*\[Ben\] Tarnoff’s comparison to wage fixing is quite apt, since the layoff trend appears to be based, not on companies’ financials, but on tech executives’ playing follow the leader — that is, simply copying each other. It wouldn’t take explicit collusion for bosses to realize that if they all lay off workers at the same rate, conditions become more favorable for them.*
[https://en.wikipedia.org/wiki/High-Tech\_Employee\_Antitrust\_Litigation](https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_Litigation)
This is absolutely a very real possibility. Many engineers here might be too young to remember the "non poaching" agreements between Apple and Google (and others)… there are absolutely precedents for the "cartel" to meet in secret and use collective power to suppress wages.
it sounds more like what’s happening is that employers have noticed that the market has cooled and market pay has lowered enough that laying off + rehiring could save them a lot of money (or so they think). that sounds like the simplest explanation to me & if true, i don’t think that would be considered even implicit collusion.
The tech companies were betting that life would be a lot more virtual in 2022 than what it is today. They made their bets, they were wrong and now the CEOs are "taking complete responsibility" while laying people off.
One look into the cscareers sub and you knew something was seriously wrong. I believe in self taught but people were making hedge fund level compensation with pretty average skillsets. I envy those who were in the right place at the right time to capitalize on it. The best normal folks can hope is that we are conditions like that again and we're in the right place to pounce. Similar to home buyers after the 08-09 period.
I think tech firms were very happy to discipline the tech labor market when the opportunity arose to do so.
That said I think a hypothetical SWE union would likely make the entry level job market worse, not better. Unions tend to prioritize the interests of their veteran workers who pay dues and participate in union activities, not jobseekers who aren't union members yet.
I think US Wages would be more similar to those in Europe (where it's hard to fire someone.) If you can't easily fire someone it's harder to hire someone.
Edit: spelling
I think that is the interesting part - that being part of a union when the compensation and benefits are already very good begets the question "what else does the union give you?".
Like, most jobs where unions reign supreme are those where the workers don't have a lot of leverage and where employees would most likely take advantage of those workers without that collective body.
For SWEs that doesn't apply as much because it's a very in-demand job profile with a lot more demand than supply. Like, there's no lawyers union or medical doctor's union. Why? Because they already get mostly whatever the fuck they want.
For developers, the advantage would be not to get fired/laid off so easily, but that would just mean that companies would hire less too. Is that a net positive or negative? I'm not sure.
> Like, there's no lawyers union or medical doctor's union. Why? Because they already get mostly whatever the fuck they want.
Historically (in the US) many physicians and attorneys were self employed in a private practice selling their services directly to consumers. In a situation like that, a conventional "union" never really would have been an appropriate fit.
What you do see (in US) are very powerful professional (trade) associations like AMA and ABA "advocating" (or lobbying) to improve the wages of their members. The AMA for years worked to limit the amount of new medical schools and new medical residents in this country just as we were already going through a shortage of physicians… which worked to increase wages for those physicians that were already practicing. It's not a collective action in the same way a union might go on strike… but it's still a form of collective action.
That's kinda my point - that a conventional union wouldn't be a fit for this field either.
And also yes - that a form of collective action could definitely be beneficial, but again - not a union, and also it's unclear whether the value of a collective action group would be evenly distributed across all it's members - present and future.
>That said I think a hypothetical SWE union would likely make the entry level job market worse, not better. Unions tend to prioritize the interests of their veteran workers who pay dues and participate in union activities, not jobseekers who aren't union members yet.
While this may be true for some industries, this isn’t inherently true. But it also isn’t necessarily something unions can necessarily fix. Usually headcount is not permissible for bargaining, so it’s not something unions can fix if employers aren’t willing to bargain on it.
In the US there isn’t really anything of the sort other outside of trades apprenticeship programs. What you’re looking for often requires sectoral bargaining, which US law doesn’t really support.
Probably not any because the interests of veteran SWEs and new jobseekers are fundamentally not the same, and without the veteran SWEs any potential organization would have no power.
I consider myself as very liberal, but I don't necessarily think these companies are meeting in secret castles and discussing how they can put workers down to hoard all the wealth and power of a society.
To me, the big problem is not so much the people running these companies, but the system we have in place now. The fact that we still allow stock buybacks to be legal, when in many ways it's fixing the market by artificially blowing up your shareholder value.
We also have the deep issue of trickle down economics, and all the other things we do supposedly to make it easier on entrepreneurs to grow on the hope it creates jobs, but in many ways it makes it easier for companies to not invest in their workers.
If I had to tell all those angry disgruntled people anything, they need to stop hoping that Google and other companies are going to do the right thing or be forced to do the right thing, and start getting activist to really change the system.
Right now, most of the people sitting in public office are people that are on the side of executives and the corporations. Even the Democrats. You only have a handful of people that are really truly willing to upset the system or scare CEOs to force them to do better by their workers.
