Lyft to lay off about 700 employees in second round of job cuts

Is it mass hysteria, or returning to the mean after a decade+ of mania?

On the other hand, companies use recessions to cut headcount without causing the people they want to keep to head for the exits too.

This is what the other side of a hiring blitz looks like. On the ascent, company after company speculatively hired extremely expensive workers - because the surface economic signals were misleading people who should have known better. There was so much money to throw at employees that offers were being extended just to keep candidates away from competitors.

This went on so long and with such fury that employees, candidates, and CS students began to view the orgy of overspending as the new normal.

Now a normalization of economic conditions throws the entire thing into reverse. Too many fresh-faced candidates showing up with resume in hand, too many workers on payrolls doing little to nothing for wages 3-10x what they should be, too little revenue to continue business as usual, and a stock market that pulled the rug out from public companies using shares as a form of self-printed currency.

>Winter is coming.

Pressing X to doubt. Many of these companies did layoffs during the pandemic (like Lyft) - which in many cases were just an excuse to cull low performers - then just continued to grow at insane paces. Even these layoffs just put them back at pandemic-level figures.

Call me when companies are smaller than they were even before the pandemic, let alone crashing and burning.

Powell has previously said that he wants higher unemployment. He believes this is the only way to decrease demand and bring down prices.

> The labor market continues to be out of balance, with demand for workers substantially exceeding the supply of available workers. The labor force participation rate showed a welcome uptick in August but is little changed since the beginning of the year. FOMC participants expect supply and demand conditions in the labor market to come into better balance over time, easing the upward pressure on wages and prices. The median projection in the SEP for the unemployment rate rises to 4.4 percent at the end of next year, ½ percentage point higher than in the June projections

> We’re never going to say that there are too many people working, but the real point is this: Inflation—what we hear from people when we meet with them is that they really are suffering from inflation. And if we want to set ourselves up, really light the way to another period of a very strong labor market, we have got to get inflation behind us. I wish there were a painless way to do that. There isn’t.

That is why the market goes down when low unemployment numbers are released. Powell will continue to raise rates until the labor market cools. He's not using the labor market to determine whether or not the economy can handle more rate increases. He's absolutely determined to increase unemployment via rate hikes.