Tech Layoffs

[Darker45]

This has only been maintained because of the proximity of these companies to the printer by the Cantillon effect.

If we take a couple of steps back, in the grand scheme of things, this might indeed be it, although industries have their own struggles of course as factors.

The high time preference brought about by soft and cheap money causes all kinds of unsustainable investments. The proximity that you mentioned must have made everything worse. Taking risks is easy with a money that loses value fast and a government that has full control of its supply and distribution.

In particular, however, I suppose the recent pandemic, inflation, AI, and other factors are all contributory.

[Helena Yu]

I guess it's normal.

Although I never own a startup, but my assumption is when the startup got bigger and bigger until it become really popular and can sustain without need to take care the micro task, it's when the entry level jobs aren't important anymore.

In that level, a big company needs senior research and development, marketing and sales.

[stompix]

What do you think? Is it just a shrinkage and normalization after the strong build-up of the workforce during Corona or a long-term trend that will accelerate through the use of AI?

It's returning to normal, the madness in covid hiring had to stop at one point.
https://edition.cnn.com/2023/01/22/tech/big-tech-pandemic-hiring-layoffs/index.html

By September of 2022, Amazon (AMZN) had more than doubled its corporate staff compared to the same month in 2019, hiring more than half a million additional workers and vastly expanding its warehouse footprint. Meta nearly doubled its headcount between March 2020 and September of last year. Microsoft (MSFT) and Google (GOOGL GOOGLE) also hired thousands of additional workers, as did other tech firms like Salesforce (CRM), Snap (SNAP) and Twitter, all of which have announced layoffs in recent weeks, too.

Everyone went nuts in hiring IT related workforce, some going completely nuts and hiring more than even the wildest expansion would ever require,  I work in logistics and while my company wasn't that bad at this one of our partner bought maintenance services alone that would have been enough for a business 100 times their size, they are now paying a contract for 8 or 10 months left in which basically the technicians come and look at each other. We have a case of unpacked servers that were never needed and probably will rot in the storage, unless we would be able to buy ourselves those, or maybe even receive as a gift 

It's not something special it's business realizing they have expanded their workforce well beyond their profitability limits and that there is no growth that would ever make those inflated numbers profitable.

[tyz]

I think Elon musk is the reason why all these layoffs are happening. He fired like 75% of all twitter employees and the company is still functional.

It's a bold claim that Elon's approach to Twitter is a role model for others. It is true that, from a technical point of view, Twitter works even without the 75% of employees who were laid off. However, the quality of posts on Twitter has declined massively, in particular there is a lot of spam, bots and hate messages from all sides. I have been active on Twitter for several years and have noticed a big change over the last year or so. Many large advertising partners are also dropping out.

[spectre71]

Good, I see article after article about people refusing to return to work and getting canned. Good.

[goldkingcoiner]

Not a day goes by without a tech company announcing major job cuts. Today Paypal and Block (both payment service providers) have announced a total of 3500 job cuts, and recently Salesforce, Microsoft, SAP, Google, Ebay etc. have also done so. According to https://layoffs.fyi, 25,000 documented tech jobs have already been cut this year.

What do you think? Is it just a shrinkage and normalization after the strong build-up of the workforce during Corona or a long-term trend that will accelerate through the use of AI?

End-stage-capitalism, basically. Americans are going to be at each other's throats at the crescendo. But that is going to be interested to watch for the rest of the world. But ultimately in the long-term, AI will bring more jobs than it currently is taking. So I do not think that the major job cuts have anything to do directly with AI. I think it is regularly just cutting corners wherever and whenever it pleases the stock holders.

Market conditions are as uncertain now as they have ever been in the past. Even more so, looking at the world situation. I guess the companies you mentioned are preparing for shrinkage, if anything.

[poodle63]

I think Elon musk is the reason why all these layoffs are happening. He fired like 75% of all twitter employees and the company is still functional.

It's a bold claim that Elon's approach to Twitter is a role model for others. It is true that, from a technical point of view, Twitter works even without the 75% of employees who were laid off. However, the quality of posts on Twitter has declined massively, in particular there is a lot of spam, bots and hate messages from all sides. I have been active on Twitter for several years and have noticed a big change over the last year or so. Many large advertising partners are also dropping out.

i still remember elon being called out for firing too much people back then definitely not a role model for other companies added with the fact that twitter was so bloated with too much employee doing nothing as implied by elon i think back then he make tweet about this quite frequently and he decided to fire and also eliminate bots, well the part about eliminating bots fails miserably though right now twitter is just as infested with bots as before even in his own tweets which is kinda ironic.
from the data alone, its not because large corporatino following elon move its just that there are simply too much unused workforce while the productivity still stagnating, i think they've hit the diminishing return as a result of their mass hiring.
therefore the mass lay off, not to mention its always the entry to middle position that got laid off, hopefully things getting better.

