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

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

#161

Post by opportune »

programmertote wrote: post #152
PragmaticPulp wrote: post #68

Earlier quoted context omitted.

In this case, rising interest rates have a very direct negative impact on new investments. As new investments contract, demand shrinks for services across the industry. As demand shrinks, fewer employees are needed and companies need to reduce headcount to avoid overspending relative to revenues. There is a cascading effect, but it would be a mistake to attribute it all to a big psychological mistake. When demand goe…

> As new investments contract, demand shrinks for services across the industry. As demand shrinks, fewer employees are needed and companies need to reduce headcount to avoid overspending relative to revenues. As someone who has only taken Econ 101 in college, can you explain 1) why the demand shrinks when there's not enough new investments? Shouldn't demand at least be the same overall (I mean I can see that fewer ne…

New investment is things like making buildings, investing in VC, making new machines for manufacturing. Those are funded by cash or loans. When interest rates rise more cash goes to seeking interest and less toward these physical investments, and less money is created de novo from loans to fund these things.

It’s worth keeping in mind that money spent on new buildings and machines goes to wages of employees building them, which then goes to rents and food, and elsewhere throughout the economy.

For 2, yes and no. A lot of workers are employed doing things with low or speculative marginal ROI (example: Coca Cola starts funding R&D into a new line of beverages) because the cost of capital (taking a loan against cash flow or spending earnings on reinvestment instead of returning it to shareholders) is low. Increasing interest rates increases the cost of capital, the risk feee opportunity cost of spending money on more speculative pursuits like R&D. So now Coca Cola might instead choose to return that money to shareholders or not take out financing to start operations like that

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

#162

Post by amf12 »

programmertote wrote: post #152
PragmaticPulp wrote: post #68

Earlier quoted context omitted.

In this case, rising interest rates have a very direct negative impact on new investments. As new investments contract, demand shrinks for services across the industry. As demand shrinks, fewer employees are needed and companies need to reduce headcount to avoid overspending relative to revenues. There is a cascading effect, but it would be a mistake to attribute it all to a big psychological mistake. When demand goe…

> As new investments contract, demand shrinks for services across the industry. As demand shrinks, fewer employees are needed and companies need to reduce headcount to avoid overspending relative to revenues. As someone who has only taken Econ 101 in college, can you explain 1) why the demand shrinks when there's not enough new investments? Shouldn't demand at least be the same overall (I mean I can see that fewer ne…

> why the demand shrinks when there's not enough new investments?

The way I understand it: when interest rates increase, the ROI for any investment goes down, which makes many new investments risky or worthless. Thus investments in new projects go down, which reduces the demand. The investment could be a new shop, raw materials for new buildings, software projects, etc. When it's said the "demand" decreases, its not the want that goes away but the ability of people to realize the want that goes away.

> if demand does not shrink by much, shouldn't the same number of workers be kept employed to fulfill the demand for goods?

Depends. If the cost of doing business rises, the profit decreases. To maintain value, there could be a decrease in headcount increase or layoffs.

> it means the economy is heavily reliant on industries/sectors which relies on new investments (aka growth)

I think (and someone who is more aware can correct me), it boils down to the ROI. Why would any business investment in something with risk when the ROI doesn't make it worth it. If the risk-free interest rate 5%, any investment with a ROI of say 7% or below (higher for riskier investments) are out of the question. Any entity could make money by saving at the risk free rate.

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

#163

Post by JumpCrisscross »

im-a-baby wrote: post #147
JumpCrisscross wrote: post #135

Earlier quoted context omitted.

> Let's say I have a goal of running a marathon, so I decide to start jogging every day. Is my daily jogging a side-effect of my goal to run a marathon? You can't run a marathon without your daily jogs. Inflation can be lowered without spiking unemployment. It's unlikely. Hence the Fed's messaging. But until recently the Fed forecasted a soft landing, i.e. growth and low unemployment amidst rising rates and falling i…

Using analogies is always dangerous because they're never going to be a perfect fit. But the difference between your engine analogy and the federal reserve's actions is that anemic economic growth and high unemployment is not a side effect. In your engine analogy, adding more gas and air into the engine increases the amount combustion. It's the combustion that increases speed, so in a sense increase combustion is a g…

> amount of economic activity and the amount of available labor are what drive prices

The relationship is sufficiently complex to permit e.g. falling unemployment, falling (not negative) wage growth, falling (including negative) growth and falling inflation. It's not a deterministic system.

> in a sense increase combustion is a goal

No, it's not, because the goal--reaching the destination quickly--would be accomplished equally well in an electric car with no combustion. That's the difference between a goal and an effect.

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

#164

Post by Clent »

ethbr0 wrote: post #143
frontiersummit wrote: post #129

Earlier quoted context omitted.

