The U.S. economy is booming. So why are tech companies laying off workers?::undefined
The layoffs are precisely why the “economy” is “booming”.
Nah, reducing costs in one relatively small sector doesn’t affect the GDP or other national-level metrics.
I could see how you might think that if you’re really bad at math and clueless about how our economy works. Unemployment is only 3.7 percent, nationally.
Blame AI and share prices.
Laying people off is a way to juice the stock price in the short term. So perhaps the “economy is booming” because of the layoffs?
Absolutely, layoffs are exactly why some tech companies can boast of record profits.
The stock market isn’t the economy.
Schrodinger’s economy
You have to open the box to find out if the economy is alive or dead.
I’m told the box once belonged to Pandora.
<Brad Pitt through tears and a contorted face>
“What’s in the box?!?!”
- Companies value short term gains not long term projects
- COVID overhiring
- Salaries are too high for peons, they are trying to readjust
- Market is spooked due to the interest rates and SVB collapse
- New product offerings are not exciting consumers
- The belief AI developments can offer performance improvments
- The belief AI developments can weather regulatory scrutiny
They overhired during the pandemic adding to already bloated teams which could be made cost efficient during low prime-rate times. The tech job market is correcting back to proper levels. Schools and programs churning out new tech workers are contributing to this massively over populated job space.
Literally downvoted for the truth about the cuts. They’re still above 2020 head counts.
However, there is still a huge shortage of tech workers. Just because huge companies do layoffs doesn’t mean the overall hiring demand is down. Those handful of companies aren’t the entire economy.
Except the overall hiring demand IS down and it has been since December.
You know it’s bad when across the globe, IT systems administrators aren’t even getting hit up by RECRUITERS.
In the U.S. at least, it’s been a continually “in demand” field since we recovered from the U.S. housing market crash of '08-'09… right up until before the New Year.
Now I’m hearing the same thing from people in the field worldwide and that is that there’s been an uncharacteristic hiring stall in a historically consistent field of IT infrastructure.
The same is supposedly true in other portions of infrastructure as well, likely because companies still view infrastructure as a cost center instead of a force multiplier.
It remains to be seen if the hiring silence will extend to full stack devs/programmers if this heavy layoff follow the leader garbage goes on much longer, but if it hits “revenue generator” departments, I’m afraid we’ll start to see other companies tech stacks failing like Twitter’s current functionality has.
I asked an executive this very question, and he said that the board was getting pressure from stock-holders to reduce headcounts, and justifying that pressure by pointing to other large companies who had already undertaken massive layoffs, and the resulting rise in their stock prices. In this way layoffs become a game of follow the leader – or like a contagion. “Google just fired a third of their workforce, why are we doing that? We should do what they did, look how successful they are.”
It’s important to remember that for tech companies, labor is the single biggest cost by far. In many cases it’s the only significant cost. Tech companies don’t buy raw materials and sell finished goods. They hire expensive people and sell finished goods.
So layoffs aren’t just show. They actually count. And in a speculative area of the economy that’s still largely held up by lending, and where interest rates are sky high, it is in fact truly meaningful to show that your primary costs are under control. There was also legitimate frenzy hiring because of COVID that a lot of tech companies have to face the music on now.
This isn’t all empty theater for rich people. It’s actual cost of doing business math.
Ugh well hopefully there will come a point when there’s not actually enough people to layoff anymore. Then maybe the game of follow the leader will stop. Or maybe another one starts up where they start over hiring again, who knows
Executive decision-making is like ChatGPT, but even dumber.
The same reason everything costs more without there being inflation, greed and the never ending desire to make the line go up. At the end of the day that’s all a publicly traded company cares about. Line go up. They will do whatever they can legally, or hidden from legal scrutiny to make that happen.
All hail the Line!
I think that’s synonymous with “all hail the shareholder”
The line has spoken, it said “I am a line.”
I am a stick.
But you could be
firea green up-lineBut I am a stick!
Let us also not forget that AI does not work. They made internal promises to themselves about how it was going to radically transform everything, within the next couple of quarters it seems, and when those “promises” did not materialize… the workers are the ones holding the bag (not “blamed”, yet jobless all the same). So much irony at every single level. Like AI really will transform everything, but dayum give it a second will you?
In short: everything is performing fully normally, more’s the pity:-(.
The US Economy is only booming for rich people.
That does not explain it either
Wealthy shareholders and C-suite executives are trying to squeeze out as much profit as they can. Their boom leads to bust for the rest of us.
Actually the bottom 50% have seen the most wage growth.
I call bullshit. That is not what anyone sees.
Data doesn’t lie.
I think one problem with the “vibes” everyone is giving here is that most people aren’t as poor as they think they are. I suspect a lot of people on this site would not believe that one third of American households make less than $50,000 a year, and 8% of American households make less than $15,000 a year.. If you’re making $80k and struggling, it can be tough to hear that “the poor” are doing better because you think you are one of the poor.
I’ve been in the 1/3 my whole 36 years I’ve been alive. To me the economy has failed.
Ah, I see. You are poor, therefore everyone is poor. Makes sense.