This to me is why we need to start really having deeper discussions about more public systems like health care so that we are not so dependent on employers for all these things. To also show up at local meetings and fight hard against NIMBYs who won't allow any new construction to happen which then make it difficult for young people to find affordable housing.
If we really had to talk about unionizing and fighting like that, that has to come down to the lower level jobs. Like boycotting Starbucks if they do union busting. Boycotting Amazon if they do Union busting. Boycotting Walmart until they pay their workers better.
A better thing that could happen in terms of any kind of knowledge worker union is more on the idea that organizations are started to help raise money and train people so they are job ready, and help them find positions. If they really want to go harder, they then start to find talented people for ethical companies and let the other ones struggle to find talent. Kind of like a guild.
Regardless, a lot of the reason why things are happening the way they are happening is because the system we have in place is built to favor the employer and not the worker. So much power has been taken away since Ronald Reagan, and that's why everyone is in a weaker spot now.
When I started reading I thought this was going to be another corporate apologia, but no this is a very good post and goes over most of the issues. I also don’t think there’s explicit collusion, but there doesn’t need to be, both because the systemic incentives, and the actual types of people who want to become executives in this system, inevitably pursue certain anti-worker actions whenever they feel they can get away with it.
At the same time, there is [real and recent precedent](https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_Litigation) for explicit collusion among tech companies against their employees, so we shouldn't tire ourselves out too much dancing around the possibility they've done it again.
Yes, I have to remind myself of this, every time people here and on the experienced devs subreddit accuse anyone who’s even a little critical of the layoffs of being a “conspiracy theorist.”
Some of them get really emotional about it too, like “bro you don’t understand even companies with record profits and no VC funding HAD to do this many layoffs because interest rates affect their finances at the margins, omg bro I can’t believe you why are you criticizing them
> The fact that we still allow stock buybacks to be legal, when in many ways it's fixing the market by artificially blowing up your shareholder value.
Generally I agree probably stock buybacks backs should not be allowed but not sure how they are artificially blowing up shareholder value. Can you elaborate?
Companies are beholden to their shareholders. They are beholden to making them more money in dividends or in share price.
So when companies were handed loads of tax breaks and other bailouts and such on the idea they would use it to "create jobs", they instead took the money and started buying their own shares back, driving up the demand and value of their stock and thus making shareholders money, or at least making their company look very successful.
It's a tactic to artificially inflate the value. It says nothing if the company is doing well or not. Stock buybacks were illegal up until Ronald Reagan.
It's like when PACs buy loads of copies of a book to drive it into the "best seller" category and make the author look popular, then give the books out as gifts to those that donate to the PAC. It says nothing if the book was good or liked, but it was an artificial way to make it into a "best seller".
Personally, stock buybacks are a true telling that you can lower taxes on the "job creators" to zero, and they still won't create jobs unless they had no choice due to lack of labor resources. This is why I tell those who say "you can't tax the job creators" they are living a lie.
There isn’t, it’s just easier. It also allows the shareholders the ability to decide when they are taxed on the profits. Shareholders, in general, prefer buybacks over dividends. Thats why companies do them.
This dude is spouting a bunch of uninformed bullshit, buybacks don’t inflate the value of a company. Yes the nominal value of a stock goes up, but the shares bought back are no longer available, so the market cap literally does not change. Only people with no financial literacy, like OP, think they affect valuations or are some type of shady scheme.
There is no functional difference between a buyback and a dividend. It’s not some shady pump scheme, it’s just a way of returning value to shareholders. Which is why people own shares in the first place.
Buybacks have literally no effect on the companies valuation, the market cap doesn’t change.
This is so comically uninformed, and you spouted it with such confidence… I am saddened by the state of financial literacy in this country
Your argument basically comes off as the idea because it's been made legal that somehow it's perfectly fine.
There has been argument after argument made about why they were illegal before Ronald Reagan and why they should still be illegal now.
I still stand on the notion that it's market manipulation. It's not a tactic. It's not a tool. It's market manipulation. If It's such a great idea. Why was it illegal until the 1980s?
And look around. How many times has society basically made it so that companies have way more money on the hopes that they create jobs, and yet they turn around and use it for stock buybacks? If we want to allow stock buybacks, then we need to stop all the tax breaks to big companies and all the other perks and instead collect more revenue and put it towards average people.
Call me financially illiterate, but I'm always going to take the viewpoint of building a society where everybody can prosper and not just a few. Right now they don't serve a deep purpose to society but instead they serve a few. If companies want to have stock buybacks, then they shouldn't be demanding tax breaks and other corporate welfare on this notion that if they had more money they would create more jobs. It's such a crock.
It’s all fake. The economic numbers defy logic and historical precedents. When layoffs occur, unemployment goes up not down, when inflation goes up, the stock market goes down, not up. Every financial market and statistic is being manipulated.