[Yamane_Keto]

I guess it's normal.

Although I never own a startup, but my assumption is when the startup got bigger and bigger until it become really popular and can sustain without need to take care the micro task, it's when the entry level jobs aren't important anymore.

In that level, a big company needs senior research and development, marketing and sales.

In the past, establishing companies was difficult and unsuccessful on average, and it still is so, but social media highlighted success to the point that everyone thought it was easy, and financing policies, buying back shares, and manipulating the number of employees are all things that helped accelerate the growth of companies in a short period.

however whats been seen now is those in remote working, outsource their own work tasks to freelancers in lower paid countries. and the domestic employee then requests more work tasks to then outsource more work to lower income countries to be freelancers of the employee.
meaning the domestic employment of remote workers drop because managers see one worker achieving multiples of work tasks
thus taking work away from the domestic remote working market, due to outsourcing work to AI or lower paid countries

This may include tasks that anyone, even with little experience, can perform, but outsourcing may not be appropriate for most remote work sources and will not significantly change employment numbers.

[The Sceptical Chymist]

I guess it's mostly because of recession and general economic downturn. AI as the reason for layoffs? Can't think of any tech professional which could be replaced by AI right now. However, I can't exclude it can happen over time with AI becoming more advanced.

Yeah, I think it's waaay too early for AI to be replacing any workers, much less ones in Silicon Valley.  That might happen eventually--though it remains to be seen--but I'd imagine that there would be more employees hired to do AI projects and such before they get axed in favor of AI.  The tech just isn't there yet as far as I know.

OP might be right about the COVID theory, but it's not like I've ever followed hiring trends in any sector so I don't know if tech companies took on too many workers back then.  From what I've read and been told, the economy is fairly strong so I don't think these layoffs are a sign of some decrease in demand for tech-related stuff.  Who knows?  If I was really curious (and honestly, I have only a mild interest in what goes on in the tech world), I'd probably search some of the tech news sites because they've probably got some answers, or at least some educated guesses.

Also, in the grand scheme of things, 25,000 workers might not be that big a deal to the sector.  Tell that to the people who got laid off, I know, but it isn't as though all of these companies are slashing their workforce.

[Poker Player]

I don't think that was her real life when she works in Twitter, surely the company have all the facility, but she was just create a video that show the good things on there. "We" can do same, show if we can get free coffees, free lunch, free side dish, friendly colleagues, etc.

I don't know where you work but where I work I have no tap wine available, no foosball table, no yoga and I can't go out to drink tap wine while I relax looking at the sky during work hours. That video is not the only one, there were several videos of that style at that time. The original is no longer there and I guess the author ended up deleting it after being fired. Musk fired 6,000 people or 80% of the staff, so what you see in the video is a true reflection of what was happening.

[Kakmakr]

Yea, I think from what I have researched, most layoffs in the 1069 companies that has done this, has to do with a global slowdown in the growth in the IT industry. (They made less profit in the last couple of years)

Companies are spending less on tech and more on the basic operating functions of their business. The rising inflation and the decline in income during the Covid pandemic, has forced them to cut cost on expensive tech upgrades or improvements.  

[Hewlet]

Not a day goes by without a tech company announcing major job cuts. Today Paypal and Block (both payment service providers) have announced a total of 3500 job cuts, and recently Salesforce, Microsoft, SAP, Google, Ebay etc. have also done so. According to https://layoffs.fyi, 25,000 documented tech jobs have already been cut this year.

What do you think? Is it just a shrinkage and normalization after the strong build-up of the workforce during Corona or a long-term trend that will accelerate through the use of AI?

one thing that is common with most firms is that it's there general nature to look out for ways of cutting down cost and one of the easiest ways of doing so is by laying off workers and and look out for ways to work with a limits number of staff and at the same time meet the requirement of the job.

The major thing to take out of this is that as much as AI is replacing some work and workers are being played off, their are individuals in those firm that regardless of the need of the company to lay off workers, they will never consider dropping them for any reason because of the value that they have. And this should only challenge you to become more valuable and skilled at whatever tech job you're into so when the possibility of laying off workers comes in, you wouldn't become the nearest option to be considered.

[NotATether]

I guess it's mostly because of recession and general economic downturn. AI as the reason for layoffs? Can't think of any tech professional which could be replaced by AI right now. However, I can't exclude it can happen over time with AI becoming more advanced.

Not really.

It's more because these companies tend to over-hire in the past. Why? I don't know. Mahybe they gave their recruitment team too much power? Anyway, it bloated the workforce at these companies, and when projects fail or products are cut or services are shut down, the entire division behind it is going to get laid off. So it doesn't really have much to do with AI.

