Nearly 25,000 tech workers were laid off in the first weeks of 2024. Why is that?::undefined

  • @nihilvain@lemmy.mlEnglish
    20•5 months ago

    As others stated a small portion of that was due to over-hiring, some to follow the layoff trend and some to make the earnings call look good.

    But from what some experts are saying; there’s also another factor, which is even worse.

    There’s a looming threat of a recession hitting in a few months (which is said to be a much bigger recession than the post-Covid one). And this recession will be tied to the Commercial Real-Estate Bubble.

    They are saying that it will be like the 2009 Mortgage Crisis and will be very disruptive.

    There’s this theory that companies are reducing their headcount to prepare for this recession by reducing their expenses to the minimum. Which makes sense.

    For the companies without savings that is a must but the ugly part is that you see big names with huge amounts of money in the bank laying off people as well.

    Well, because they don’t want to invest that money on the people, they will use all that money to buy smaller companies when the recession hits. All big tech with enough money in the bank is rooting for the recession to happen so they can buy everything for very cheap and grow even more.

    • @AA5B@lemmy.worldEnglish
      8•5 months ago

      I don’t get how there’s any connection. Sure, it sucks to own commercial real estate, or be one of the service companies that grew up to support office work, but isn’t the whole problem being that tech and other large companies no longer want to pay for that? This should be a bonanza for tech companies, saving billions of dollars that formerly went toward renting office space. Why aren’t we expecting a tech company boom?

      • @ricecake@sh.itjust.worksEnglish
        4•5 months ago

        The anticipation is not that it’ll hurt the tech companies, but the economy as a whole. A generalized economic slowdown impacts everyone, even if you specifically benefited from it.

        If I could tell you exactly how it’ll unfold, I’d be using that to make a lot of money instead. It’s not even certain that it will happen.

        Commercial real estate was for a long time a roughly predictable investment, and profitable.
        Now profitability is severely reduced because people, including tech companies, are cutting their usage.
        If the market collapses, it’s unclear how far down it’ll drag the economy, so companies are bracing for it to be bad.

      • @Takumidesh@lemmy.worldEnglish
        13•5 months ago

        There has been a fud, fear mongering, excuse providing ‘looming recession’ every single time things are going kind of ok.

      • @kameecoding@lemmy.worldEnglish
        4•5 months ago

        I think there is a bigger chance of people starting to default on their student debts and on their stupid car loans than the commercial real estate alone causing anything.

        You can literally just convert office buildings into apartments if you want.

        • @fishpen0@lemmy.worldEnglish
          11•5 months ago

          As much as I think commercial real estate is minimally linked to the rest of the economy, it’s been well established that you can’t just convert office buildings to apartments.

          Floor plates aren’t cut to manage the changes to the floor plans in some cases not even being designed to carry the weight as modern office buildings often utilize floating plates so adding more walls actually would cause all kinds of issues with the walls as the building wobbles around. The plumbing doesn’t have the capacity and also is centralized in the buildings despite apartments each needing it, requiring more alterations to the floor plate. The windows requirements for bedrooms leaves most of the central space of the building unusable or everyone has kitchens and living rooms with no windows…. It’s often cheaper to demolish the building and start over than it would be to modify it.

          To get a real idea of this look at apartment buildings in manhattan. They are either long and skinny towers or they are the size of a block, but have a massive quartyard running down the middle where office buildings are solid all the way through.

    • @AccmRazr@lemm.eeEnglish
      1•5 months ago

      I think another thing that isn’t being talked about with these layoffs, which would call for more unionization and policy making, is that “AI” is taking over these jobs.

      Also when companies merge, there are “redundant” employees. So like the recent Microsoft layoffs, those were going to happen.