Tech industry saw 46,000 layoffs in the first two months of 2024
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- The zero interest economy ended due to dollar losing its uncontested foreign exchange currency position.
- Now neither Fed nor private banks can print dollars and lend them with low or zero interest to constantly infuse the economy with money.
- Fed raised interest rates to stem inflation and also (in their words) to bring down wages.
- This caused the cash-awash economy that rode on the stock market and the inflated values of stocks and startups valued over 'growth' and 'potential future revenue' to end.
- Capital started avoiding the earlier paradigm of dunking endless money on startups and stock market and started going for bonds with high interest rates.
- Hundreds of overvalued startups and companies with over-bloated stock valuations started doing layoffs to shore up the falling stock prices.
- Copycat layoffs cascaded - MBAs pushed the boards to do what everyone else was doing - monkey see, monkey do.
- ~450,000 highly qualified, educated, experienced individuals were laid off to make majority shareholders happy, at the risk of US tech sector losing its steam - shareholder comes first, everyone including the society can go to hell
Disastrous trend for both US tech industry, the US society and its prospects in general. But hey - the majority investors and investment funds will be bloating their unusable hoards of numeric wealth even more...
[1] https://qubit-labs.com/how-many-programmers-in-the-world/
https://www.wired.com/story/tech-layoffs-are-feeding-a-new-s...
This is the dumbest thing about the destructiveness of capitalism: In its quest for ever-increasing profits, it even destroys its own business for short term profit.
>According to the theory, the business cycle unfolds in the following way: low interest rates tend to stimulate borrowing, which lead to an increase in capital spending funded by newly issued bank credit. Proponents hold that a credit-sourced boom results in widespread malinvestment. A correction or credit crunch, commonly called a "recession" or "bust", occurs when the credit creation has run its course. The money supply then contracts (or its growth slows), causing a curative recession and eventually allowing resources to be reallocated back towards their former uses.
Not exactly. That theory relies on actual economic theories that were conceived for normal situations. (and even at that, most of the economics logic is still based on just guesses and truisms).
But the dollar situation was far beyond anything anyone could imagine: The US kept forcing the dollar to be used in foreign trade, making the dollar de facto reserve currency. This meant that ANY kind of economic activity anywhere in the world was already monetized by the US through the dollar. Random country A prospers, the US prints dollars without suffering inflation thanks to the dollars that was being used in global trade.
So in a way, the US was literally monetizing the entire world whether the rest of the world wanted it or not. Its an incredible paradigm that was not seen before. The overbloated US military existed for that purpose: To bash the heads of small countries that dared dump the dollar - Iraq, Libya et al are examples of this. Saddam started using Eu to sell Iraqi oil, Gaddafi was talking about doing either that or creating an African currency. It worked for a long while.
But what the US did at the start of the Ukraine war ended this paradigm. Seeing how Russia, a superpower, got their dollar holdings stolen by the US made all countries think that nobody would be safe as long as they relied exclusively on the dollar: One foreign policy dispute one day and boom. So they started dumping the dollar and moving to their own currencies or Yuan.
And the incredible and never-before-seen paradigm of a country being able to monetize the entire world ended. The sanctions and the theft of Russian assets were the dumbest things that the US elite in control of their administration did in its history. They even went after the assets of individual Russians who weren't even close to the Russian government and its governing elite - which immediately told every single rich person in the world that they would never be safe with the dollar regardless of their political positions and affiliations. So the dollar exodus started.
Among other dumb things that the US elites did in recent years is banning China from certain technology products and literally pushing them to develop their competitors - without China having to break WTO rules too, as they were banned from buying those products legitimately.
With a governing elite like that, the US does not need an enemy.
I've heard some people say that it's mostly a lot of churn right now - layoffs make the headlines, but there's a healthy amount of hiring going on at the same time.
I don't really know the extent, this is a genuine question.
I'm reading that there are actually more jobs being created than the layoffs are producing people looking for jobs, or, basically, like op said, layoffs make news, but the dozens of small companies hiring 1-2 people don't make the news.
So, it should still be 'ok' to find a job.
But, antidotally, all I hear is how hard it is, sending 100's of applications out and getting 1 or 2 calls.
So which is it? Is it just big correction in skills? There are jobs, but not for what people know? What is in demand?
As SRE type, I'm dealing with a ton more legacy conversion and shoring up existing systems. Still high demand for Kubernetes and Containerization but huge drop off in other stuff. WASM has almost entirely disappeared for any conversations I've been in.
