit things are getting better, but it's not going to save Alphabet
My Pixel 5 phone is still under warranty and has developed a battery fault. I contacted Google support:
1. No option to repair, only replacement and only by post (unnecessarily inconvenient given that it's just a straightforward battery swap that any number of local shops can do -- I did this myself in the past except that this phone's still under warranty and I'm too pressed for time to be sourcing parts etc).
2. I got repeatedly prompted to confirm that I was using the charger that came with the phone (this seemed to suggest there might be warranty implications if I wasn't -- not sure this is even legal in the UK).
3. I had to consent to a page worth of legalese, including granting Google permission to access my phone usage data -- wtf is that?
In the end, I chose to walk into a third-party repair centre and just pay for an out-of-warranty repair. Took an hour, £50 ($60) and a voided phone warranty -- IMO a great deal compared to getting warranty service from Google.
I don't know about Chrome, but if Android is their most high-quality thing, then at the very least they are also losing in developer experience. The churn in libraries and frameworks there is, from what I've seen, only second to Web frontend, and bugs in newer things are really embarrassing. "Ready for production" (they claim in the FAQ) Jetpack Compose is great when it works, but even the Android Studio-generated Compose template crashed the IDE several times, while manually setting it up crashed Kotlin compiler[1]. WorkManager and Room are important things that bugged out for me, too. And I'm at it for just 5 months - there's got to be way more dragons that I'm yet to see.
And yeah, there's Flutter, and now there's this new Jetpack/Compose whatever. But as is tradition it's nowhere near production ready. And when it becomes finally solid, they just abandon it.
Angular went through the same cycle. I'm looking forward to their new React++ :D
google has essentially one product (85% of revenues, after fiddling revenue sources) which was developed almost 5 years ago. Everything else is a rounding number and most are money losers.
The company has been drifting all that time, seemingly unable to release any new products of significance. Google cloud is an also-ran. Android worked in that apple isn’t a monopoly, but no money spinner and seemingly abandoned. New “products” appear and then are dropped. Even the layoffs (source of this thread) were conducted in a ramshackle fashion.
They even let a random small company swoop them in machine learning. They had the pole position in that race but after jg left they seemingly lost interest.
Tech leadership bears blame for nourishing that "there's no tomorrow" / "growth will continue forever" culture, but it's such an unhelpful take to portray this as some sort of a class struggle with shareholders. Especially since for a good number of big tech companies, shareholders don't actually have much say and founders hold controlling interests.
Employees in tech wanted, and were fine with, and even cherished "a sustainable and resilient business". That's the golden age IBM, Intel, AT&T, and so on employee for example.
Then companies started being about the stock market, and short term profit, throwing them under the bus whenever they had a chance, while still paying nice bonuses to the C-level and middle managers even when they run the companies to the ground.
So, yes, they felt little loyalty not to "jump ship" to a company didn't give a shit abotu them. Hell, the C-level execs that are paid 10-100x better than the employees would not think twice to jump ship at any chance they got, and somehow the employees are at fault for doing the same?
I mean I half agree. There's been factions in side the tech industry for years trying to get people to think about what would happen in this sort of scenario, to understand that "tech workers" have more in common with working-class factory workers in the 50s and 60s that with Peter Thiel and Sam Altman. That faction has pointed how IBM or HP acted when they were on a downward slope. To think about collective action, solidarity, other measures that might help ensure that good jobs don't become bad jobs become no jobs to further enrich a handful of factory owners.
But the braying voices places like here have always shouted those down. Always.
Except you rarely get inflation-matching pay rises, so the only way to prevent the annual erosion of your situation is the constant team growth and never-ending promotions.
I learned that the hard way a few years back, then got my act together and made sure I’m always perceived unhappy with salary - to pull that off, you need to be backed by delivering stuff and being seen. Do your homework, and ask for the recognition, that’s my tip.
