It is interesting the layoffs we're still seeing, despite such a good year on the market. The recent Spotify layoff just seems to put that even more into focus. What's REALLY driving these layoffs? Investor expectations? Anticipating AI redundancy/efficiency? Or, some combination?
It was doing great yes, but even better since layoffs. That’s why.
Wallstreet loves layoffs!
Capitalism is greedy.
Yes, but it has to make sense. Usually you cut because you either have to, to stay alive or because you don't see an opportunity to grow any more. The other two possibilities in this climate would be: (i) CEOs being hyper-reactive in the Silicon Valley echo chamber (everyone else is doing it), or (ii) because there's a perception they won't need as much staff in the not-too-distant future, due to AI.
It probably does make sense. They've probably stopped growing and have no more tricks to play. The CEO is probably looking to bail out and wants his own personal stock to skyrocket before selling. He doesn't care what happens once he leaves.
Maybe I'm being paranoid when I say this but I worry that AI code generation is getting a lot better, very quickly. GitHub Universe for example, is going to be a game changer for a lot of companies. And while a primary use case of AI right now is to test/verify code, we may already be at a place where the tables turn and AI writes the code and Engineers merely validate. If thats already where we're at, i could imagine the right mix of greed and tech savvy would see huge efficiency gains around the corner and think to go ahead and cut ~20% of staff while they have cover to do so, anticipating +50% productivity just around the corner (save a ton of money with no downside to producitvity). Am I crazy for thinking this is the calculus behind the scenes?
lol.
First layoffs occur then stock drop always happens this way
No but in this case - they're doing a huge laoff, AFTER a major market run up. Okay, maybe prior layoffs helped partially lift the stock? Regardless though, stock is looking great right now. Hard to make the argument layoffs right now are due to financial need.
Layoffs are due to a company not being able to make as much money via bond floats due to higher rates….
interesting. i thought spotify would increase their headcount cause there's so much ai stuff you can do with audio. i guess they just wanna be a music catalog then
Thank McKinsey
Layoff and rehire in India for more profit margins. No reason to overpay for whiny Americans.
Companies do layoffs primarily to appease to the investors assholes. Laying off people has the characteristic of reducing cost in the short term, it pretty much saves the company some chunk of change in costs, hence increasing profit and therefore increasing the company's financial metrics which investors like. But since investors are f#cking idiots with money in the most part they don't see the long term effects that doing layoffs reduces productivity in the company due to low morale, increases regretted attrition, competitors that don't do layoffs see more hiring, etc. With fast solutions come slow problems but most companies being ran by clueless idiots rather take the easy way out of doing layoffs to increase metrics rather than actually going in depth as to why a company isn't doing too good. It's basically like cutting the leaves of an infected flower instead of just cutting the root, corporate america and rich people are just a bunch of greedy idiots and like always is the little guy that loses, that's just the world we live in today.
Because, It’s calm before a storm…