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Comment by jjoe | Hacker News Reader

We'll see many more layoffs like this in the coming weeks / months as the Fed tapers off. This is macro related.

Can you possibly explain a little more? From my research [1] the fed tapering off looks good for business as stocks skyrocketed according to the article [1]. Personally I think it is good the Fed is tapering off and starting a slow transition (note: I have libertarian views hence less gov't involvement the better). Obviously, I am no expert, maybe someone can explain why it's bad other than the market might not being ready?

[1] - http://www.cnbc.com/id/101282912

I don't think he can explain more. He's basically predicting the stock market without any insider information.

And he's basing it on macro which is even more random.

Fed tapering means there's less liquidity in the markets. That's because they're buying up less risky assets off the financial institutions. Less money in the market means less "free" cash available to be loaned up for risky investments. I wrote a little about this in this submission: https://news.ycombinator.com/item?id=7172139

Of course I can't predict what will happen but it's very clear that less money always means less money. A lot of businesses rely on bank loans to make ends meet with regards to payroll. This might not apply to Dell but it applies to a lot of small business owners who need the extra help until they get paid by their clients and then pay off the short term loan. Stricter payroll loan policies (when money is scarce = bank reaching low levels of liquidity) puts businesses in tough situations leading to sudden layoffs.

The Fed's goal is to try and regain control of the system (they lost control last summer). So by tapering they're shaking the tree. Just like you'd put an electrical signal through a black box and study the output in an attempt to understand how it works, the Fed is gradually cutting its $85bn per month supply of "cash."

That's what the Fed (Yellen) is doing right now. I'm sure they'll react if things degenerate too much.

FYI, it's a carnage in the financial markets right now. Dow was down several hundred points in Jan. Several hundred points just today.

... Except the Fed is mainly buying Treasury debt. It actually encouraged loaning out for "risky" investment by pushing down interest rates. That's why there's the fear in emerging markets as the program winds up.

They just did a leveraged buyout. This is not macro related.

Emphasis on the leverage part. Interest rates matter, a lot.

Probably all swapped or funded at fixed rates. You don't do an LBO and then go bust when rates rise. You still need to refinance but the assumption is you have made cost savings, sold stuff and reduced leverage by then.

I think it's related to the recent crappy weather. Correlation and causation and all.

Well, the weather is good in some places. It's because of the recent good weather! No, it's because of the simultaneous good and bad weather in different parts of the country!

The weather has been pretty bad in the parts of the country where most people live.

I don't know how you conclude that - evidence please. Seems more likely that these are cost cutting measures taken to trim costs as part of the private equity restructuring, and the fact that their products are not being exactly welcomed in the marketplace.

I am not seeing anywhere that this is due to a lack of demand, but rather due to re-structuring the company.

Unfairly down voted. Although I understand no one wants to hear bad news. Let's do this: meet me here in May/June and we'll see if my "prediction" of the effect of continued tapering is somewhat accurate. Here's the crux of it:

1) More layoffs in different sectors of the economy

2) Less VC funds to go around

3) Main street feeling the brunt of it

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