The prevailing engineer perspective is that this behavior causes the smartest engineers with options and ambitions will move on. Other top engineers will leave simply because they prefer working with other great engineers. Three years of small plays like this from management is enough to cause complete brain drain, as even those waiting for more vesting will lose optimism. It's one thing to have 6% churn from engineering/product in a year. It's another if you lose the most qualified and respected 6%.
I doubt that’s the case. The people deciding to lay off are just getting rid of 6% of their ‘resources’, they don’t consider that those 6% might be doing 50% of the work.
So 3 years on they’re just wondering why their engineering team is so useless, and thinking back to the good old times.
2. My comment described a process in which talented engineers self select to leave companies, and management only had indirect input on which engineers leave.
2. If we wanted to use a number with authority we would probably use 6.5%, which is the US Buerau of Labor Static's number for 2022 CPI.
3. My level of precision (one digit) should have been an informal indicator that I was using a rough estimate.
I have noticed that recruiter outreach to me has picked back up. I'm pretty senior and they're offering me senior roles that could pay more. My current employer has benefitted from current events though so I'm staying put. But if I ever want to fuck off, I easily can.
I have a friend who is very junior. He got promoted but still fucked off to a new better job because his current employer treated him poorly.
I think people are gonna start remembering they can fuck off again, and we're gonna end up somewhere between here and where we were when the job market was on fire pandemic and pre-pandemic.
It's also important to note that wage inflation and the inflation of goods and services are separate and not always correlated. Just because milk and bread and cars cost more doesn't mean that the value provided to a company by an hour of an employee's time has risen by the same amount (or at all). I'd love raises that beat inflation every year, and for most of my career I've gotten them, but now that I'm not it doesn't necessarily mean the company is just trying to screw its employees.
Also, critical parts of employee retention include "keep the worker alive" and "keep the worker satisfied". If housing goes up 20%, the wage better increase by 20% as well. Homeless or unstably housed engineers are not productive engineers.
These are all very good arguments for why people making $15/hr should get regular raises to keep pace with inflation as a matter of course, not a very good argument for why someone making $200k copy-pasting JavaScript from StackOverflow should.
That's an unfounded assertion. I know plenty of software devs & other tech industry folks who cannot afford a house and are being squeezed by relentless rent increases (myself included). Many on the lower end of the pay range are a layoff away from homelessness.
It’s not that activist billionaire, shareholders are demanding layoffs. It’s the workers fault for wanting a share of the pie and not just taking what they’re given quietly and meekly.
You’re right, it’s not a class struggle. For it to be a struggle both parties have to recognize that it’s actually a struggle.
This argument would make sense if the companies doing the layoffs were largely unprofitable, and not spending huge sums of money on stock buybacks and inflated executive salaries.
I keep seeing this idea that people need to work harder and you’ve got the Mark Zuckerberg‘s of the world pushing this idea that the Meta employees aren’t working hard enough and that’s why they are flailing. Not that the actual core strategy and shit like the Metaverse are bullshit. Or Google that has had some thing like 3 to 5 different chat systems over the past 10 years and utterly baffling product strategies along with a reputation of killing products or neglecting them.
But it’s clearly the employees fault and it doesn’t have a damn thing to do with completely bullshit leadership.
If you stopped paying them, would they stay?
Say you took pride in your skill as a smith. That’s hardly incompatible with finding an employer who will pay for making quality armor.
Pride in the end product might, but most companies make nothing to be proud about, except the skill itself.
So, let's be real, they are at the company to make money, and if they have a better chance, they'll take it. Lack of those, good enough salary already, inertia, and "the devil you know" is closer to the reason they stay.
I can take pride in my skill anywhere I want. What I care about is that my employer takes pride in my skill.
Even if another pays more, I’d prefer working for someone that appreciates my skill (and shows that in ways not necessarily salary based).
Of course there’s a limit to this, but it’s generally true.
