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Comment by paxys | Hacker News Reader

Big tech companies have been making record profits year after year and their share prices are at record highs. Competition in the tech job market isn't due to Fed policy, it's because companies figured out that they were overstaffed and could afford to lose the headcount. That isn't going to change moving forward regardless of what the interest rate is.

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You think they all magically figured out they were overstaffed at the same time? It's 100% herd mentality. They're cutting because everyone else is cutting, just like they went on hiring sprees because everyone else was doing the same.

It's easy to measure short-term impact (we cut a bunch of people, we're saving money, we're more profitable) but it's very hard to measure the medium to long term impact of these cuts.

Note I'm not arguing these cuts are the wrong strategy, I'm arguing they have absolutely no clue.

It's unreal how people think tech leaders are geniuses when they keep doing this stuff. Oops we overhired but I take "100% responsibility" however the staff will take 100% of the punishment by being laid off. All while spending $32 billion on legless VR worlds that nobody wants or driving social media giants into the ground. It's Gell-Mann amnesia. Remember how dumb their last decisions were, by their own admission.

A lot of well funded VC startups poached liberally from big tech. A lot of VC money dried up (and some is now dry powder) because of higher interest rates.

If money pours back into VCs and they turn on the spigot again, you'll absolutely see the market change. Will it be significant? Maybe not in the grand scheme of things, or maybe it will, but to act like interest rates don't matter at all is silly.

Not to mention the IRS section 174 changes to the deductibility of software engineer salaries. It was a gift to huge tech employers in that it provided head winds against hiring in SME tech companies.

> it's because companies figured out that they were overstaffed and could afford to lose the headcount.

Well yeah but why were they suddenly overstaffed? It wasn’t some kind of collective paranoia. It was interest rates. With low interest rates, investors want you to prioritize growth. With high interest rates, its profitability.

I mean, it was clearly panic-driven. This isn't particularly unusual; economic upsets tend to cause transitory layoffs. Note that many of them are now hiring again.

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