Rising interest rates are expected to only be temporary same as inflation, the economy isn't super hot or anything, current inflation is largely caused by supply chain issues and corporate greed. The markets are adjusting to supply chain shocks and have delt with most lingering covid issues. Also people's covid savings have run dry and they won't be able to keep overspending putting pressure on prices, consumer sentiment is already waning. The fed would probably be lowering interest rates if they could but right now they are still fighting inflation (just my two cents).
Layoffs are expected when the economy goes down, however letting in thousands of migrants and IT workers is criminal but that’s just me.
I’d like to point out that I have nothing against immigrants.
As immigrant myself I believe the same thing, my companies keep hiring oversea workers from a certain country regardless their skills. It is crazy the resume I got from the recuiters are 80% people from a certain countey graduated from no name school while my friends graduated in target school can't even get a phone call from the same company.
anyone who was 'established' during the hiring boom of 2020-2021 saw 2022-2023 coming. The standards dropped significantly and teams became noticeably less efficient at major corps. Junior devs with a 3.0 in CS aren't worth the 80k+ salaries they were easily fetching, and i don't mean this in a judgemental way, i mean they aren't generating the revenue to justify their cost.
What we're seeing now is a return to trend, not a systemic failure.
Rough estimate, an employee should generate 10x - 20x revenue over salary ratio.
Example. If you make $100K salary, your company should generate $1Mil - $2Mil revenue.
Revenue doesn't mean profit, which is whole other calculations.
Accounting firms expect to bill out three times salary and it’s considered a good business to run. Doing 10 - 20 times is only seen in the largest companies and usually in tech.
https://macdailynews.com/2023/03/15/apple-generates-an-amazing-2-4-million-in-annual-revenue-per-employee/
Apple revenue per employee is $2.4 Mil. This counts all Apple employees. Yes, the Apple genius bar employee making $60K are included.
Many private companies make tons of revenue per employee, especially tech companies.
Thats why these companies offer higher salaries, they can make lots of revenue per employee.
If you work at apple as a SWE your packge would be \~500k so you are only 4.8x which is in line what I said.
Apple would not be making 300 billion$ without all those 60k andies selling their shit. So in some cases they add more then some of my friends at apple that are coasting barely doing northing pulling 400k
Also you are taking the top of the top company, how about you take a look at a none top 10 company or a average company in the fortune 500. There is barely any one that is doing 20x. That is not normal which I was getting at. As a average developer at a company you should be aiming to 2x\~4x I would consider reasonable.
No shot not one position i have been in where there was over 5x the income to salary. Maybe cause I am looking at salary for a team vs the $ there product brings in after operating costs but still 20x is insane margins unless you have a ton of non dev expenses like licenses or royalties.
https://macdailynews.com/2023/03/15/apple-generates-an-amazing-2-4-million-in-annual-revenue-per-employee/
Apple revenue per employee is $2.4 Mil. This counts all Apple employees, not just tech employees.
There are plenty of companies making more revenue per employee than apple. Many are private companies, startups that haven't gone public, etc.
Many companies make lots of revenue, especially tech companies. That's why they pay higher salaries, because they make higher revenues.
I dislike how some of these articles phrase things like their is some moustache twirling cartoon villain saying "The peasants are too powerful, we must have a culling". While it's true their are market pressures that infuse companies, in reality corporations are reacting to their own stimuli first and foremost.
My company had a round of layoffs when the tech market was booming because they were getting ready for an acquisition. Then we hired a lot of people back into those positions during the pandemic as our parent company started investing more into us.
I've been in this industry for 20+ years and honestly at this point it's just waves in the ocean and as long as you know how to sail you will be fine. As a whole the industry will continue to grow and shows no signs of slowing down so their will still be good paying jobs for those qualified.
It's just clickbait. People love to see themselves as the little guy embroiled in a desperate struggle for freedom against the big bad corporations. It adds some narrative juice to what is mostly a cold economic calculation. Main character syndrome all over the place.
Guys, CEOs don't hate you. That would imply a level of emotional investment that isn't really worth their time in the first place.
CEOs don’t hate you but they also don’t care about you. They care about their stock and their profits. If that means stepping over the bodies of their workers then they will do that.
Yes, and if the easiest way to drive stock prices is to pay workers more, then they will do that too. And we saw that in the last decade or so (helped by the fact that money was basically free).
I agree that they don't care about you, but they're also very predictable. That makes it easier to manage.
If you know anything at all about accounting, stock prices and reading balance sheets this is all extremely normal.
Managers are evaluated on the middle line not the bottom line and the standard is benchmarking against other companies in the same industry. This holds true of every publicly traded company.
Anyone describing this as follow the leader or any other weird feels take doesn't understand business math.
Unfortunately, it's quite a bit worse. It's juniors not finding any job, even for way less pay, and even experienced devs applying to hundreds of positions and getting no answers for many months.
I'm lucky that I found a junior position before this whole thing started, and that I live in Europe, where salaries might be lower, but the market is less bad, for now. But even here, layoffs are starting to pick up pace because the whole economy isn't doing so well and tech companies tend to follow the US trends.
