Ask HN: Is the Market Recovering?
Hi, do you think the market for job seekers, Startup funding, is recovering? if not could you estimate when it will recover?
for me personally the job/funding market collapsed in maybe December of 2022.
In November I got ~10 inbound pings from credible recruiters or HR folks at credible shops a week, and that was typical of probably the last 5 or 10 years.
In December it was zero and has stayed zero until this month when I’ve had 2.
Outbound resumes and pinging the network was pretty much “I wish I could help you” all year until May/June and now conversations are starting to go somewhere at least in the early stages. The compensation packages people are talking are still like a quarter of what was typical a year ago if that.
So it seems like we’ve got a ways to go before the market starts operating with consistent price discovery, but I’m seeing the ice crack here and there.
You mean much less stock? I can't imagine a senior engineer getting a $50k in annual salary, only in the cash component.
I’m sort of L7/L8 with an ML infra focus in California and total cash a year ago seemed to be ~300-400k and now people are seeming to need to “call upstairs” to talk above 150. So maybe half-ish would be closer than the quarter-ish I threw out in my comment.
I was kind of factoring in inflation and that stock comp in a mature public company at a 30-40 PE is unlikely to hold up for 4 years.
That was probably an unsustainable bubble on the long run, inflation adjusted, unless you hold exceptionally rare skills that can't be replicated or taught. It was simply the result of a severely unbalanced market. I'm sure some people still make 400k+, but I'm also sure their performance and contribution is scrutinized quarterly and they are the first on the chopping block unless they hold internal political clout or are famous.
When I was a FAANG EM I was an L7, so like one below director.
The market will be what the market will be, there’s no absolute right and wrong, but it doesn’t seem totally crazy that someone leveled around there would make what a successful doctor or lawyer does.
I’m a childless bachelor so it’s not particularly important to me to hit those comp levels again, but as a general thing I think software engineers should be considered on par for a given experience as any other job that requires decades of intense practice to get really good at in a field where one’s employer is making a healthy profit.
Anyway, just letting you know that we’re out here.
I'm curious—how does this work? More responsibility ought to mean more compensation—what incentive is there to be a boss if you'll make the same as your reports?
I believe the theory is to avoid the Peter principle. If someone is promoted into a position for which they are not competent, then they can be transferred back to their old position without lowering their salary (since it’s been the same salary the whole time). I also think there’s some stuff about passion, grit, and drive that’s been imported from the private sector.
This seems extremely low for the US. I've had trouble in the past hiring good sr. engineers in the 150-200k range outside of a tech hub.
Are devs staying because they believe in what they do and are willing to take lower compensation?
Because I wouldn't go to work for a startup even for that much (which is over 2x my current salary). The instability and likelihood of toxic techbro culture (eg, "fast-paced work environment, with people passionate about what they do", aka "you'll be expected to work 80-100 hours a week"...) are just way too high.
I don't know if you're in US or Europe or somewhere else, but "2x my current salary", meaning you're around ~75-100k? In the US that's low for software aside from maybe early career or if you're working for some non-software-oriented company, from what I can tell now that salaries are starting to be publicly listed on more and more jobs.
You're probably doing yourself a disservice by at the very least not even exploring other options and sticking at one place out of comfort.
Just my 2 cents, you know your situation better than some rando on the internet.
Please, please try to remember that not only is Silicon Valley relatively small in terms of the total number of programmers (of whatever particular job title) it employs, it's also a massive outlier in terms of compensation.
Most places that programmers work don't offer equity of any kind, and $100k is still a high salary for many types of programming and tech work outside of SV.
I got some decent prospects post Dec 2022, but wasn't actually on the market until Dec where it was just dead, and of the few that do pop up, they money is way down, and the competition is high.
I applied to the Dutch equivalent of a SF scale-up, looking at promises of five figure incomes; I didn't get the job at the time (early / mid 2022), but if I did I would probably have been one of the wave of layoffs they had in Q4.
2021/2022 were insane here. Recruiters trying every angle to get your attention, companies doubling in size.
It feels like here (Ireland) though, the retreat was much less pronounced. It feels more like 2019/2020 than any kind of crash. I know people who have been laid off, they've found other jobs at comparable pay. I know people who've moved for more pay. _I've_ moved for significantly more pay and a more firm commitment to wfh.
There are some things that are unhealthy for sure. The market seems to have bifurcated between grads/juniors who are having a much harder time breaking in than previously, and mid level + who are basically unaffected. Possibly this will make its way up the ladder over time, but it basically started with the grad/junior market in 2020 before the interest rate increases.
