The U.S. economy is booming. So why are tech companies laying off workers?::undefined
Using out of touch metrics that say nothing about how the median household is doing is not helpful.
On the other hand if you measure by how much the shareholders are getting richer, the layoffs are exactly why the economy is considered booming. Record layoffs lead to record short term profits for the wealthy few.
Combined with billions in weapons being ordered and produced, oil producing competition being crushed, while gimping Europs growth. The Chinese hurting from the Evergrande debacle and the lithography embargo.
Plenty of reasons for the US as an entity to celebrate.
Layoffs hurt GDP generally, but GDP doesn’t really care as long as “value” is created elsewhere. Like you said, none of the measurements they use care about the median income. It’s usually just generic measurements of “value” that don’t mean anything for the people of a nation.
It’s pretty clear to me that many companies are jumping on the layoff bandwagon right now since so many others are doing it too (doesn’t look as bad if your layoffs are drowned out in the noise). Easy way to increase profitability (on paper) and not look quite as bad if “everyone else is doing it.”
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.
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!
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!
I think that’s synonymous with “all hail the shareholder”
Money isn’t free anymore and they have a lot of debt
And
Elon broke the seal on firing huge swaths of a tech workforce to make your numbers look better.
Elon broke the seal on firing huge swaths of a tech workforce to make your numbers look better.
Don’t give him too much credit, it’s hardly the first time the tech sector has gone through this cycle. Elon had to do it because he massively overpaid for Twitter. The fact that his layoffs came at the front of this wave is probably just coincidence.
I wouldn’t say coincidence. I’d say the others were wanting to do the same, but held back because of bad press. After Elon did it, they had an excuse that took the heat off.
I really think a lot of this is “the other popular kids are doing it” and boards and VC saying basically the same thing to the c-suite.
You need more upvotes.
High interest rates are here, and it’s likely to be some time before we get back down to the 1% interest rates we saw during covid (or even before).
Companies are shifting either to real or imagined pressures of the stick market. And those pressures are less about chasing unlimited growth and want to see some return.
Ergo. Layoffs. Meta producing dividends.
If interest rates stay high, I’d expect to see large megacorps shift more and more to profitability over growth.
I’m old. These rates don’t seem high at all. It’s been higher for most of my life.
Congratulations on being old e ough to buy property when it was cheap.
For the rest of us, we all adapted to the low interest post-08 world. Now, we need to adapt to the higher interest post-21 world.
Since the vast majority of homeowners aren’t doing so with cash, the total cost of a home is the price over the lifetime of the mortgage. I’d be fine with the higher interest rates if the base price of the home was lower, or vice versa. However, the houses have gone up in price AND the interest rates have gone up meaning that the total cost has risen substantially.
Some of this is due to scarcity caused by the 2008-9 recession, people couldn’t afford homes, so the amount of new construction dropped and the workforce adjusted. Meaning that now we’re behind a few million homes from what we should have built by now, and that scarcity is driving prices up. Combine that with the high interest rates causing people to want to hold on to what they have instead of moving (so they can avoid the interest rate and housing cost jump) means we have even less inventory that normally.
I’ll probably have to move for work soon, and I’m not looking forward to swapping my mostly paid off 4% home with a more expensive higher rate one in a different area.
How’s it working out for Elon?
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.
Executive decision-making is like ChatGPT, but even dumber.
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.
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?!?!”
This is the best summary I could come up with:
Chavez is one of hundreds of thousands of tech workers who’ve been laid off in the past two years in what now seems like a never-ending wave of cuts that has upended the culture of Silicon Valley and the expectations of those who work at some of America’s richest and most powerful companies.
Last year, tech companies laid off more than 260,000 workers according to layoff tracker Layoffs.fyi, cuts that executives mostly blamed on “over-hiring” during the pandemic and high interest rates making it harder to invest in new business ventures.
And where we can find efficiencies and do more with less, we’re going to do that as well,” Amazon Chief Financial Officer Brian Olsavsky said in response to a reporter’s question during a Thursday media earnings call.
Unable to get back to the showstopping revenue growth of years past, tech executives are opting instead to put a positive spin on things for Wall Street by continuously cutting high-paid workers instead.
Even with several years of experience in software engineering, data science and manufacturing, including at Microsoft, laid-off Amazon contractor Jennifer Pearl said landing an interview has been tough.
For a former Meta user experience researcher in the Bay Area, who spoke on the condition of anonymity to avoid hurting her future employment prospects, the job hunt has been tough since her layoff last April.
The original article contains 1,321 words, the summary contains 225 words. Saved 83%. I’m a bot and I’m open source!
I can summarize more. Greed.
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:-(.
Let us also not forget that AI does not work.
Only someone who has never touched one would claim AI literally doesn’t work. So I have to assume that’s just for the sake of hyperbole because Lemmy hates AI. You probably just mean it doesn’t live up to the marketing hype? Okay, thats… That’s just how marketing works.
AI really will transform everything,
But, like, not yet? When will you declare it useful so I can go back to using AI in my daily life?
because capitalism is not about the workers, not about the quality of the product, and not about helping anyone. It doesn’t give a shit about anyone except whichever monkey is on top, and would argue vehemently against the suggestion that it should.
I’d go so far as to say that what it IS about, is not being human. Perhaps it’s about becoming a dragon? but even that implies some degree of personality. Capitalism is unrelenting, banal evil, for the sake of being evil, with an endless litany of specious lies to justify its utterly retarded bullshit.
I’ve always said capitalism and corporations are anti-social. They make society worse for profit.
Even the state of the economy is spun these days. Who even knows at this point, depending who you ask and what factors you look at.
…Searches for the word “union” in the article…
Yeah it’s propaganda.
“The stock market is booming”. Fixed the first part of the title for you.
As for why all of the layoffs? Because in the short term it usually causes the quoted bit above.
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.
The US Economy is only booming for rich people.
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.
Actually the bottom 50% have seen the most wage growth.
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.
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 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 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.
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?
$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.
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.
You can say that the economy failed for you. Not that, to you, the whole economy is a failure. That makes no sense.
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.