This puts it mildly. Paul Volcker has been (perhaps unfairly) called the Father of the Rustbelt, due to how rising interest rates broke the back of manufacturing in the American Midwest during the late 1970s and early 1980s. "Cooling" the economy means layoffs and plant closures, often concentrated in specific geographic regions. The only question is: what firms and employees get sacrificed to placate the inflation G…

Rising interest rates & a strong dollar Ironically, you can generally have your financial house in order as a country or be globally manufacturing-competitive, but not both*. * Exceptions Germany, Japan, et al., but as you go up the value chain you gain enough profit leeway to paper over the general rule.

Why are those countries the exception and not America?

Other countries figure it out. America cannot. Therefore, it's not possible. America!

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

#165

Post by dilyevsky »

xeromal wrote: post #134
bryanlarsen wrote: post #43

Tesla was one of the first big tech companies to start this cycle, announcing a 10% layoff in June. Now they're hiring at a rapid clip. https://insideevs.com/news/617007/tesla-hiring-boost-after-l...

Didn't they layoff a lot of labelers after they felt confident in their auto labeling?

I’ve never heard of labeler ftes but nothing about tesla would or should surprise me at this point

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

#166

Post by lysecret »

4gotunameagain wrote: post #11

Ask HN: Isn't recession just mass hysteria ? Layoffs leading to more layoffs leading to the entire economy slowing down ?

Nothing is "just" one thing. But the there is a reinforcing effect which definitely makes it worse. You can check out "animal spirits" and Keynes if you want to go down a rabbit hole ;)

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

#167

Post by dilyevsky »

spaceman_2020 wrote: post #35
SevenNation wrote: post #26

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, cand…

CS was already a popular bet among incoming college students, but the memory of the manic 2020-21 period have fuelled a vast flight of talent to CS majors, at least in my country. Everyone is convinced that the only way to make any real money fast is to learn how to code. The expectations are absurd - most expect to make doctor-tier salaries right after graduation (source: wife teaches at university). By 2024, the st…

> In short: downward pressure on programmer wages.

Entry level programmers maybe - lets see how many can actually stick around past first midterm

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

#168

Post by ChrisMarshallNY »

tqi wrote: post #126
ChrisMarshallNY wrote: post #32

Anyone that was around for the "Turn of the Century Crash" may find this familiar. With all the massive scaleups, companies were becoming bloated as hell. They also became fairly sloppy with their money. Time to pay the piper. But unlike some bubbles, there's a real industry, here (like in the 'oughts). It's a return to a [still pretty decent] baseline, as opposed to an implosion to nothing. In the early Web days, th…

Oh awesome, would love to ask a few questions about your experience: 1. What did it feel like day to day as a person working in the industry during that time, and did it differ from the "bubble" period prior or more "normal" period immediately following? 2. How long after the bottom before the recovery felt "real" to you, and did you see companies / people change their behavior?

1. During the time, as was alluded, I was watching all these folks I knew were knuckleheads, getting all "tech-bro" (That is not a new thing). They would often treat me in fairly shabby fashion, for not jumping on their bandwagon.

I did get pretty good at Web stuff, but as a volunteer side gig. I've actually been designing Web sites since the mid-'90s, but I never made it a full-time vocation.

2. I think it was about five years, before the next bubble began to form, as Google started getting big. 2007, was when smartphones showed up (the iPhone). That changed everything, but it took a few years, to really become ubiquitous.

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

#169

Post by sangnoir »

datalopers wrote: post #18
jstx1 wrote: post #3

Where are we heading if every company drop 10-20% of their staff?

All these companies have vastly overhired. Think of your own peers and colleagues. How many are a) utterly useless or b) competent but don't have anything to do so they spend time working on mostly pointless projects to improve their CV?

Fundamental attribution error: how many of your colleagues think the same of you? When it come to you, obviously the problem is the "complixities of the problem space" and "blockers" you're dealing with, but when it's someone else on some random team, they are slow because they are useless.

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

#170

Post by yonaguska »

paganel wrote: post #106
4gotunameagain wrote: post #11

Ask HN: Isn't recession just mass hysteria ? Layoffs leading to more layoffs leading to the entire economy slowing down ?

I don’t know about “mass hysteria” but this inflation has certainly made me purchase less physical stuff and especially less services, I guess I’m not the only one. Generally speaking a sudden decrease in buying is cause for a recession, unless you go the Keynesian way and make the Government make up for the lost demand, but I have a feeling that most of the governments are out of “good” money to throw at that. I do…

I believe it's probably worse for you in Europe simply because of the energy costs eating up more of your income. Energy costs are going up here as well, but it seems to be more dependent on where you live and less dramatic for now.
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