One thing is many basically tried to encourage people to leave put them on performance plans, etc and do everything they could to avoid layoffs. So companies have been downsizing but not annoying any layoffs because they just worked people out instead.
I also, suspect there may be quite some way to go before it's all said and done.
juniors will be basically unhireable :/
But my fear is that what actually happens is that we see our mid-level and senior engineers get even more productive with the help of AI, to the point that juniors are seen as so comparatively unproductive as to not be worth the investment. With this job attrition moving up the experience ladder as AI improves.
that means positions are gonna be cut.
like IBM said they would
I doubt that startup funding will recover much until interest rates go down, as I think the general attitude right now is pretty conservative about investment. Probably this will recover early to mid ~2024, and definitely by 2025[1] depending on when the US Fed cuts interest rates.
[1]https://www.federalreserve.gov/monetarypolicy/files/fomcproj...
If you look at nasdaq around the dotcom crash it also had a fake bounce before the real crash. Past doesn't predict the future but also no reason we couldn't be in a fake bounce now.
> The size of any market correction is not something I'm qualified to comment on
The person above me said that it might still get much worse, basing that on a rather different situation. All I said is that I would not use this specific reference data for setting future expectations in the current situation
AI is having an impact in the markets, there is not question that ChatGPT inaugurates a new milestone even if at the end that AI is not so smart, it is very useful.
IMHO we, humans, are the bottleneck and slowing things down: matching a buyer with a seller is slow, it requires building trust and depends on culture. If you remove humans from some activities the economy will accelerate. That does not mean that the human race will be better as a whole but the money spped will rise and money will flow in the direction of removing humans when they could be replaced.
Then you have the true superstars of money burning, like the startups that distribute VC money to customers (e.g. Uber, but there's a ton more).
How?
Compared to today, no one was on the internet. Look up internet subscriber numbers from then.
There was no wifi.
There was no mobile data.
People were barely moving from dialup to high speed.
Cable modem was new. Adsl had just come out and was slow. Internet was not stable to be up and trusted all the time.
Businesses were not trusting their operations to SaaS.
E-commerce was tough, people didn’t trust credit cards online, and credit card processing was much harder to setup than today. There was nothing close to being as simple as Stripe. PayPal was it.
There were no huge social media networks, except for forums.
There was little to no advertising online, let alone advertising networks like today.
Discovery was an infant (Google was new), addressing markets was basic (little adtech).
For startup funding, if you are in AI it's fine. Otherwise better presenting with very good metrics and not with the pressing needs of raising money.
It's impossible to say when it will recover, but I'll echo the people in this thread that say "not this year".
Applying even with 4 years experience and good skill match has been a 100% rejection/ghosting rate across maybe a dozen+ job applications so far.
I agree with the sentiment about junior/entry level...everyone want a senior. Maybe I'm not looking at the insurance/bank/non-tech job boards and companies, maybe they have a few more junior/entry level positions. In startups and high-tech companies, 95% senior and above positions only.
I'm from the UK. I was looking for job in January. I have never seen the market so quiet. I found a role (contract), but according to recruiters I was quite lucky to do so.
It's picked up a lot since then in terms of total number of jobs, but I've noticed rates have significantly dropped from 2021 / 2022 levels. I'd say on average rates have dropped around 20% so a £500/day contract in early 2022 will now be around £400.
I've noticed certain sectors of the economy seem to be a little strong. Government, health care, AI and luxury goods / services have been a common theme among roles I've noticed.
In terms of when it will make a full recovery I have no idea. I think here in the UK things will only continue to get worse as rates continue to rise, the government is forced to continue to raise taxes on individuals and companies to fund its increasing levels spending, and the economy continues to slow as a result.
I'd give it at least a year to recovery fully, but it's hard to project too far out right now given AI trends. It's quite possible 2021-2022 was the best it was ever going to get for our profession.
People probably said the same in 2001 (after the dotcom bubble).
More generally, I think averages are extremely misleading; especially for job salaries. Salaries follow a power law. So maybe the average salary for new jobs is lower, the people in the top of the power law still sign 300k+ contracts. To see this, look at vacancies for well-known AI companies. You'll find listed ranges of 150k-350k. If you can bring the right skill-set, it doesn't matter what the state of the market is. (This way of thinking is also partially what made Buffett so rich. He buys great companies in financial crises. Does he care that the world seems to go down in flames? Not really. He just looks whether it's a great company for a good price because he knows that a great company is a great company regardless of the market.)
I think we should know before the end of this year.