I also have to tell, honestly, they give me shit. They act like “Yeah we don’t care that your business survives, it’s your job to make your company earn money. At worst we’ll find a job elsewhere.” I’m constantly tempted to fire them before they tank my company.
Right - it isn't altruism; it's basic professionalism - and the only psychologically healthy thing to get through the day, actually.
"They're paying me decently, they don't take me for granted, don't get in my way of helping them and they definitely aren't jerks. So why not do a good job?"
Actually caring about the product/company doesn't need to factor into it.
My pace has almost always felt a bit off, but I've always hated shipping subpar systems. Whether it's other engineers or some local managers or the business, there's always been extreme pressure in competition with my desire to just do a good damned job.
It's been isolating & draining. Sometimes it's just a matter of spending 3x as long as it would have taken to line up the 300 reasons why at each spot the shit slapdash plan is shit and the good plan is good. Trying to be OK with the process, walking through people who really barely can understand any of... You have to just keep saying to yourself, fine, this is my job, I'm the expert, it's OK that you don't know, & I'm not sure that you do need to know, but here we are & this talking it through is how we're going to decide where we go I guess.
The primary job of an executive is risk management. Let’s say I run an engineering team where people have good ideas 70% of the time, and bad ideas 30% of the time. Famously, it takes 10x the number of resources it originally took to develop and deploy, to remove a bad system from production and replace it.
.7 * 4 + .3 * 3 = 3.7
.3 * 11 + 0.7 = 4.0
An engineering team that doesn’t take 3x the time it takes to do something to verify it ahead of time is actually slightly less efficient overall ( assuming that 3x the time it takes reduces the error rate to 0)
Yea there are lots of simplifying assumptions here, these are all averages, plans don’t all take the same time, etc, etc, etc, and a more sophisticated system would take it all into account. But the results don’t usually change, unless in very special circumstances.
I'd add to that: for all but the most intractably huge companies, there's a somewhat different, or additional, atmosphere that I think is even more important: everyone is focused on the success of the project/company.
Put another way: if you could somehow omnisciently and top-down get each person individually coordinated such that all they need to do is their complete their assigned tasks on schedule and with high quality, that'd be great. But, realistically, you can't (well, not in innovative startups, nor in a lot of tech work). So, if you can get people thinking and coordinating towards goals beyond whatever task someone told them to do, then then you can be more effective collectively.
Maybe you the craft you had in mind already implicitly encompassed this focus towards larger goals. But if you look at popular modern methodologies, organizational incentives, etc., it's pretty clear that's not implied many places.
I care about the quality I'd work I do, I feel it's a reflection of me, even though it find the product to be pointless
* What response do you get from the candidate?
* How do you account for candidates who might be faking enthusiasm due to need for a job?
* How are you measuring this enthusiasm within the company (ie are you having high employee survey scores compared to what you are paying them)?
Like seriously the "we are making the world a better place" only goes so far - especially in a climate where employers have shown who they truly care about. And may be you are suggesting that you might not be messaging that you are making the world a better place and instead everybody gets to be a davinci?
I personally do care about doing good work and ensuring what I do is well thought out and performant. However that does not mean I always care about the company. And what little care I do have can rapidly be eroded.
Workers nowadays are more aware than ever that you pay a passion tax. If you want to work where you really want to work, then companies know this and will take advantage of it.
By “employees” in your first sentence I assume you mean the C-suite?
Those who complain are usually cast as “negative thinking folks” and get subtle punishments.
If you are on a mid career senior salary range, are you going to pick a fight and risk being punished or carry on getting your good salary, bonus, stocks, insurance, retirement plan and perks - in exchange for slighly useless work?
And most of them face no real consequences. They don't have to maintain or repair some grossly abomination of a system, that's the engineers job. They'll be leading new feature dev new business dev forever & ever.
Eg. You can build a section of a tunnel to be wider where you think there should be a subway station, even if the president's wife doesn't think there should be a station there. Eventually the station will exist
And what is your explanation for why it took you twice as long as it did Bob who just plowed that thing with uniform width?
