All the Major Tech Layoffs in 2024 So Far
visualcapitalist.com
visualcapitalist.com
1) Rapid rise in interest rates .. affects funding available to startups as well as makes corporate R&D more expensive relative to the payoff
2) Overhiring during covid likely led to a degradation in standards and a pile up of warm bodies at the largest firms (I say likely because I don't think my org was able to hire on net. We kept getting outbid for candidates and lost people to attrition). Even if this is a perception in the leadership and not a reality, it will lead to a cull.
3) Consumer demand for consumer electronics, computer gear and generally Internet services has fallen compared to the covid bubble. A lot of weird things were going on with respect to both increase demand and constrain supply back in those days. Whiplash effect in supply chains is being studied by academics today.
4) Changes in the US tax code for how software dev costs are attributed. I don't fully understand this but seems pretty plausible.
5) I think the leaders don't see how AI can make them money yet ... the obvious thing is it can reduce costs by trying out AI in their processes. This is all very expensive so perhaps the layoffs creates room for investments in the that direction.
All of these are significant headwinds. Am I missing any?
Additionally, January is the end of the fiscal year. Companies want to make cuts to their budget before February.
I've been seeing a lot of action in terms of recruiting outreach however. There seem to be a lot of very small startups getting created with a different financial attitude, eg trying to focus more on balancing profitability with growth. Rough time to be a late stage start up that just spent the last 8-10 years collecting debt and losing money on every new user. Supposedly the fed is going to cut rates at some point this year, so maybe that changes the calculus here eventually.
When the VP has about a thousand engineers recursively reporting up to them, how are they supposed to be able to decide who stays and who goes. We were told that the layoffs weren't performance related, but at that level of distance what useful signals are there outside of the performance rating?
Musk took a baby step in the direction of free speech, and immediately the order went out for major corporations to stage an advertising boycott.
Gimme a break...
Whatever this is in the direction of it certainly isn't a baby step.
Every large company that handles IT as a cost-center has a host of zombie projects they believe are still well, but actually are understaffed/funded, and will eventually fail unexpectedly. When the failure is perceived, the usual decision is to start a rewrite, and have both an old, unmaintainable product and a recent product that isn't fully-featured yet.
> and can get away with far fewer employees
I can't tell whether Twitter was really overstaffed or not, but I don't agree with people who use "see, twitter.com is still stable now" as a proof that the company was overstaffed before layoff. For instance, the stability could have been earlier investment in reliability engineering paying off. Cutting features and reducing changes also improves stability, but that may not be a good thing in the long run.
Can the company get away with it? Possible.
Can you elaborate on this point? Does this mean companies can’t afford software developers?
https://www.eisneramper.com/insights/tax/impact-174-software...
In short, you used to be able to deduct the entirety of an SWE R&D costs in the year it was paid, but now you must amortize it, like you would with machinery. That means that some companies are incurring "gains" that must be taxed, whereas before they wouldn't for that year.
1, 2, 4, 3, 5
Rates rule everything around you. Macro.
Hiring standards absolutely went out the door. I remember being on interview panels in 2020-2021 and it was - more open roles, less candidates per role, higher fill rate per role, fewer interview rounds per role.
Tax code seems to be a big factor and being called out by journalists in the know. It's also telling that FAANGs are winding down / shrinking their more "moonshot" and "researchy" areas that have no real products or high staff to actual product ratios.
I think 3&5 are much lesser impact but certainly there.
I sure wish I had that experience. I went some 6 rounds at my pre-COVID job and when layoffs hits I was 4 rounds in with 3 other companies before I accepted my next job (which was 3 rounds, but I had a referral from a very early employee)
now I'm laid off again and it's still 4-5 rounds, but less vibes on if that even leads to an offer. I went 5 rounds with one studio and then they ghosted me for 3 months. Unthinkable in 2022.
Fortunately, this maybe reverting...
https://waysandmeans.house.gov/with-bipartisan-vote-ways-and...
Firstly, citation?
Secondly, what does this actually mean? More people using existing online services means infrastructure scalability, surely, not generally "we need to hire more people across the board"?
(edited to fix formatting)
From what I saw, the hiring was driven more by an influx of cash than an actual need to respond to business needs. Companies began hiring much too early during the pandemic response to have down it based on seeing an increase in use and analyzing where their resource bottlenecks were.
The government dumped new money into the financial systems and investors moved funds to more heavily invest in tech assuming that the industry would be less effected by lockdowns and would see more benefit from work from home, distancing, etc.
tl;dr; They did over hire, but for all the wrong reasons. Balance sheets and new money.
Later, as constraints change, you might find that you have picked up a conflict between the constraints and your current business approach and need to make an adjustment (or delay a while and hope things improve).
I think it’s not that different from people upgrading their house, car, and travel as they make more income (“lifestyle creep”). What you used to drive and where you used to live obviously sufficed, but was constrained by your income. When that constraint relaxed, you adjusted your consumption to reflect that.
The problem is funding but I'm sure reasonable business plans will find seed money from more traditional investors instead of VC gamblers. Maybe even self-finance with clients.
The layoffs created thousands of solopreneurs, I'm expecting them (us?) to create the next generation of projects to take pieces of big tech.