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Comment by hn_throwaway_99 | Hacker News Reader

The thing I find interesting from an anecdotal perspective: the second half of 2022 and early 2023 were pretty brutal, with loads of layoffs popping up in my LinkedIn feed. However, at least for software engineers, things seemed to at least stabilize a bit around late spring or so of last year - it even looked a bit like some companies cut too deep, and I saw a bunch of my engineering colleagues find new jobs.

Since the start of this year, though, things seem to have soured. I've seen a bunch of fresh layoff announcements, and these ones genuinely surprised me because they were from companies I thought were doing well.

Just curious if anyone else has noticed a similar pattern.

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Don't know about the late spring rebound, but from my perspective as a freelance mercenary, the downturn around November 2022 was very abrupt. Almost over night I went from fighting off work with a stick to absolute crickets. Not only that, but existing long-time clients who were historically easy to work with suddenly became very difficult and started to ask pointed questions about my output.

I'm still struggling to find an explanation short of some cosmic shift in the collective unconscious.

> I'm still struggling to find an explanation short of some cosmic shift in the collective unconscious.

The end of free money and the rise in interest rates is essentially the root cause of all of this. Nov 2022 coincides exactly with when it became apparent that inflation wasn't just "transient" and the fed would need to keep rates high for an extended period to fight inflation. When that happens companies will pretty immediately pivot from a "grow at all costs" ethos to a "show your profits" mindset. Combine that with a general hangover from unrealistic, overly-hyped expectations during the pandemic ("people will spend every waking second online!!!"), and it makes sense that the change in sentiment was so abrupt.

> Nov 2022 coincides exactly with when it became apparent that inflation wasn't just "transient"

Have any sources on this I could check out? And yes, the pandemic was an absurd gold rush that was bound to crash at some point. It's just not clear to me that the cause was only about interest rates. Seems more like some confluence of chaotic factors.

Start with just a simple graph of the feds fund rate, https://fred.stlouisfed.org/series/FEDFUNDS. Rates were going up before then, but it's right about Sept/Oct when they reached a level that was a ~15 year high.

Rates weren't the only factor (and, of course, the increase in rates was caused by the inflation that was a result of both supply shocks and the government paying people a lot of money to do nothing), but I think they were the prime factor as to why it felt like things switched on a dime so quickly, because it was the forcing function that essentially caused all projects that could no longer compete with 5% t-bills to immediately get killed.

Yeah you look to be right about Sep-Nov, wow.

> government paying people a lot of money to do nothing

And a lot of money to do something. I later found out that a lot of my initial Covid-era clients were paying me from PPP loans.

Most likely a cascading effect of many factors: the longer downturn of the US economy, tax rate keeping high at least for another year or two and most importantly, I believe is the effect of Section 174 [1]

https://newsletter.pragmaticengineer.com/p/the-pulse-75

Of course, they're dropping like flies and it seems like I see a new one on my LinkedIn feed daily. For what it's worth, it's generally not your CS/EE grads working with industrial controllers that are hard up for work, and that shouldn't come as a surprise to anyone.

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