For startups, it's the investors who know only to measure growth because there is no expected profit until the bing bang happens.
No one is asking for endless growth on the employee side. But growth should match responsibilities, and if I gain more responsibility over time then pay should match. And if my salary can't match inflation at minimum then you're telling me I should be paid less for my current work.
Companies prefer to funnel that money to investors and as a result this is where we're at. Note that privately owned companies or worker owned companies avoid this issue more often.
We need to get a handle on inflation and the housing bubble first before we can figure out what reasonable salaries are again, and that’s going to hurt all around.
From that perspective, yes a lot of people make less, but that just means life is becoming impossible for most people making normal salaries.
Not really. Housing is simply becoming more expensive to construct, even in places where land is cheap and building regulations are open. But let's say even if NIMBYism was significant factor: why are all the good jobs where people want to live correlated with higher factors of NIMBYism? Why doesn't everyone just want to move to Houston (which is losing population these days, even if the metro is gaining)?
What a strange question, as if it reverses the correlation. People who buy a property before new people come in, such as SF during the 60s, will inevitably see their home prices rise and want to capture that value without wanting to build more housing. The places where people don't want to live simply...don't see this phenomenon, because people don't want to live there. Of course supply and demand still matters, you can't just build houses in some random part of the country and expect people to move there. You need to build where people want to move. This doesn't really have to do anything with not building more housing, and indeed NIMBYism explicitly denies housing construction approvals.
> You need to build where people want to move. This doesn't really have to do anything with not building more housing, and indeed NIMBYism explicitly denies housing construction approvals.
Just because everyone wants to live in SF, which has a density much higher than Houston, doesn’t mean everyone can live in SF. If SF was a dense as Manhattan, it wouldn’t be any cheaper than it is now, it might even be as expensive as Manhattan.
The fact is that in the modern day even on a FAANG salary a lot of people cannot afford to buy a home of their own. And the salary band at those companies is incredibly wide, owing in fact due to the wide disconnect in salary between engineers, middle management and the c-suite.
But how do we do this?
[0] : https://www.levels.fyi/companies/google/salaries/software-en...
[1] : https://www.census.gov/library/publications/2022/demo/p60-27...
I'm not a FAANG worker; I make well below what they make. I simply do not ascribe to the crab-in-a-pot mentality that a lot of posters here seem to have in attempt to further divide what is ultimately a large range of middle class workers. Total compensation also only matters depending on the total CoL because a lot of those companies require you to live in areas with incredibly high rent, especially with the attempt to remove remote work. And even with FAANG the salary between an engineer at Amazon and one at Google is going to vastly differ, especially depending on what part of Amazon you're working at.
For reference, Pew Research defines middle class as 1.66 - 2x the median salary in America. That would make most tech workers middle class, and FAANG engineers in the lower upper class. In places like San Francisco where the cost of living is significantly higher, you would need to be earning ~230k a year to be in the upper middle class [1]. Though that's by one narrow definition.
The fact is that even your senior tech worker making ~200k a year is barely a blip on the radar compared to how much executives and investors are stealing. If you want to fall for their rhetoric and wonder why things are getting worse for everyone then you shouldn't be surprised.
[1] https://www.cnbc.com/2023/01/02/middle-class-income-in-major...
https://www.census.gov/content/dam/Census/library/visualizat...
In your CNBC article everything is based on household income. Many SWEs would be classed as not middle class based on their own income let alone household income.
The median SWE salary in the US is $110k: https://www.bls.gov/ooh/Computer-and-Information-Technology/....
If you take increased salary due to location and partner salary into account, the majority of SWEs are easily upper middle class.
> In places like San Francisco where the cost of living is significantly higher, you would need to be earning ~230k a year to be in the upper middle class
A solo entry level FAANG engineer basically qualifies for upper middle class. Add a partner and you're definitely upper middle class.
