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Comment by brokencode | Hacker News Reader

One of the most surprising things to me during the pandemic was the dramatic hiring spree that almost every major tech company engaged in at the same time. I was getting pings from different recruiters multiple times a month during this time, and I’m sure others were getting many more.

Today’s layoffs are a direct result of the irrational exuberance of that era.

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Can someone explain this systemic hiring phenomena? A pandemic hits and every corporation thinks that's the time to hire and scale by gross multipliers? Why? Whose idea was this? How did it catch on everywhere?

The lockdowns which came about as a pandemic response resulted in a huge shift in spending - many companies were suddenly flush with cash, and many of them decided to use that cash to invest in their business, by hiring engineers.

With more engineers you could make more babies per month or something.

A lot of companies saw unexpected spikes in revenue and wanted to strike while the iron was hot. The impulse was rational but the scale of the response was completely out of proportion with reality. But it's not like we saw hiring sprees in airlines and hotel resorts. We saw sprees in industries which benefitted from people staying at home and communicating digitally (like Discord).

A lot of companies also saw spikes in revenue, raised money from investors at sweet terms based on that revenue growth (despite it being unsustainable), and then needed to spend that money to show they were going to use it to keep the good times rolling.

Stock market was climbing and everyone thought digital was going to be permanently the new default, so companies tried to move quickly to land grab all this potential market.

Federal pandemic money plus we were still at super-low interest rates.

Now the Federal spigot has dried up (well, is back to normal) and interest rates are higher.

Not every corporation, if I remember correctly Apple was quite restrained.

Investors want more growth and that translates to hiring more people to do more things.

Then it’s painful when more people slow things down because there wasn’t much process in place before the blitz hiring.

This isn’t a problem unique to engineering, you see it a lot with sales too. Leaders aren’t experienced or self reflected enough to work smarter.

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