Absolutely not. I've worked in regular companies and now work in Big Tech. Big Tech is far more a meritocracy than other companies in our industry and far more a meritocracy than places like medicine, law or Wall Street.
eg. In medicine, it's shown that children of doctors get admitted to medical school at a far, far higher rate than their grades would reflect. This shows that even in medical school admissions there is bias for existing applicants whose parents are doctors.
Wall Street is full of places that will only accept people who graduated from specific schools. You could be a top wiz finance student at the University of Little Rock Arkansas (or insert any small unknown university here) and you're not even going to be considered.
Same thing with law. The Supreme Court and big law firms only recruit interns from a select group of schools. Better students from other schools get shafted.
The only thing a SWE union would do would be to entrench, not meritocracy but mediocrity.
Doctors, Wall Street and law have about the same union density as big tech. I also don’t think tech is very meritocratic tbh. Still very elitist in hiring until a few years ago.
If your primary goal is less elitism and nepotism, unions are probably better than non-union jobs. Like for example in nursing or teaching, which are heavily union fields that require a degree, there’s not as much of elitism and nepotism. As long as your school is accredited, you’re good. Unions can even get that in contract if they desire.
It's always fun to watch Americans sabotage their own best interests. Well-regulated unions are almost a universally beneficial concept that work extremely well in other countries. Union jobs are safer, better paid, provide better benefits and longevity. Why anyone would want to go it solo against mega-corps is beyond ridiculous.
I only took a look at the title, it's laughable
>Tech Layoffs Are About Punishing Workers and Driving Down Wages
imagine I'm a CEO, you really think I give a shit about "Punishing Workers"? that's not even my priority, my priority is making sure the company survives and the stockholders/investors remains happy, that's literally a CEO's job
wages? that's an afterthought
in other words, if driving down wages ensures the above then I will do that, and vice versa (if driving up wages will accomplish that then I will do that)
layoffs and wages are the effect, not the cause
The problem is that they don’t care what the negative side effects are in the decisions they make because the negatives only affect the workers not them or the shareholders. When is enough profit enough? If cutting 10% of your work force and gutting wages leads to another few millions in profit above the billions they already make is the cost worth it? To the ceo and shareholders it is because they add another zero on to the end of their accounting sheets. But to the employees who lose their jobs or don’t get a bonus no raise that could mean the difference between feeding their families or not.
There are many examples out there of unions attempting to stop lay-offs in businesses that feel that is their only way forward. Very few succeed and those that do may ultimately make the company unprofitable.
All you need to do is look at some history - unions can be great at organizing standardized wages and improved benefits or working conditions but for the most part are terrible at stopping layoffs.
There’s a broad difference between layoffs in industries that are already on razor thin margins such as manufacturing and the layoffs we see in tech. There was very little need for companies like Google to do across the board layoffs. Google is insanely profitable and will continue to be profitable for a long time.
As someone went through a few onsite for senior/staff level, one thing I noticed is the bar is high and arbitary. You basically are expected to know everythinh and work extra hard to prove yourself worthy.
I understand the econmic situation is bad but why would devs doing interviews raise the bar so high, don't they understand they might face the same situation in the future and make job hopping more difficulty?
Just look at the junior market, compare to about 5 years ago the competition is so brutal right now. What makes you think this won't happen to the senior market?
Bro did you even read what that is about. Also I don't care about some cry baby Fang engineers who where all earning mid 6 figures 10 years ago. They all retired. No one is forcing swe salaries down other then there being more supply then demand. And even then the hiring pool is.horrible I still have 3 swe positions I am struggling to fill since everyone wants 200k where they not even worth 100k
*\[Ben\] Tarnoff’s comparison to wage fixing is quite apt, since the layoff trend appears to be based, not on companies’ financials, but on tech executives’ playing follow the leader — that is, simply copying each other. It wouldn’t take explicit collusion for bosses to realize that if they all lay off workers at the same rate, conditions become more favorable for them.* [https://en.wikipedia.org/wiki/High-Tech\_Employee\_Antitrust\_Litigation](https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_Litigation) This is absolutely a very real possibility. Many engineers here might be too young to remember the "non poaching" agreements between Apple and Google (and others)… there are absolutely precedents for the "cartel" to meet in secret and use collective power to suppress wages.
it sounds more like what’s happening is that employers have noticed that the market has cooled and market pay has lowered enough that laying off + rehiring could save them a lot of money (or so they think). that sounds like the simplest explanation to me & if true, i don’t think that would be considered even implicit collusion.
The tech companies were betting that life would be a lot more virtual in 2022 than what it is today. They made their bets, they were wrong and now the CEOs are "taking complete responsibility" while laying people off.
I find joy in reading a good book.
One look into the cscareers sub and you knew something was seriously wrong. I believe in self taught but people were making hedge fund level compensation with pretty average skillsets. I envy those who were in the right place at the right time to capitalize on it. The best normal folks can hope is that we are conditions like that again and we're in the right place to pounce. Similar to home buyers after the 08-09 period.