> And even with FAANG the salary between an engineer at Amazon and one at Google is going to vastly differ, especially depending on what part of Amazon you're working at
What are you talking about with "especially depending on what part of Amazon you're working at"? As far as I've seen Retail vs AWS doesn't have different comp.
Google and Amazon also have pretty similar comp: https://www.levels.fyi/?compare=Google,Amazon&track=Software....
Their comp bands likely have a lot of overlap. Differences are more likely to be based on negotiation than working for Google vs Amazon.
My argument has always been that they exist in the middle class. The fact that median income being low isn't indicative of them not being middle class, but rather that the continued squeeze on salary among all middle class workers has resulted in a shrinking of who actually is middle class and what that income means.
The point is that salaries should have increased for everyone. Middle class is not struggling to make ends meet and living paycheck to paycheck. It is living a modest life with modest savings and a discretionary income.
This random article claims the 90th percentile in the Bay Area is $384K. https://www.kqed.org/news/11799308/bay-area-has-highest-inco...
I am not sure how that helps make this clearer though. It almost doesn’t matter at this point. We all know making $55K/yr in the Bay Area is rough. People are getting screwed over.
> Sites like what you share are often going to be representative of the upper band of the salary range since that's who self-reports
Many people have corroborated that levels.fyi is accurate for large tech companies like Amazon and Google. It's accurate for my company as well.
If FAANG comp is middle class, at what point does it become upper middle/upper class? I believe ~$500k is 1% income in the US. Some SWEs who are "workers" break that. Is someone who has top 1% income really middle class?
A lot of SWEs also receive equity compensation (I.e. ownership), which is very much not a middle class phenomenon.
Consider that remote work is more prevalent, the healthcare situation is not getting any better in the U.S. and in this space it has become more common for employees to have to move between companies regardless.
Then the certainty of having a comfortable job at Google or Meta evaporates violently. To the point, where mothers while giving birth learn they are fired. And then we have things like ...Twitter.
Say you were laid off by FAANG or a notable startup and the same or adjacent company reaches out to you a year from now to rehire you, as the "bull market is here." What will you do? The instability is here to stay for a while. This can happen in 2025 again pretty easily.
What is that critical mass of engineers that would demand a startup gets guild approved to join? I can see that happening if one of FAANG becomes a guild company but they will fight tooth and nail to avoid that.
As an investor that is a nightmare, if a minority of startups are in this situation. On the other hand if that is the status quo to getting great people, I can accept that overhead.
I don’t want a levelling effect in our industry. I don’t want gatekeeping either. We aren’t interchangeable cogs, and people who do better than average should not be held down. Promising people with nontraditional backgrounds should not be prevented from entering the field. Despite what people claim, unions would definitely hold people down and lock out new people.
Things are going really well for us actually, compared to people in other professions. That’s partly the case because our industry has been able to remain dynamic and innovative. Much of the success we’ve seen was built by people with nontraditional professional backgrounds and would not have happened if we got bogged down by gatekeeping and credentialism.
When the pie stops growing and we need to fight management over how to divide it, maybe a union will be attractive. But right now the pie is growing rapidly and workers are getting a huge amount of it in the form of both cash and stock. I’m all for continuing with this free, dynamic, and incredibly successful model.
By the way, unions don’t make layoffs a thing of the past. Look at what happens in the auto industry. The beat thing we can do for laid-off tech workers is ensure that we keep our industry dynamic, so there will continue to be new employers to work for.
Turns out we largely are, just like in most other industries. Probably like to think we’re irreplaceable snowflakes. But we’re not.
> people who do better than average should not be held down
Ah yes that old chestnut, that unions mandate No Employee May Achieve Above Average
One of the first things a union would do is decouple compensation from performance and introduce a standard compensation structure for all workers, segmented by job level. (And somehow the people who are personal friends of the union leaders seem to rise in job level faster than the others…)
The kind of people who are attracted to that kind of structure are not the ones who build successful industries, and they are demoralizing to have as coworkers.
