It’s the business cycle, mostly. During the pandemic, low interest rates drove a boom in risk investing that flowed downhill into tech company balance sheets. Of course everyone used the money to hire lots of developers and engineers - probably more than were needed for the business opportunity they were exploiting.
I think AI is being used as an excuse for layoffs rather than the cause. Companies don’t have the cash and times got a bit too rich. This is the cyclical pull back that has been going on for decades.
There is never just one cause, but I do think AI is one of them.
Not in some AI "dey took er jerbs" kind of way, but because businesses are turning their investment focus towards AI-related ventures, like building data centres, and away from investments that require tech workers. Non-residential construction jobs, for example, have surged.
Well yes, Meta even said so explicitly about their upcoming layoffs. They're offsetting the capital expenditures into data centers, and "preparing for greater efficiency brought on by AI-assisted workers".
So who is getting that money then? Contractors building sites? Is it going off to the silicon manufacturers? Is Nvidia getting a large part of the pie?
Also, whether Covid is to blame or not, all these layoffs (not just the Meta one) contradict some of the most common rationalizations I've seen for how AI won't destroy the labor market but rather expand it.
If there really is all this latent untapped need to drive a Jevron's effect software explosion that will keep developers employable, why would so many profitable companies be laying off so many workers into the transition?
I have an explanation (or rationalization, if you wish) for this.
The AI caused the developer productivity to increase (similar to other two big SW engineering productivity jumps - compilers and open source), which gives them more leverage over employers (capital). Things that you needed a small team to build (and thus more capital) you can now do in a single person.
In the long run, this will mean more software being written, possibly by even larger number of people (shift on the demand curve - as price of SW goes down demand increases). But before that happens, companies have a knee-jerk reaction to this as they're trying to take back control over developers, while assuming total amount of software will stay constant. Hence layoffs. But I think it's shortsighted, the companies will hurt themselves in the long run, because they will lay off people who could build them more products in the future. (They misunderstood - developers are not getting cheaper, it's the code that will.)
I see this view very often being pulled into the debate but demand is not only driven through a (low) cost. Demand obviously cannot grow infinitely so the actual question IMO is when and how do we reach the market saturation point.
First hypothesis is that ~all SWEs will remain employed (demand will proportionally rise with the lower cost of development).
Second hypothesis is some % of SWEs will loose their jobs - over-subscription of SWE roles (lower cost of development will drive the demand but not such that the market will be able to keep all those ~30M SWEs employed).
Third hypothesis is that we will see number of SWEs growing beyond ~30M - under-subscription of SWE roles (demand will be so high and development cost so low that we will enter the era of hyperinflation in software production).
At this point, I am inclined to believe that the second hypothesis is the most likely one.
Many companies really got bloated during COVID. From what I can see online, Meta doubled their number of employees between 2019 and 2022. How long does it take to correct from that amount of hiring?
Some of these companies have increased headcount since their post-COVID cuts.
Some of this has nothing to do with COVID boom numbers. Some are bailing water as fast as they can (Atlassian, et al), some are treading water and betting on future returns from AI (Block), etc.
It takes time to correct 10 years of ZIRP, plus COVID overhiring that doubled the headcount of those 10 years in just 2-3.
The jig was up when social media like Reddit and tiktok during the pandemic was full of posts with big tech workers gloating about getting hired for six figure salaries to sleep in and play video games at home while putting in 2 hours of work a week, obvious to anyone with two neurons to rub together that it was a too-good-to-be-true unsustainable bubble that's gonna pop and trigger a brutal reset on the job market.
Further reinforced with Elon firing 80% of Twitter and the website didn't stop working, reminding big tech CEOs that they can also start looking into trimming the overhiring fat in their back yard, with no operational loss.
Reinforce that with wall street rewarding mass layoff with share price going up, contrary to the pandemic rewards of shares going up with over hiring, and you have the perfect storm.
AI and the idea of it replacing jobs, has nothing to dow with this, it's just 10 years of ZIRP reawarding every unprofitable bullsit SaaS start-up, and 10 years of "just learn to code bro" where every shoeshine boy became a coder so now tech companies hiring are spoiled for choice.
Edit: Oh I forgot, add to that the increased of offshoring to places with cheaper labor thanks to the normalisation of remote work making it an even perfecter(is that a word?) storm on why an average programmer's labor has way less value.
> Further reinforced with Elon firing 80% of Twitter and the website didn't stop working, reminding big tech CEOs that they can also start looking into trimming the overhiring fat in their back yard, with no operational loss.
I would argue Twitter is in a worse state operationally, but either way it’s moot because one simply has to look at the company’s valuation since Musk took over to see things aren’t going well. Unless the goal is a very loud megaphone for conservative influencers and talking points, in which case things are going great.