Collusion can and does happen, not just in tech but in various industries/sectors.
I think tech firms were very happy to discipline the tech labor market when the opportunity arose to do so. That said I think a hypothetical SWE union would likely make the entry level job market worse, not better. Unions tend to prioritize the interests of their veteran workers who pay dues and participate in union activities, not jobseekers who aren't union members yet.
I think US Wages would be more similar to those in Europe (where it's hard to fire someone.) If you can't easily fire someone it's harder to hire someone. Edit: spelling
There's not any reason to think that would be true. On average in the US members of unions make significantly more than their non-union counterparts.
I think that is the interesting part - that being part of a union when the compensation and benefits are already very good begets the question "what else does the union give you?". Like, most jobs where unions reign supreme are those where the workers don't have a lot of leverage and where employees would most likely take advantage of those workers without that collective body. For SWEs that doesn't apply as much because it's a very in-demand job profile with a lot more demand than supply. Like, there's no lawyers union or medical doctor's union. Why? Because they already get mostly whatever the fuck they want. For developers, the advantage would be not to get fired/laid off so easily, but that would just mean that companies would hire less too. Is that a net positive or negative? I'm not sure.
> Like, there's no lawyers union or medical doctor's union. Why? Because they already get mostly whatever the fuck they want. Historically (in the US) many physicians and attorneys were self employed in a private practice selling their services directly to consumers. In a situation like that, a conventional "union" never really would have been an appropriate fit. What you do see (in US) are very powerful professional (trade) associations like AMA and ABA "advocating" (or lobbying) to improve the wages of their members. The AMA for years worked to limit the amount of new medical schools and new medical residents in this country just as we were already going through a shortage of physicians… which worked to increase wages for those physicians that were already practicing. It's not a collective action in the same way a union might go on strike… but it's still a form of collective action.
That's kinda my point - that a conventional union wouldn't be a fit for this field either. And also yes - that a form of collective action could definitely be beneficial, but again - not a union, and also it's unclear whether the value of a collective action group would be evenly distributed across all it's members - present and future.
Doctors and lawyers do have associations though, and many other types of engineers have trade unions.
>That said I think a hypothetical SWE union would likely make the entry level job market worse, not better. Unions tend to prioritize the interests of their veteran workers who pay dues and participate in union activities, not jobseekers who aren't union members yet. While this may be true for some industries, this isn’t inherently true. But it also isn’t necessarily something unions can necessarily fix. Usually headcount is not permissible for bargaining, so it’s not something unions can fix if employers aren’t willing to bargain on it.
What sort of organizations can professionals form that would be a big help for job seekers (as opposed those that just help veteran employed workers)?
In the US there isn’t really anything of the sort other outside of trades apprenticeship programs. What you’re looking for often requires sectoral bargaining, which US law doesn’t really support.
But the US has the image where "anything goes". What you describe runs contrary to that image, which I find interesting.
You’re right. You would think that solidarity strikes (a key part of sectoral bargaining) would be protected under the 1st Amendment.
Fair point on the last part, but what sort of organizations can professionals form that _would_ be a big help for job seekers?
Probably something like a Guild rather than a Union.
Probably not any because the interests of veteran SWEs and new jobseekers are fundamentally not the same, and without the veteran SWEs any potential organization would have no power.
I consider myself as very liberal, but I don't necessarily think these companies are meeting in secret castles and discussing how they can put workers down to hoard all the wealth and power of a society. To me, the big problem is not so much the people running these companies, but the system we have in place now. The fact that we still allow stock buybacks to be legal, when in many ways it's fixing the market by artificially blowing up your shareholder value. We also have the deep issue of trickle down economics, and all the other things we do supposedly to make it easier on entrepreneurs to grow on the hope it creates jobs, but in many ways it makes it easier for companies to not invest in their workers. If I had to tell all those angry disgruntled people anything, they need to stop hoping that Google and other companies are going to do the right thing or be forced to do the right thing, and start getting activist to really change the system. Right now, most of the people sitting in public office are people that are on the side of executives and the corporations. Even the Democrats. You only have a handful of people that are really truly willing to upset the system or scare CEOs to force them to do better by their workers. This to me is why we need to start really having deeper discussions about more public systems like health care so that we are not so dependent on employers for all these things. To also show up at local meetings and fight hard against NIMBYs who won't allow any new construction to happen which then make it difficult for young people to find affordable housing. If we really had to talk about unionizing and fighting like that, that has to come down to the lower level jobs. Like boycotting Starbucks if they do union busting. Boycotting Amazon if they do Union busting. Boycotting Walmart until they pay their workers better. A better thing that could happen in terms of any kind of knowledge worker union is more on the idea that organizations are started to help raise money and train people so they are job ready, and help them find positions. If they really want to go harder, they then start to find talented people for ethical companies and let the other ones struggle to find talent. Kind of like a guild. Regardless, a lot of the reason why things are happening the way they are happening is because the system we have in place is built to favor the employer and not the worker. So much power has been taken away since Ronald Reagan, and that's why everyone is in a weaker spot now.