What is it with you people coming here and making the most absurd statements? Seriously fuck off back to Reddit along with your strawmen. You want to know why I’m poor? Graduated high school and studied to be an electrician,then the 2008 housing bubble collapsed so I went back to school to learn IT but nobody wanted a fresh out of high school no experience 20 something year old in an oversaturated market so all I got were shit, low paying jobs for 10 years. Now that I’ve been trying to learn programming to get out of my current dead end job for the last 18 months and the tech sector is firing off employees left and right. The economy failed. Pull your head out if your ass or stop being a corporatr shill trying to astroturf real problems away.
I did not ask for your life story.
“Most people are doing better” does not mean “ALL people are doing better”. Under Biden policies, most people are doing better, and that is a good thing, and if you are too goddamn selfish to care that life is improving for other people, at least take heart that Biden is working on ways to help you, too. And don’t be so goddamn stupid to think that just because it’s raining at your house, the whole world is having a monsoon.
You can say that the economy failed for you. Not that, to you, the whole economy is a failure. That makes no sense.
Data can absolutely be misleading. Liars, damn liars, and statisticians, as they say. And trying to produce one number that somehow represents everyone will never work, whatever economists want to think.
The fact is many of the super-poor are doing better because government benefits like social security are indexed to inflation, meaning they are actually keeping up.
Personally, my real earnings are down over $10,000 a year. My whole industry has stagnant wages. Don’t piss on me and tell me it’s raining.
At this point there are more people trying to reject data based arguments with that cliche than there are people making bogus cases according to it.
And trying to produce one number that somehow represents everyone will never work
Well it’s a good thing no one is attempting that?
Personally
You’re an outlier. Understand that you’re not the center of the universe, please.
that’s what we’re trying to get you to do!
wat
Well it’s a good thing no one is attempting that?
Oh, what do you call a statement like “The US economy is booming?”
You’re an outlier. Understand that you’re not the center of the universe, please.
Are you going to tell me I am the only one struggling and not seeing wage gains? Do you want to tell me my experience does not matter?
Do you just not understand the concept of other people existing?
I appreciate a data supported argument, and love that you actually linked sources.
One thing that I feel is missing in most of the linked analyses is that inflation has also hit unevenly, and the price of basic goods has increased significantly more than overall inflation. Which would explain why households still have less disposable income, also the mean debt burden is much higher leading to loan costs being more common.
“Real wages” takes that into account. The term “real” (as in “real wages”, “real earnings”, etc) means the increase in money minus the increase in inflation.
So for example the top paragraph says there’s been a “3.2 increase in real earnings”. That means there’s been a (pulling numbers out of my ass to illustrate): 7.5% increase in earnings, but also a 4.3% increase in inflation.
But price increases of cereals ( bread, pasta, grains, etc.) increased by about 7,5 % last year alone, which is more than the inflation, and more than the increase after inflation.
That’s where people might complain. They still can’t afford food, as food prices increase faster than overall inflation
That’s a fair criticism, and the Biden administration is looking into more specific action with regards to grocery stores. More work needs to be done to bring food costs to a reasonable level. I’d also support a revising of the CPI to better account for necessities like food and housing.
$80k is a struggle salary where I live but only if you have the ambition to own property and raise multiple kids. The common narrative is that everyone could do that on manual labor wages back in 1950 but that’s definitely bullshit.
The real travesty is that my kids teachers are pulling down $25k - absolutely ridiculous.
Not only that: once, I went to take the qualifying exam for California teachers and the room was full of people yammering about that sweet $25k they were about to start making in just two short years when they get their credential. That’s poor.
horse shit. if you wanna play the twist the numbers game, do it in an article on your blog. booooring
I give data and sources below, but I’m sure that’s too booooooooooooring for your tiny little brain.
I see, you forgot to say Union and corporate soulless husk. They can’t be bothered to upvote you on just facts alone.
The job market is trying to correct but it’s going to take a long time.
After a decent inflation push blue collar wages have to come up or people just starve to death and people aren’t very fond of that.
Honestly some of that lower-end boost is probably work from home bolstering the job market is bringing white collar jobs into areas that are deficient.
What I haven’t figured out yet, as hell New York City and San Francisco haven’t managed to completely outsource all their work to Kentucky, Ohio and Tennessee. You should be able to hire developers out of there for less than half the big city rates.
The past 40 years have shown me that no matter how well the economy is doing in the news, it doesnt mean shit for most Americans.
I wonder if it isn’t a symptom of things going from high competition environment between new internet services and older stuff like cable to more established systems of revenue which don’t have as much incentive to compete for workers or market share. So maybe that’s the end result of approaching monopoly.
This corporate cycle isn’t likely to change anytime soon right?
Top tier corps, boards, Cs, ultimately care about share price and growth right?
Isn’t it tied to their pay incentives? To keep their contracts and incentives, they have to grow or reduce costs.
They make bad choices or bets among the way, no problem, just reduce costs and still meet the metrics. Only people who pay seem to be the workforce, right?
Or am I oversimplifying?
The answer is that in this context “Economy” means the stock price of billionaires’ vested companies, not the prosperity of a common citizen (a.k.a peasant)
Greed
Maybe because, I dunno, tech is not the whole economy, you self absorbed tech bro dumbasses??