[Peanutswar]

There could be different factors, currently with the technology AI and machines are replacing people so most of them aren't really needed anymore if it already configured how to navigate the task, or else just the company having a hard time with the expenses and once of the best way is to remove manpower just to recover with their current status. Still at the end its all about the profit gains of the company so its their decisions we are just slaves of corporate world so ideally not being dependent on this.

[blockman]

This has been a trend and it is going to continue but at the some point, I think that the time for these companies to have more demand again and going to have more manpower again will come but at least not for now. As said specifically for PayPal, the proliferation of many startups changing the ways or having better solutions for payments have come. I think that there have been hundreds if not thousands of them yearly that have been established and most of them have been talking about providing digital solutions for quicker and cheaper payments. That's what I've been seeing with many of the startups that I don't know whether they truly solve problems or they simply are providing a better alternative options against PayPal.

[Apocollapse]

I don't know where you work but where I work I have no tap wine available, no foosball table, no yoga and I can't go out to drink tap wine while I relax looking at the sky during work hours. That video is not the only one, there were several videos of that style at that time. The original is no longer there and I guess the author ended up deleting it after being fired. Musk fired 6,000 people or 80% of the staff, so what you see in the video is a true reflection of what was happening.

Obviously in the companies where I work there's no tap wine, football table, quiet place etc too.

But what I mean is, we can create a video about the bright side in our working place even though not as fancy as Twitter's company.

It's weird to be honest, why they need to hire people just for come to their company, enjoy the facilities and get paid for that?

currently with the technology AI and machines are replacing people so most of them aren't really needed anymore if it already configured how to navigate the task

If the country has a laws about AI, not many people will dare to use AI for profit oriented purpose. There are many people sell their design using AI, even though it sounds stupid why people want to buy AI generated images, but if the government can being strict with copyright issues, people will scared.

[Agbamoni]

It's more because these companies tend to over-hire in the past. Why? I don't know. Mahybe they gave their recruitment team too much power?

its still a bit related to the effect of the use of AI because the reason why most companies hire much workers at the outset is because most of the work require human to do them and with the use of AI in doing most of those jobs, its just normal for the firms to lay off her workers just so they can cut down cost.

But that is not to say that the advent of AI is the major reason why tech firm are laying off her workers because of them have thier particular reason why they drop thier workers but regardless, the main reason id still centred on cutting down cost

[jrrsparkles]

This is what happens when companies do not need their workforce and my assumption is due to the automation of jobs due to the technological evolution. It doesn't mean these people can't find a job unless they have no other skills that is what needed in the present. Employment in the IT field always has been a double edged squad, you can make more money than other jobs and suddenly your job security can be in jeopardy.

[stompix]

End-stage-capitalism, basically. Americans are going to be at each other's throats at the crescendo.

Yeah bruh, capitalisms is going to die...every century now
You do realize you're here because you like Bitcoin which is the pure essence of capitalism, where the one with the cash buys and earns some more and the owe with nothing (no capital will be forever a no coiner just as poor as he was before?

And furthermore, you remember how Bitcoin as supposed to kill middleman, kill banks, all that because there was no need for them anymore?
Look what bitcoin bought, thsoaudns of jobs exactly in the fields that it was supposed to destroy!

Also, all doom and gloom lovers, postpone your party:
https://apnews.com/article/unemployment-benefits-jobless-claims-layoffs-labor-02b17c02f52ff4f68090a3f67f9e45c8

More Americans filed jobless benefits last week but layoffs remain at historically low levels despite elevated interest rates and a flurry of job cuts in the media and technology sectors. Weekly unemployment claims are viewed as representative for the number of U.S. layoffs in a given week. They have remained at extraordinarily low levels despite high interest rates and elevated inflation.

[goldkingcoiner]

End-stage-capitalism, basically. Americans are going to be at each other's throats at the crescendo.

Yeah bruh, capitalisms is going to die...every century now
You do realize you're here because you like Bitcoin which is the pure essence of capitalism, where the one with the cash buys and earns some more and the owe with nothing (no capital will be forever a no coiner just as poor as he was before?

You are conflating the concept of money with an economic system (that I happen to disagree with). Bitcoin is a currency and even communist countries have currencies. I see no direct relation to capitalism.

Tell me, how is it that Europe and the US both have free markets and yet in the US, there are no adequate safety nets for individuals who get into financial troubles? Is there really any excuse for charging a desperate, diabetic man thousands of dollars per month just so that he can keep himself alive, with medication that costs pennies to make? Or lets talk about the cash incentives for privatized prisons in the US to keep as many people as possible locked up? China has less incarcerations than the US and they have a population of over 1.4 Billion. Seems strange, don't you think? Why base your economic system on the concept: the greedier the better? That only makes sense when looked at from the perspective of a business owner who does not want his employees asking for more money (Although lets not talk about the concept of lobbying right now).