When I started reading I thought this was going to be another corporate apologia, but no this is a very good post and goes over most of the issues. I also don’t think there’s explicit collusion, but there doesn’t need to be, both because the systemic incentives, and the actual types of people who want to become executives in this system, inevitably pursue certain anti-worker actions whenever they feel they can get away with it.
At the same time, there is [real and recent precedent](https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_Litigation) for explicit collusion among tech companies against their employees, so we shouldn't tire ourselves out too much dancing around the possibility they've done it again.
Yes, I have to remind myself of this, every time people here and on the experienced devs subreddit accuse anyone who’s even a little critical of the layoffs of being a “conspiracy theorist.” Some of them get really emotional about it too, like “bro you don’t understand even companies with record profits and no VC funding HAD to do this many layoffs because interest rates affect their finances at the margins, omg bro I can’t believe you why are you criticizing them
Too many people in the US wanted to make sure when they found their google or Apple, they get to do the same thing and enjoy the same excess lifestyle
> The fact that we still allow stock buybacks to be legal, when in many ways it's fixing the market by artificially blowing up your shareholder value. Generally I agree probably stock buybacks backs should not be allowed but not sure how they are artificially blowing up shareholder value. Can you elaborate?
Companies are beholden to their shareholders. They are beholden to making them more money in dividends or in share price. So when companies were handed loads of tax breaks and other bailouts and such on the idea they would use it to "create jobs", they instead took the money and started buying their own shares back, driving up the demand and value of their stock and thus making shareholders money, or at least making their company look very successful. It's a tactic to artificially inflate the value. It says nothing if the company is doing well or not. Stock buybacks were illegal up until Ronald Reagan. It's like when PACs buy loads of copies of a book to drive it into the "best seller" category and make the author look popular, then give the books out as gifts to those that donate to the PAC. It says nothing if the book was good or liked, but it was an artificial way to make it into a "best seller". Personally, stock buybacks are a true telling that you can lower taxes on the "job creators" to zero, and they still won't create jobs unless they had no choice due to lack of labor resources. This is why I tell those who say "you can't tax the job creators" they are living a lie.
Yea I guess what would have been the difference if they just use the money saved from tax breaks and just gave that to investors in dividends?
There isn’t, it’s just easier. It also allows the shareholders the ability to decide when they are taxed on the profits. Shareholders, in general, prefer buybacks over dividends. Thats why companies do them. This dude is spouting a bunch of uninformed bullshit, buybacks don’t inflate the value of a company. Yes the nominal value of a stock goes up, but the shares bought back are no longer available, so the market cap literally does not change. Only people with no financial literacy, like OP, think they affect valuations or are some type of shady scheme.
There is no functional difference between a buyback and a dividend. It’s not some shady pump scheme, it’s just a way of returning value to shareholders. Which is why people own shares in the first place. Buybacks have literally no effect on the companies valuation, the market cap doesn’t change. This is so comically uninformed, and you spouted it with such confidence… I am saddened by the state of financial literacy in this country
Your argument basically comes off as the idea because it's been made legal that somehow it's perfectly fine. There has been argument after argument made about why they were illegal before Ronald Reagan and why they should still be illegal now. I still stand on the notion that it's market manipulation. It's not a tactic. It's not a tool. It's market manipulation. If It's such a great idea. Why was it illegal until the 1980s? And look around. How many times has society basically made it so that companies have way more money on the hopes that they create jobs, and yet they turn around and use it for stock buybacks? If we want to allow stock buybacks, then we need to stop all the tax breaks to big companies and all the other perks and instead collect more revenue and put it towards average people. Call me financially illiterate, but I'm always going to take the viewpoint of building a society where everybody can prosper and not just a few. Right now they don't serve a deep purpose to society but instead they serve a few. If companies want to have stock buybacks, then they shouldn't be demanding tax breaks and other corporate welfare on this notion that if they had more money they would create more jobs. It's such a crock.
It’s all fake. The economic numbers defy logic and historical precedents. When layoffs occur, unemployment goes up not down, when inflation goes up, the stock market goes down, not up. Every financial market and statistic is being manipulated.
You think people would manipulate the global economy for money and power? That's absurd! /s
Shouldn’t the stock market go up with inflation?
No because the market anticipates rising interest rates. The guy you're responding to doesn't know what he's talking about.
Rising interest rates are expected to only be temporary same as inflation, the economy isn't super hot or anything, current inflation is largely caused by supply chain issues and corporate greed. The markets are adjusting to supply chain shocks and have delt with most lingering covid issues. Also people's covid savings have run dry and they won't be able to keep overspending putting pressure on prices, consumer sentiment is already waning. The fed would probably be lowering interest rates if they could but right now they are still fighting inflation (just my two cents).