The view seems to be right now this macro environment is very similar to what we had during 1940s, where we had persistent (with fluctuations but upward trend) inflations due to fiscal spendings (war in 1940s vs Covid this time).
By this theory, this is just a “pause” before inflation sticks again and shows a persistent outlook. BoE already acknowledged this.
Part of the issue is of course war in Europe causing energy and manufacturing crisis in EU that countries like Germany hasn’t recovered from and there is not much hope it will in near future. The other part is persistent fiscal spending, a big part of which is driven by debt servicing due to rising interest rate causing some kind of vicious cycle.
If you follow Fed speak, they are also more using cautious words like “pause” and not saying we are out of the woods yet.
Market is of course forward looking, bond market thinks there is not much Fed can go before breaking something as you can see in the spread of interest rate between 10Y vs 2/3Y.
I don’t think anyone really knows but Wage growth is persistent and productivity is clearly down. I bet the market will look much gloomier once the Q2 numbers start coming out and show margins are clearly down.
But in addition i noticed also a change in jobs for the few exceptions: Offers include either AI or much more traditional tech, more java / python, much less js. This is to be expected as VC money drying out leads to less new projects and more old and profitable businesses in relation. But also applications are handled differently. Before the pandemic i could nearly always go stright to a conversation with someone and talk about development and cultural fit, now there are probably so many applicants per role, that companies check for university degrees, obsess over CVs showing multiple projects with exact same tech and having worked at FAANG or at least big known successes. Also no part time or reduced time opporties have survived as far as i can tell. Also there are nearly always weird formalities that i did not have to deal with in the boom phase, such as requesting formal pdf cover letters explaining why you want to work for that specific company or having to record a video to proof you can talk on a camera, i even saw IQ assessment tests.
I dearly hope we go back to the good old times or i find a new niche.
Looking at "hard facts", the yield curve is in the "most inverted" position in a LONG time. I'd still be cautious.
In the near future I suspect any major growth in this sector will be around environmental problems, probably kicking off in earnest later this year, and fixing hilariously inefficient cloud deployments would probably count.
The simple fact though is a lot of people that had been in the software industry really weren’t cut out for it, and were in the way of those that are. We will be better off when they find their true calling making money elsewhere.
I think the toughest situation is for people entering the market for the first time.
In any case over here in Poland - a fairly popular outsourcing destination - FAANG have been hiring all this time.
Basically some jobs permanently moved to where employers can get away with paying 50-70% of what they used to.
Recruitment is also being increasingly outsourced - your standard corporate drone contracts are handled by people who don't speak the local language.
Job Seekers for tech: seeing lots of people on the market, and the companies that are hiring are not offering FAANG style comp packages.
Startup Funding: It's still slow, and VCs tend to be very cautious lack of easy money from Crypto + GPT uncertainty + SVB has thrown a wrench in things.
When will it recover: A few years for both. Comp got crazy, especially in big tech. It will take a while for generative AI to work iteself out.
To do what? What's the value proposition with AI these days? I have no clue because all I see is the hype.
As for the war I initially guessed 3-5 years, now I'm guessing 10. So I'm quite pessimistic about the near future.
I have no doubt that the collective west can easily bury Russia in terms of an arms industry economy (it's done it before), but this is a major retooling.
Time to learn to start writing software for drones/UAVs?
There's too much cost to the current Russian regime in letting a Ukraine that is not a direct client of theirs succeed and potentially thrive. It would have a domino effect and the Russian federation could disintegrate or at least the ruling elites there lose control and privilege. It does not matter to them if Russian quality of life suffers as long as Ukraine suffers more.
This doesn't mean that Ukraine will stop to get resources from West if war is over though. Ukraine needs a lot of help years and even decades after the war is over.
They have more than Ukraine which is entirely dependent on foreign aid and that's what matters.
Remember the US these days is an energy exporter. Russia is a competitor in this market. The intensification of hostilities with Russia in the 2010s coincide with the US switching from a net importer of energy to one that is beginning to export more than it uses: https://www.eia.gov/todayinenergy/images/2019.01.29/main.png
But more importantly, Russia is a rival in control of the middle east and Africa as well.
And bonus for the G7 as well if the US and Canada (whose energy companies are on the whole dominated by US capital anyways) can get a significant market for liquified natural gas and other export energy products into Europe now that the trade relationship with Russia is disrupted.
It is a bit unclear how a Republican administration would behave if it replaced Biden's. It depends a lot on which sector has the ear/control of the president at that point. Trump's administration seemed to be tangled up in the Russian energy sector in a way that made it conflicted (e.g. Rex Tillerson as secretary of state, etc.)
