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Ask HN: What is the current driver of tech layoffs?

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Re: Ask HN: What is the current driver of tech layoffs?

#81

Post by intunderflow »

adamzochowski wrote: post #74
fritzo wrote: post #63

Earlier quoted context omitted.

IIUC, whereas previously companies could deduct salaries in year Y from revenue in that same year Y, now section 174 allows deduction of only 1/5 of those salaries in each of the 5 years [Y,Y+1,Y+2,Y+3,Y+4].

This is for specific R&D costs, like doing something patentable. Most developers are not doing R&D. Most developers are fixing bugs, helping sales, keeping systems online, keeping up to date on patches, performing security scans, complying to some internal policies.

No it's not.

https://www.law.cornell.edu/uscode/text/26/174

> (3)Software development For purposes of this section, any amount paid or incurred in connection with the development of any software shall be treated as a research or experimental expenditure.

Re: Ask HN: What is the current driver of tech layoffs?

#82

Post by blurbleblurble »

The US Fed monetary policy has everything to do with it. Money is especially valuable right now. As well as the proliferation of new "AI" tools that increase worker productivity by 10x-1000x.

Between the Fed tightening demand and the AI tools simultaneously heating up supply (productive output), it's no surprise these layoffs are happening.

Re: Ask HN: What is the current driver of tech layoffs?

#83

Post by jacknews »

blurbleblurble wrote: post #82

The US Fed monetary policy has everything to do with it. Money is especially valuable right now. As well as the proliferation of new "AI" tools that increase worker productivity by 10x-1000x. Between the Fed tightening demand and the AI tools simultaneously heating up supply (productive output), it's no surprise these layoffs are happening.

I don't think AI has much to do with it. The fear/expectation of AI, perhaps.

But the rest is definitely Fed policy; they specifically said they wanted to cool wages, and I think maybe in cahoots with shareholders - remember that guy bleating about google employees earning $200k+, and that it 'should' be more like $100k if they're lucky and BTW, give the resulting increased profits to us shareholders.

Re: Ask HN: What is the current driver of tech layoffs?

#84

Post by Mouse47 »

forward1 wrote: post #54
fullshark wrote: post #41

Earlier quoted context omitted.

"Your average colleague is an idiot" is never an unpopular opinion among tech workers. "You are average," now that is unpopular opinion.

“Think of how stupid the average person is, and realize half of them are stupider than that.” ― George Carlin

That only applies to the median, not the average. Every time I see this quote I can't help but think that. Funny tho

Re: Ask HN: What is the current driver of tech layoffs?

#85

Post by plorkyeran »

leetharris wrote: post #58
fullshark wrote: post #41

Earlier quoted context omitted.

"Your average colleague is an idiot" is never an unpopular opinion among tech workers. "You are average," now that is unpopular opinion.

> "Your average colleague is an idiot" is never an unpopular opinion among tech workers. I actually don't hold that opinion because I think a lot of these people are actually pretty smart! They just aren't oriented to be tech experts. They are really talented at some other thing in life, but ended up in tech chasing the salaries.

Yeah, that's something I've noticed. I've worked with a few people who were brilliant and really good at something, but that something wasn't writing software. Even the people who are frustratingly bad at their jobs have rarely made me think they're idiots. They're just not very good at the specific thing they're being paid to do.

Re: Ask HN: What is the current driver of tech layoffs?

#86

Post by nradov »

Mouse47 wrote: post #84
forward1 wrote: post #54

Earlier quoted context omitted.

“Think of how stupid the average person is, and realize half of them are stupider than that.” ― George Carlin

That only applies to the median, not the average. Every time I see this quote I can't help but think that. Funny tho

Median is one type of average.

Re: Ask HN: What is the current driver of tech layoffs?

#87

Post by SirensOfTitan »

Outside of the obvious mentions, including section 174 changes, I think that layoffs have caught on like a contagion and a bunch of mediocre managers and executives are borrowing from an outdated 80s layoff playbook.

The reality is that layoffs disconnected from a larger strategy (like discontinuation of a product line) are typically disastrous and highly predictive of underperformance relative to companies that didn’t perform layoffs. What typically happens is companies hire back the folks they let go very quickly with a huge dent in morale long term.

The concerning thing at this point is that general layoffs are so in vogue that they’re depressing tech wages. Few executives actually take any real responsibility for their overhiring either, the best you usually get is some generic I’m sorry followed by fat bonuses.

Re: Ask HN: What is the current driver of tech layoffs?

#88

Post by ryanSrich »

analogwzrd wrote: post #52
megaserg wrote: post #18

Gergely Orosz's theory[1]: > An IRS tax code change in Section 174. This change eliminates the ability for businesses to deduct R&D as an expense. > Hear of lots of layoffs directly because of this, as a start. [1] https://twitter.com/GergelyOrosz/status/1735030983173230944?...

What does the average company spend on R&D percentage-wise? My old company was a contract engineering company, so they always tried to staff everyone possible on projects being paid for by customers. R&D was used to develop internal tech and build expertise on new technologies so it was only maybe 10-25% of most engineer's timesheets. Do other tech companies spend that much more on R&D?

From what I recall, the tax credit is used for products that aren't yet available to the market.

So let's say a company needs 5 years to build some new hardware. Those 5 years of labor and expenses are all R&D.

I think that's why this is such a big deal. I could be wrong though.

Re: Ask HN: What is the current driver of tech layoffs?

#89

Post by gumballindie »

blurbleblurble wrote: post #82

The US Fed monetary policy has everything to do with it. Money is especially valuable right now. As well as the proliferation of new "AI" tools that increase worker productivity by 10x-1000x. Between the Fed tightening demand and the AI tools simultaneously heating up supply (productive output), it's no surprise these layoffs are happening.

> increase worker productivity by 10x-1000x.

Huh?

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