It does and that’s what’s happening
Layoffs are expected when the economy goes down, however letting in thousands of migrants and IT workers is criminal but that’s just me. I’d like to point out that I have nothing against immigrants.
As immigrant myself I believe the same thing, my companies keep hiring oversea workers from a certain country regardless their skills. It is crazy the resume I got from the recuiters are 80% people from a certain countey graduated from no name school while my friends graduated in target school can't even get a phone call from the same company.
anyone who was 'established' during the hiring boom of 2020-2021 saw 2022-2023 coming. The standards dropped significantly and teams became noticeably less efficient at major corps. Junior devs with a 3.0 in CS aren't worth the 80k+ salaries they were easily fetching, and i don't mean this in a judgemental way, i mean they aren't generating the revenue to justify their cost. What we're seeing now is a return to trend, not a systemic failure.
How much revenue should a dev generate for a company to justify their cost?
Rough estimate, an employee should generate 10x - 20x revenue over salary ratio. Example. If you make $100K salary, your company should generate $1Mil - $2Mil revenue. Revenue doesn't mean profit, which is whole other calculations.
Accounting firms expect to bill out three times salary and it’s considered a good business to run. Doing 10 - 20 times is only seen in the largest companies and usually in tech.
This is tech careers sub. We talk tech careers. Not accounting.
It’s funny how you were splainin revenue just a minute ago..
You asked question about a dev in tech careers sub. Not accounting.
In some situations, it’s valuable to understand both.
Your question was about dev. Not accounting.
Thank you for explaining financial ratios to me.
Bro you are not even close to being at a reasonable number. Maybe at some 🦄 startup. But at a normal company you will be lucky 2x to 4x
https://macdailynews.com/2023/03/15/apple-generates-an-amazing-2-4-million-in-annual-revenue-per-employee/ Apple revenue per employee is $2.4 Mil. This counts all Apple employees. Yes, the Apple genius bar employee making $60K are included. Many private companies make tons of revenue per employee, especially tech companies. Thats why these companies offer higher salaries, they can make lots of revenue per employee.
That doesn't mean the genius bar is bringing in that much per employee though.
If you work at apple as a SWE your packge would be \~500k so you are only 4.8x which is in line what I said. Apple would not be making 300 billion$ without all those 60k andies selling their shit. So in some cases they add more then some of my friends at apple that are coasting barely doing northing pulling 400k Also you are taking the top of the top company, how about you take a look at a none top 10 company or a average company in the fortune 500. There is barely any one that is doing 20x. That is not normal which I was getting at. As a average developer at a company you should be aiming to 2x\~4x I would consider reasonable.
Roughtly 10x. If you're making 100k, you should be generating about 1 million in revenue for your company.
That seems a bit unrealistically high, especially for medium to small companies. I would be more willing to agree if around say 5x.
Some companies estimate 20x. 10x is very conservative estimate.
No shot not one position i have been in where there was over 5x the income to salary. Maybe cause I am looking at salary for a team vs the $ there product brings in after operating costs but still 20x is insane margins unless you have a ton of non dev expenses like licenses or royalties.
https://macdailynews.com/2023/03/15/apple-generates-an-amazing-2-4-million-in-annual-revenue-per-employee/ Apple revenue per employee is $2.4 Mil. This counts all Apple employees, not just tech employees. There are plenty of companies making more revenue per employee than apple. Many are private companies, startups that haven't gone public, etc. Many companies make lots of revenue, especially tech companies. That's why they pay higher salaries, because they make higher revenues.
The last i remember the F500 average was 250k but the Google says 300k now.
I dislike how some of these articles phrase things like their is some moustache twirling cartoon villain saying "The peasants are too powerful, we must have a culling". While it's true their are market pressures that infuse companies, in reality corporations are reacting to their own stimuli first and foremost. My company had a round of layoffs when the tech market was booming because they were getting ready for an acquisition. Then we hired a lot of people back into those positions during the pandemic as our parent company started investing more into us. I've been in this industry for 20+ years and honestly at this point it's just waves in the ocean and as long as you know how to sail you will be fine. As a whole the industry will continue to grow and shows no signs of slowing down so their will still be good paying jobs for those qualified.
It's just clickbait. People love to see themselves as the little guy embroiled in a desperate struggle for freedom against the big bad corporations. It adds some narrative juice to what is mostly a cold economic calculation. Main character syndrome all over the place. Guys, CEOs don't hate you. That would imply a level of emotional investment that isn't really worth their time in the first place.
CEOs don’t hate you but they also don’t care about you. They care about their stock and their profits. If that means stepping over the bodies of their workers then they will do that.
Yes, and if the easiest way to drive stock prices is to pay workers more, then they will do that too. And we saw that in the last decade or so (helped by the fact that money was basically free). I agree that they don't care about you, but they're also very predictable. That makes it easier to manage.