I remember the dot com crash.
The Valley and the greater Boston area got flooded with out-of-work engineers. The secondary cities still had interesting openings if you knew where to look. During the boom times, lots of interesting companies were starved for talent. When the downturn came, they started filling positions and moving ahead on interesting projects.
Look at some of the remote teams closely. Some of them are up to neat stuff, or they are just looking for the right person to open up new opportunities.
Anecdotally, my software dev friends who are unemployed right now are having trouble getting hired, compared to a few years ago where they were turning down interviews weekly.
[1] https://www.hiringlab.org/2024/02/20/labor-market-update-tec...
My current employer (also an ESOP) snatched me up aggressively as I was over qualified for their budgeted salary. It has been awesome for both of us. I got more stability and, for once, interesting work and they got someone who could drive a new product from scratch. My contributions are really starting to punch high and win us new business, so my pay should bump back up soon. I took a chance and it seems to be paying off. My health definitely improved. I recently received my last dividend check from the S-Corp and it was not pretty--I was already bitching when it was twice as much as this last one. So their business is still on a decline despite being, traditionally, a first call from clients.
If you have those 3 things in balance relative to one another, you probably won't have too much trouble finding a job. If any one of those variables are out of whack, you'll have a hard time.
Companies are definitely still hiring. They just aren't throwing offers at everyone. More selective, and salaries/comp is down due to less companies competing for the same candidate. These issues are worse for juniors (companies less willing to invest in career training/development).
I've been having significantly more interviews and recruiters contacting me (and following up) this year.
Tech layoffs highest since dot-com crash
I was very curious about this and I've been looking into this to better understand for myself what is going and why it's happening. Most likely it's a combination of things, and 174 is probably not the biggest factor:
- ZIRP (0% interest rates) is gone, investors can get an easy 5% from bonds/money market, why put money into risky assets like startups
- Investment money is FOMO-ing into AI rather than conventional non-AI startups
- Post ZIRP investor mentality switched incredibly quickly from grow-grow-grow, to show us your revenue and profits, get fit (lean, reduce employee count, operating expenses)
- Section 174 probably plays some role, but I haven't seen it mentioned at all by VC-types and financial news sources online. I've only seen it mentioned a couple of times on HN. But I'm sample size 1 and I don't go on twitter, so maybe I'm missing out on some discussions where 174 is discussed
In the end it is about messaging and what action sells at the moment.
There are people who have jobs and people who don't. The people who have talent, who love what they do will stay. The dead wood, the folks who are in it just for the job, for cash will move on (they already are).
The smart people, stop looking and start building. They do what they have to, to survive (shit jobs) and double down on side projects.
Some talent will move on, but the next crop of startups is already brewing in bored nerds living rooms across the bay. Good luck folks there's money on the table, and you dont need to run to the VC's any more.
I wrote the below in 2006. <https://slashdot.org/comments.pl?sid=178846&cid=14824754>
>I moved from NYC to the Palo Alto area in May 2000. That's right, just one month after the start of the long stock-market collapse and two months after the NASDAQ's peak, although of course no one knew these things at the time. I thus got to experience both the highs (insane traffic on 101, Sand Hill Road absolutely packed for two hours each afternoon) and the lows (significantly-better traffic on 101--admittedly a good thing in and of itself--and hordes of people losing jobs and moving back home each month).
>It's important to distinguish between San Francisco and Silicon Valley. The Valley has recovered--traffic on 101 has long since become awful again, as today reminded me--but San Francisco still hasn't regained the equivalent of all those bubble-related jobs that vanished into the wind in the 2001-2002 time period, and probably never will. (I've been living in San Francisco for going on two years now and have yet to meet anyone who is working in a "Web" or "e-commerce" job up here. It's like a neutron bomb; the people went away but the buildings stayed.) By contrast, yes, the Valley lost tons of jobs, too, but at least the Valley had, and has, a longtime core of companies that made real products that do real thing dating back to the Fairchild/HP/Intel days. And on the Web side, of course, Google and Yahoo! are leading the charge. They're down there, though, and not up here. Unless and until another bubble develops, I expect San Francisco will remain a remarkably tech jobs-free (but with plenty of finance, retail, and other non tech-related companies) city on the edge of the world's greatest concentration of tech jobs.
Obviously I didn't know that there indeed soon would be another bubble in SF, this time a social media-driven one.