This argument is a strawman, and really is a worsr-possible-case caricature of union activity. I've worked in a number of workplaces having a unionised workforce my entire professional career (~25 years, private industry and government) and I've never observing anything like the scenario you describe. Ambitious, talented people are promoted and improve their compensation. Average-performance clock-punchers reach a certain level and stop. Poor performers are managed out of the organisation. Union membership is no ticket to a cushy job for life.
I'm not denying that the worst-case scenario could happen, but it's by no means a given. IMO this kind of fundamentalist opinion is unhelpful, and doesn't reflect the reasonable balance of priorities and opinions which people have out there in a modern society.
This is seen, at least partially, as what drew a lot of people to the current "big tech" companies. They wanted to work on interesting problems. The pay was high, but it mattered a lot less than that the work was actually rewarding.
Onboarding or 'getting someone up to speed' is a far more invasive and disruptive task than many believe. Manager probably dream about adding and removing employees as easily as buying more or less food for a catering event. Institutional knowledge and employee quality are no where near that easy.
> Things are going really well for us actually,
Not right now anymore. Have you seen the layoffs? Things went well because of years of cheap cash. The music is stopping and there will be even more layoffs before this is all done.
AI being able to code is going to be like what happened when construction workers started using power tools: now that one man can saw boards as fast as 5 others with handsaws, wouldn't we see a lot less demand for carpenters? What happened is that per-worker productivity went up because of the new tools and the construction materials and techniques they use were adapted to take advantage of that, there was still plenty of work, and we can build better things faster than before.
In software, imagine how much more effective engineers can be if the grunt work could be more automated. People loved autocomplete and smart IDE features and graphical debuggers because they made coding more productive. A lot of those things already do write some code. AI provides a much better version of that.
People whose only contribution to software is the grunt work of writing simple code might need to worry, but there is a lot more to working as a software engineer than grinding code. These AIs are also repeaters of existing solutions -- maybe they can solve simple problems that have pre-existing solutions in their training corpus, but an AI is not going to be able to create the next Redis or Kubernetes or AWS simply by recombining existing text.
Regarding layoffs:
Even after all the layoffs most companies still have more employees than they did in 2020. Many of the people being laid off today joined since then. They will get other jobs, maybe not in a few weeks like what used to be possible, but still. This is not like 2001 when entire companies were going out of business and laying off 100% of their employees.
A lot of the the American tech industry developed when interest rates were higher than they are now. What we had in the past decade was not normal, and in some ways it was pretty crazy -- investors didn't care if companies were sustainably operated, and now they do, and that's good for the long-term health of the industry.
Tech is not immune from the business cycle, because nothing really is, but this really is not as bad as previous downturns. Even if it gets worse before it gets better, the tech industry is fundamentally strong and will handle it.
New industries will have to spawn from generative AI for there to be a net positive. Most IT and tech jobs are lower level coding positions. This will all but eliminate these roles. SWEs especially top ones will likely be safe. But that doesn't solve the societal problem.
Regarding layoffs - we've barely touched the surface. We haven't even entered recession yet, and a financial crisis looms. Most are on hiring freeze now and just in the last 2 weeks both meta and amazon slashed additional jobs. More will be coming. The industry won't completely collapse because it's a mature industry now - FAANGs are now like Coke. Blue chip. This says nothing about its workforce though - there's nothing these companies would love more than to be able to reduce the cost of their software devs.
> Most IT and tech jobs are lower level coding positions.
I don't really buy that. It's true that most positions are IC positions, i.e. not managers, but quite a lot of them require domain knowledge and human intervention in edge cases which can't be handled by automation. If automation could solve all the problems, why are so many people oncall?
> I don't really buy that. It's true that most positions are IC positions, i.e. not managers, but quite a lot of them require domain knowledge and human intervention in edge cases which can't be handled by automation. If automation could solve all the problems, why are so many people oncall?