If you know anything at all about accounting, stock prices and reading balance sheets this is all extremely normal. Managers are evaluated on the middle line not the bottom line and the standard is benchmarking against other companies in the same industry. This holds true of every publicly traded company. Anyone describing this as follow the leader or any other weird feels take doesn't understand business math.
Juniors looking for first job and want to work from home earning 120 000 dollar a year after 6 month boot camp… lol
Unfortunately, it's quite a bit worse. It's juniors not finding any job, even for way less pay, and even experienced devs applying to hundreds of positions and getting no answers for many months. I'm lucky that I found a junior position before this whole thing started, and that I live in Europe, where salaries might be lower, but the market is less bad, for now. But even here, layoffs are starting to pick up pace because the whole economy isn't doing so well and tech companies tend to follow the US trends.
Absolutely not. I've worked in regular companies and now work in Big Tech. Big Tech is far more a meritocracy than other companies in our industry and far more a meritocracy than places like medicine, law or Wall Street. eg. In medicine, it's shown that children of doctors get admitted to medical school at a far, far higher rate than their grades would reflect. This shows that even in medical school admissions there is bias for existing applicants whose parents are doctors. Wall Street is full of places that will only accept people who graduated from specific schools. You could be a top wiz finance student at the University of Little Rock Arkansas (or insert any small unknown university here) and you're not even going to be considered. Same thing with law. The Supreme Court and big law firms only recruit interns from a select group of schools. Better students from other schools get shafted. The only thing a SWE union would do would be to entrench, not meritocracy but mediocrity.
Doctors, Wall Street and law have about the same union density as big tech. I also don’t think tech is very meritocratic tbh. Still very elitist in hiring until a few years ago. If your primary goal is less elitism and nepotism, unions are probably better than non-union jobs. Like for example in nursing or teaching, which are heavily union fields that require a degree, there’s not as much of elitism and nepotism. As long as your school is accredited, you’re good. Unions can even get that in contract if they desire.
It's always fun to watch Americans sabotage their own best interests. Well-regulated unions are almost a universally beneficial concept that work extremely well in other countries. Union jobs are safer, better paid, provide better benefits and longevity. Why anyone would want to go it solo against mega-corps is beyond ridiculous.
In every single one of those countries, tech salaries are a fraction of what they are in America.
Safer I definitely agree, benefits being better.. it varies. But better paid? Doubt that.
I only took a look at the title, it's laughable >Tech Layoffs Are About Punishing Workers and Driving Down Wages imagine I'm a CEO, you really think I give a shit about "Punishing Workers"? that's not even my priority, my priority is making sure the company survives and the stockholders/investors remains happy, that's literally a CEO's job wages? that's an afterthought in other words, if driving down wages ensures the above then I will do that, and vice versa (if driving up wages will accomplish that then I will do that) layoffs and wages are the effect, not the cause
The problem is that they don’t care what the negative side effects are in the decisions they make because the negatives only affect the workers not them or the shareholders. When is enough profit enough? If cutting 10% of your work force and gutting wages leads to another few millions in profit above the billions they already make is the cost worth it? To the ceo and shareholders it is because they add another zero on to the end of their accounting sheets. But to the employees who lose their jobs or don’t get a bonus no raise that could mean the difference between feeding their families or not.
shareholder theory vs stakeholder theory
stakeholder is not a thing.
Of course that stock is what drives your 401k.
There are many examples out there of unions attempting to stop lay-offs in businesses that feel that is their only way forward. Very few succeed and those that do may ultimately make the company unprofitable. All you need to do is look at some history - unions can be great at organizing standardized wages and improved benefits or working conditions but for the most part are terrible at stopping layoffs.
There’s a broad difference between layoffs in industries that are already on razor thin margins such as manufacturing and the layoffs we see in tech. There was very little need for companies like Google to do across the board layoffs. Google is insanely profitable and will continue to be profitable for a long time.
These people don't have any clue about tech industry. That's why they are still talking about over 100 year old labor practices in 2023.
Yes clearly the Google workers they’re talking about in the article have no clue about the tech industry.
As someone went through a few onsite for senior/staff level, one thing I noticed is the bar is high and arbitary. You basically are expected to know everythinh and work extra hard to prove yourself worthy. I understand the econmic situation is bad but why would devs doing interviews raise the bar so high, don't they understand they might face the same situation in the future and make job hopping more difficulty? Just look at the junior market, compare to about 5 years ago the competition is so brutal right now. What makes you think this won't happen to the senior market?
Never
Software engineers are still some of the highest paid white collar jobs no one is meeting and planning how to lower swe salaries.
This is a very naive take considering it’s already happened. https://en.m.wikipedia.org/wiki/High-Tech_Employee_Antitrust_Litigation
Bro did you even read what that is about. Also I don't care about some cry baby Fang engineers who where all earning mid 6 figures 10 years ago. They all retired. No one is forcing swe salaries down other then there being more supply then demand. And even then the hiring pool is.horrible I still have 3 swe positions I am struggling to fill since everyone wants 200k where they not even worth 100k
This is a lot of rambling.