Ask HN: Why are big tech companies having mass layoffs?

Cuz a recession is coming and companies are trying to get ahead of it and also playing into it. Also a good time to trim and shutdown entire projects or departments and call it a “layoff”.

But really you can also ask: Why did tech companies hire like 3-4x the amount they are laying off in the last 2-3 years? Why are they mass hiring? The inverse reason is usually why there are mass layoffs.

Irrespective of the real reason, I don't buy the argument that these companies are preempting a recession.

Facebook, Amazon, Alphabet, Apple, Microsoft have an insane volume of cash reserves to the tune of hundreds of billions each company.

Unless their are predicting a decade long crisis there is no way this is the real reason staff is getting trimmed, feels more like an excuse rather than a justificatíon at this point.

What is the distinction between excuse and justification for a public company? We always know their motive, which is to maximize profit. If they believe growth is going to slow/end, then it makes sense to slash some people. An occasional culling seems like a healthy thing for a huge company to do. If we knew how to predict future needs perfectly and how to hire quality people perfectly, then sure we could avoid this, but that is impossible.

Amazon, Shopify, Wayfair, Google, Meta: all of these companies make money because e-commerce exists. The higher the proportion of all sales taking place on e-commerce, the more valuable the companies are. For Google and Meta, it's the advertising portion, but it's still impactful.

If we track online sales as a proportion of all sales over the last 20 years, there's a pretty stable trend of increase. Then COVID hit, lockdowns, and we saw a 5-6 year jump ahead. Big question: How much of this is temporary, and how much is permanent? Maybe people discover that grocery delivery is way better than going to the store and never stop.

Imagine if you bet against it being permanent, and you were wrong? Your company just lost out on a massive opportunity- a CEO that does that would be worried for their job. And if you bet for it being all permanent and are wrong, well, you just have to lay off a few people.

They all bet that this was a permanent 5-year jump-ahead. They were wrong, there was no jump-ahead. Now there's a looming recession. Everyone has too much headcount. And for publicly traded companies, there are shareholders who will demand that something be done to prove you're not going to bankrupt the company.

To minimize the PR hit, everyone quietly announces their layoffs just after someone bigger than them does, so that they aren't the headline in the news tomorrow.

That some orgs overhired is not in question. What is _insane_ to me is that everyone being let go seems to be an engineer, while the DEI teams remain untouched. That section of the office sure seems to have a lot of free time, between shaming the rest of the company.

Shows the power hierarchy I suppose. Wild world.