I don't mean IC vs manager. In any case, at my company our support staff has been reduced by 75%. In my previous life as a mechanical engineer, I've seen control systems replace 90% of powerplant staff. Also, generative AI just became a thing - because SWEs can be more efficient, you simply need less, UNLESS there is growth or a new market emerges (certainly possible), in any case millions will be left behind, just as what happened in the rust belt when manufacturing collapsed.
In any case, I hope you're right and I'm wrong :)
Designing large coherent systems for a business use case is hard. I don't think ChatGPT will ever manage that.
Plus let's be honest, the technical problems are the tip of the iceberg for software architecture. If an AI ever manages to convince my director to pay for things I'd be happy for the help.
High bar standardized exam on fundamentals of CompSci, which waives every whiteboarding/leetcode interview. It sort of exists today, if you have a CompSci degree from reputable college, but this way people can get the certificate without the formal education, just pass the exam. It's ok if it's difficult.
Why would software buck the trend?
For starters guilds tend to have progression by merit, requiring an apprentice prove they are competent enough to be considered a journeyman.
And you know … not wanting to be exploited… healthcare sounds nice… ( on this point, I’d like to point out that as an Australian software engineer, I long ago resolved to never start a company in America because of how insane healthcare in America is. I can understand the guns, the polarised politics and all the rest of the things that make America what it is… but healthcare is just so fucking insane that i haven’t even seriously considered taking a holiday there to see the museums that have been on my bucket list for half my life… the idea of starting a business there is just an immediate non starter… I’ll take US cash and setup a holding corp if they demand US incorporation and employ people elsewhere… so having a guild where healthcare was provided would make American developers more competitive in the job market)
About the US healthcare expenses: When you travel on holiday, you can buy pretty reasonable travel insurance. For example (no shilling): You can get one week of healthcare coverage from World Nomads for 130 AUD. Not so bad.
In tech, a union/guild is massive hamper on efficiency and control. Tech will quickly be outsourced to other places. It has become easier and more possible to outsource to other countries now (English is becoming more common, and education has improved in third-world countries). This will accelerate that.
And this is, BTW, applicable through the whole range. Just check Intel market capitalization, and guess what? It's now smaller then AMD, and 6x times smaller then NVidia. The reason: top management, they failed on AI, graphics, they failed on Cloud. Yes, they did something, not enough.
On goes my Tin Foil Hat: So, SVB failed due to a Bank Run by rich people who mainly own their business. Coincidence???
I know people in retail, right now they are job hopping because those wages have risen a lot compared to Tech. Granted, those wages are not good at all, but some are now able to put a little away instead of living on those future payday loans.
Most people let go in Tech, seems there is plenty of work out there anyway.
edit: typos
Why wait until 2023? Why do it after hiring at such a rate that you effectively increased your company's headcount by 50%+ in the last 2 years? What events are currently happening that would allow for this to happen?
You can pretend like you have a standing for your theory all you want, but it's all nonsense compared to the simple fact that Powell and Yellen are here to force a recession.
Then, what happens when the stock price doubles over two years and a significant fraction of the compensation is pegged to the stock price? Compensation grows too. And when compensation grows they get more applicants, I'd imagine. It's not like they had been getting few before but their hiring pipeline had been set up for the old rate of applicants, if this suddenly grew, they'd naturally get more hires. Especially considering that the additional applicants come from a cohort that had been compensated well enough to resist the pre-stock doubling comp numbers.
When the headcount had hit backstops, some hard headcount limits they likely have had, only then they realized how much did they hire and now react to this by doing layoffs and, probably, revising their HR policies.
My only idea so far is to accummulate as much as I can and not get into long term debt.
If I lost my job today, I estimate I could live ok without a job for about 2 years in my worst forecast inflation (in UK terms, something like 15%)
It seems there is plenty of well paid work though (again UK reality).
Are there any known ways to counter attack an artificially induced recession? Join a union and fight, perhaps?