X doesn't seem to be in any worse state operationally. The site's uptime is fine, and they've launched a ton of new features that were well received by the userbase. So: 80% fewer people, site remains operational, new feature launches have if anything accelerated. That is a success by any companies measure.
The left is now trying to rewrite history and claim the fall in valuation is because Musk took it over, but it's not. Twitter's valuation was already falling rapidly before Musk entered the game at all. Like many tech firms its price had a COVID surge. The valuations of multiple tech companies were fell sharply right as he was in the middle of the acquisition. The timing was unlucky and he overpaid. That's why he tried to back out of the deal and, if you remember, why the Twitter board went to court to force him to acquire the company against his will.
> There are other potential reasons why Mr Musk might want to pull out of the deal. The stock market price for large tech companies has fallen steeply in the last few months - did Musk offer too much?
The subsequent advertiser boycott says nothing about whether you can cut a company like Twitter by 80% and still have it function. That was caused by Musk publicly rejecting leftist claims as false. CEOs don't care about that because they can cut employees whilst claiming to be increasing diversity and the left will leave them alone.
>I would argue Twitter is in a worse state operationally
Is it because they lack coding manpower, or because Elon chased away all advertisers? Correlation != causation.
Bear in mind I was talking about functionality of the product, not corporate operation/valuation.
>Unless the goal is a very loud megaphone for conservative influencers and talking points, in which case things are going great.
Funny, I never heard the left complain about Twitter being a woke/democrat megaphone during the Jack Dorsey era. Or complain about the social media censorship during the Biden administration. Where were they back then?
They don't hate the propaganda megaphone, they hate not being the ones in charge of it.
>Is it because they lack coding manpower, or because Elon chased away all advertisers? Correlation != causation.
Didn’t say that.
> Bear in mind I was talking about functionality of the product, not corporate operation/valuation.
Didn’t say otherwise. In fact I made it a point to separate out the discussion of how it is functioning operationally from its valuation.
> Funny, I never heard the left complain about Twitter being a woke/democrat megaphone during the Jack Dorsey era.
And the right isn’t complaining about the current state. You also don’t know what I said about Twitter back then. I’m not accountable for whatever general idea you have concocted “the left.”
I am simply saying that it clearly is a megaphone for the right now. If you think it is even somewhat neutral and balanced now feel free to say so, but I would be surprised to hear that.
Sorry I didn't mean to paint you as "the left", I was speaking in general sense.
And that's why I said "They don't hate the propaganda megaphone, they hate not being the ones in charge of it.", meaning I don't think it's a partisan issue, and both sides are equally guilty.
Maybe so but Musk’s whole promise was more neutrality and openness, which he has handedly failed to bring about. Twitter censors worse and more explicitly than ever. And don’t even get me started on Grok/Grokopedia. Like Trump it’s “accurate” if it reflects his worldview - same reason he puts his thumb on the scale with Twitter.
I am progressive. I understand Twitter leaned left. But it leans way further right now as exerted from the top than it did the other direction.
It's probably a mix of AI productivity boost and market cycle. There is some substance to AI job loss, but I believe jevons paradox will eventually catch up to transformer-based LLM capabilities.
I'm the last remaining frontend developer after multiple rounds of layoffs. With claude code I'm able to do 2x-3x the work I was able to do before it existed. It's hard for me to rationally argue we need more frontend developers.
Not only tech giants, everybody from celebrities to random Joes can get away with it.
My mother's husband owed 70k+ EUR in taxes and at some point the judge proposed and he agreed to 2800 euros.
The trick is to not have a bank account in your name only, you have it joint with a child/spouse and they can't take your money. Nor they can take your house, if you only have one.
Eventually under those situations the judges try to take anything rather than nothing.
I'm not defending this situation, just saying it's widespread and the fact that every two governments come one that does a "condono", which is essentially "let's agree with tax evaders for some 50% of the tax they owe so they are happy and we see something" doesn't help.
Harsher punishment should be warranted, but you can't go to prison for tax evasion.
It's pretty clear. If you have your bank account with 2 owners, and with X on it, X/2 are yours and X/2 belong to the other owner, at any point in time.
Case in point, if one of the owners deceases, you can withdraw X/2 at most. The other half is blocked until the inheritance paperwork is completed and that half has a new legal owner(s).
You 100% should be able to go to prison from tax evasion. Not to fill prisons just to line prison owners' pockets like in the US, but definitely have the possibility for egregious offences.
you can… it’s just not really clear that anyone does. that said, i think if you polled the average joe on the street, they would overwhelmingly say that you can, which is probably a net gain for society.
reply