Hacker News Reader

Comment by Solvency | Hacker News Reader

Between Discord, Twitch, Amazon+Prime, and Google... what's the layoff pattern here? Are we talking about social community teams? Streaming/networking engineers? Or is there no connective thread between these four companies?

Are there other corporate layoffs that round out this intrigue?

View on HN

Not saying this is the reason at all, but personally speaking sell me something that is not a subscription based service. I will make a handful of exceptions but not more. All these companies relying on Nitro, Prime, Premium, Plus as if anyone wants to add yet another subscription to their bill. Meanwhile companies like Apple and Nvidia are releasing new high-end products that I can buy and not think about.

Apple sells six or seven different subscription services including tv, music, photo storage, and fitness.

They obviously don't think that selling subscriptions is a bad idea.

"Not saying this is the reason at all"

But also, Apple is not relying on Fitness+ to survive unlike Discord with Nitro.

The connective thread is that tech growth has slowed/stopped and Wall Street is looking to make cuts, because salaries are expensive, and shit, if they have the option between more expenses and less expenses, they will keep taking 'less expenses', until it clearly and incontroversially affects the bottom line.

Right but where are Atlassian's layoffs, Asana, or any of the other hundreds of "lower" tier tech companies? It's unusual that they're all skating by, to me.

Atlassian had layoffs just last year.

The bigger companies used their cash during the pandemic to go on a hiring spree, both bloating their headcount and their overall salaries.

The smaller/lower tier companies did not have the cash to compete with this, and now do not have as much to fix.

Also the layoffs in smaller companies just aren't big news.

There's micro-scale reasons for why particular firms aren't affected by this, but that gets into the weeds of particular companies' roadmaps and balance sheets.

The macro-scale of 2010-2020 was 'growth, growth, growth', the macro-scale of 2020-2022 was 'hire, hire, hire', and the macro-scale of 2023 and 2024 is 'freezes, layoffs, cuts'.

Just google it,

Atlassian, Asana all did layoffs in late 22/23

>Today marks a very hard day in our 20-year history. We have made the difficult decision to rebalance our team to better position Atlassian for the long term, meaning we will be saying goodbye to around 500 Atlassians, or 5% of our employees.

https://www.atlassian.com/blog/announcements/atlassian-team-...

It's an "and me too" business fad despite profits being already at record levels. The entire point is to suppress tech worker wages if not by explicitly-agreed conspiracy then by independently-stochastic layoffs.[0]

0. https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_L...

Edit: One way out for both stability and fair compensation is worker-owned co-ops. Unionizing within publicly-traded or private-equity-owned corporations is still building a sandcastle in the tidal zone.

It's more about inflation. The Fed has stated that they don't get those low interest rates back until they fire a lot of people and drive up unemployment.

EDIT: from the Chair himself

> We’re never going to say that there are too many people working, but the real point is this: Inflation—what we hear from people when we meet with them is that they really are suffering from inflation. And if we want to set ourselves up, really light the way to another period of a very strong labor market, we have got to get inflation behind us. I wish there were a painless way to do that. There isn’t. So, what we need to do is get rates up to the point where we’re putting meaningful downward pressure on inflation, and that’s what we’re doing.

https://www.federalreserve.gov/mediacenter/files/FOMCprescon...

This is hardly just his opinion either and has been pretty widely covered across the media.

https://time.com/6253699/federal-reserve-inflation-interest-...

https://www.cnn.com/2022/09/07/perspectives/inflation-jobs-r...

https://www.forbes.com/sites/dereksaul/2022/10/12/does-the-f...

https://www.businessinsider.com/jerome-powell-fed-jobs-unemp...

My guess is that these were supposed to happen in late 2023 but didn't due to the holiday season. So now almost three months of layoffs are happening back to back.

This might be wishful thinking, but looking at their size, these are fairly normal layoffs, and the worst part is over. (Remember 25% Meta and Google layoffs )

The only suggestion I've seen that would make some sense is Section 174: https://newsletter.pragmaticengineer.com/p/the-pulse-75

Very insightful - I didn't know about Section 174.

I feel sorry for the overseas labour that a US company startup would be now considering stopping for tax reasons. But I suppose they needed that 15 year amortisation clause (compared to 5 years for a US employee) to stop a flight-to-overseas labour effect of Section 174 (which is presumably 1/3 cheaper).

The framing I see it as is by comparison with the Gold Rush. In those times some made it big (finding Gold) but most of the (reliable) money was made by selling pick-axes.

Here the US is moving from a model where the successful startups cash out resulting in everyone getting paid: e.g. 40% California tax income comes from exits, to being one where the US government takes smaller cuts from medium to failing startups (due to gaining tax revenue of those companies making revenue in their first few years). The drawback is that fewer startups incubate long enough to have a chance of cashing out big.

Note also paying tax as an employee has a better fiscal multiplier to the economy than the owners paying a tax bill. (You buy products and services with your salary more so than wealthy owners on a proportionate basis.)

I find this all quite surprising for the US government, and US innovation culture.

Salesforce just announced a hiring freeze and word on the street is that in the next 30 days they are going to be cutting staff.

Where have you heard about the layoff rumors?

Word on the street is Angie's List is quietly firing. They already let go of their contractors and now they're looking at their employees.

R&D mostly getting the axe. Growth's off the table this year. Outside the AI bubble, companies are soley focused on paying down debt and remaining profitable.

People who make too much money for their role, or entire divisions that are wildly unprofitable

The layoff pattern is rising interest rates.

Intrigue? The economy is teetering on recession. These companies understand macro trends better than anyone, and can plainly see what is coming. Now the play is to protect the war chests they have amassed to weather the storm.

If the companies understood macro trends they would not have hired just to fire everyone later when their growth plans didn't correspond to reality.

Turns out macro trends change based on circumstances outside the control of any one company.

Which is the point: large companies do not have more control over that than me and you, nor do they interpret them better, which is the same reason hedge funds generally trail index funds.

Hedge funds trail index funds? What a hilariously and confidently incorrect take.

I guess that's why hedge fund managers have billions in assets and are paid millions of dollars, to deliver sub-market returns. Yep, makes total sense.

Reply on news.ycombinator.com