It's all a bit cynical. But at the same time, Ukraine also needs to be defended on principle from an aggressive neighbour.
[1]: https://www.statista.com/statistics/1188294/monthly-foreign-....
[2]: https://en.wikipedia.org/wiki/Federal_budget_of_Russia#2020-...
0. https://www.reuters.com/article/ukraine-crisis-russia-reserv...
The question is how long Ukrainian morale holds up and how long they can keep recruiting and training troops.
Also Turkey's recent moves don't bode well for Putin's regime. It's clearly asserting itself as the power in the Black Sea and likely soon in and around Syria and the Caucasus as well, attempting to displace Russian power in the regions where it has been dominant. It's likely we will soon see Turkish navy escorting Ukrainian grain out of the Black Sea without Russia's agreement or cooperation. Whatever Erdogan and Zelensky discussed in private last week, it's culminated in some significant shifts that are very negative for both Putin and Assad.
That is also about how much the US spent on Afghanistan per year and that was sustained for over 20 years.
The fed had to create that $100Bn to loan it to the US govt. The US government has to pay going interest rates for debt.
It's a very very expensive choice for something that is not our war.
It's something like $1200 per tax payer[1]. I do not support us funding Ukraine's war to the tune of $1200, personally.
[1] - https://taxfoundation.org/publications/latest-federal-income... ~50% of people even work, and 99% of the taxes paid are by the top 50% of earners. ~350M ppl in US --> $100Bn / (350M ppl * 50% work * 50% pay) ~= $1200
And at the same time European elites are clearly rattled and threatened by a war on their borders, so are seeking enhanced security. And I'm sure quite tempted by the prospects of integrating Ukraine's (cheap) labour force and agriculture exports into the European market & trade area.
Because you know - the share of taxes paid also has a distribution within the upper 50 percent. Using that fun table you posted, let's see how 100b splits across the following 3 segments:
Top 5% - [95,100) 62 billion
Upper 45 - [50,95) 35 billion
Bottom 50: - [0,50) 3 billion
If you're in the upper 45 - I can see how $1200 would start to hurt. But that's not what the math says. Which is that there are 157.5m of you pooling together for a 35b share of the tab. Which comes out to $222.22 per head.
Is that what you're so indignant about?
Fun fact is that the US made something like $4billion/month last year from gas exports to the EU. Significantly more than previously due to increased demand and increased prices caused by the ongoing Ukraine war. That alone covers half the cost of the aid provided last year. I suspect if you count everything the US aid to Ukraine has already been a net positive for the US economy in terms of ROI.
Typically it's a numerical value for the goods & services provided. This means the USG is paying Americans to do stuff for Ukraine which increases demand for US stuff which helps the US economy.
A significant portion of the help wasn't dollars, but obsolete weapons and ammo from the army's stockpiles, that US gave Ukraine instead of basically disposing of it locally.
I could be massively wrong though, there’s all kinds of different scenarios. Ukraine might be able to win entirely once they’ve got jets. Things might kick off elsewhere in the world e.g Taiwan. There could be some calamity at one of the nuclear power plants etc. There’s any number of black swans that could influence events.
The Wagner incident a couple weeks ago seems to show there's no alternative to the Putin regime that isn't worse. Prigozhin got on the blowhorn and talked about the action in Ukraine in very negative terms, but mainly he seemed to want to execute it more efficiently (and probably brutally), he never truly questioned the underlying rationale of it.
Ethno-Nationalism is one hell of a drug, it's omnipresent in that region, and it seems like even the "opposition" in Russia is hyper nationalist. Worse, a defeated Russia has extremely poor economic prospects. In many ways they have "nothing to lose" by just grinding on and on.
There doesn't seem to be a real opposition in Russia that isn't ideologically bought into a pro-war position.
Yes, because Wagner are mercenaries. They don't give a flying fuck about politics, they're there to do a job and get paid.
The actual Russian Army has literally resorted to conscripting randomers and criminals to try and boost troop numbers - I'm not convinced many on the Russian side of the front line are there for ideological reasons. From what I've read, the people who believe in the Kremlin line are basically the Russian boomers and older who are going to die off in substantial numbers over the next decade. And Russia is probably going to get substantially poorer over the next decade as the world accelerates the transition over to green energy and the brain drain continues to neighbouring countries.
Once Putin is dead, the head of the snake is cut off and there'll be a period of chaos where all the potential successors start playing their hands to try and seize power. Once someone seizes the mantle, they'll have a much easier time of things if they're focussed on consolidating power internally rather than trying to do that and simultaneously manage a war, so I reckon it will be called off pretty quickly.