I've been wondering this. I've seen lots of chatter about a retreating job market in the US, but here in London I'm still getting daily recruiter emails and LinkedIn requests. I could be wrong, but it doesn't feel like it's slowed down much here.
You can hedge for recessions. If you think the central banks are blowing stuff up and the economy is going to go into a recession putting capital into government bonds like TLT is a flight to safety trade. The reasoning is if a recession comes then the central banks will have to lower rates and money will come pouring in from risky investments and from savings accounts.
I think all recessions are artificially induced since the creation of the fed.
Headline from decemeber and I checked tlt and its near top of etf inflows ytd.
TLT saw its second-largest inflow ever, with a gain of $1.5 billion, Bloomberg reported.
2008 was probably the Fed waiting too long to decrease rates (because of the meme that housing was a bubble, and failing to notice the spillover from super high price areas, due to that the housing stock is missing millions of units)
microeconomics works.
to assume that there is a big effort to fight labor implies things that seem to be simply not true.
what's more likely is that both the wage gains and the inflation are caused by the same thing(s), covid: stimulus, supply chain shocks, missing millions from the labor force coupled with historically low immigration rates (of course due to administrative limits).
Come again? What is this supposed to mean?
Some idiot (Musk) decided to axe 90% of workers, and the company hasn't completely evaporated (Twitter). Investors; therefore, are jumping on the signal that a bunch of capital is allocated to non-productive work.
Therefore, Welch it, trim the fat, give me back my money so I can stop being a source of welfare for techies, and start pouring money into something interesting.
By contrast I couldn’t Netflix to stop buffering last night and the last I heard they haven’t had really any layoffs.
I thought maybe 10b was what it was worth. And he could have gotten out of it by paying a $1 billion cancel fee, something like that. It appeared his ego prevented him from considering that. But it all goes back to him signing a terrible agreement in the first place.
I'm not sure why people are still repeating that. No, he couldn't, that fee would have been due if external influence would have prevented him from completing the transaction (e.g. the government banning the sale somehow).
I'm pretty sure that's you and not Netflix.
> Etymologists can find no firm evidence that the verb welsh, meaning "to swindle a person by not paying a debt" or "to fail to fulfill an obligation," is derived from Welsh, the people of Wales."
Besides, Occam's razor applies. The term was coined in England, which is adjacent to Wales and historically has a degree of anti Wales sentiment.
Where are any alternative etymologies? There are none.
The article opens:
> Since the start of 2023, more than 150,000 people have been laid off at tech companies, large and small. That’s a staggering number of people who have been put out of work.
Who says those people have been put out of work? There are lots of startups that have wanted to hire engineers that couldn't because the FAMAG paycheck money firehose made it nigh impossible.
These people are mostly not going to be out of work. Most of them will still be earning way more than almost anyone in the country.
This is a good thing for startups, as now the (frankly anticompetitive) big tech hiring practices are getting rolled back to sane levels.
Look, we can argue about whether big tech salaries are a good or bad thing, but calling paying people more than your competitors, an anticompetitive practice is absolutely absurd. If anything it’s the most competitive thing a company could do to hire.
The... the people who fired them? They made them stop working. Whether they find somewhere else to work doesn't undo that fact. And I don't think you should be so quick to assume that all of them will be just fine. Give it five years and then see how everyone feels about it.
> This is a good thing for startups
Incredibly so what. I can picture a wonderful world without startups I cannot imagine one without workers. Startups have "disrupted" a lot of the stability out of the world to the benefit of almost no one. They have contributed almost nothing positive for at least a decade now and it's not because of a shortage of workers.
and how do React devs help a battery startup make better batteries?
As stock price goes down, they are incentivized to either pledge more stock, have their collateral liquidated, or take actions to move the stock price back up.
why are tech companies laying people off?
because they can
a company can grow profits by moving the top line up or the bottom line down
if they can't move the top line up, they will move the bottom line down