Comment by alephnerd
6 hours ago
> I'm convinced that these "AI Layoffs" are these companies trying to save face from the absurd overhiring that they did in 2022 and 2023 because apparently they thought that these no-interest loans/free money would just last forever.
Partially.
The first nail in the coffin was the change in assumptions around output. Before 2023, there was an assumption that more bodies means more output. After the massive X/Twitter layoffs (60-70% headcount culled) with X/Twitter still standing, this assumption was clearly proven false.
The second nail was the change in operational metrics. Before 2023, ARR growth was a good enough metric to target. After 2023, FCF positivity became the name of the game. Especially because us investors are demanding this because most funds are reaching the 10 year mark where we need to make our LPs whole, so a path to exit (be it IPO, M&A, or a continuation fund) needs to be communicated.
And finally, COVID proved to a large number of companies and industries that 100% WFH and Async for white collar roles does work. But wait, if I can hire Joe in Cary to work async, why can't I hire Jan in Karlin, Prague or Jagmeet in Koramangla, Bangalore? This means I can also enhance FCF positivity while not impacting delivery.
Add to that some very, very, very bad hires (most bootcamp grads just can't cut it) at absurdly high salaries and that's why you're seeing the culling that is occurring today.
That said, AI tools are powerful, and if you are working on rightsizing an organization, using Claude or Enterprise GPT in workflows helps one person do multiple jobs at once. We now expect PMs to also work as junior program managers, designers, product marketers, customer success managers, and sales engineers and we now expect SWEs to also work as junior program managers, designers, docs writers, and architects. Now I can lay off 10-20% of my GTM, Designers, SWEs, Program Managers, and Docs Writers and still get good enough output.
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IMO, if you want to survive in the tech industry in this world, doing the following will probably help maintain your longevity:
1. Move to a Tier 1 tech hub like the Bay and NYC. If you get laid off, you will probably find another job in a couple of weeks due to the density of employers.
2. Start coming into the office 2-3 days a week. It's harder to layoff someone you have had beers or coffee with. Worst case, they can refer you to their friends companies if you get laid off
3. Upskill technically. Learn the fundamentals of AI/ML and MLOPs. Agents are basically a semi-nondeterministic SaaS. Understanding how AI/ML works and understanding their benefits and pitfalls make you a much more valuable hire.
4. Upskill professionally. We're not hiring code monkeys for $200K-400K TC. We want Engineers who can communicate business problems into technical requirements. This means also understanding the industry your company is in, how to manage up to leadership, and what are the revenue drivers and cost centers of your employer. Learn how to make a business case for technical issues. If you cannot communicate why refactoring your codebase from Python to Golang would positively impact topline metrics, no one will prioritize it.
5. Live lean, save for a rainy day, and keep your family and friends close. If you're not in a financial position to say "f##k you" you will get f##ked, and strong relationships help you build the support system you need for independence.
The reality is the current set of layoffs and work stresses were the norm in the tech industry until 2015-22. We live in a competitive world and complaining on HN does nothing to help your material condition.
The Twitter layoffs being used as proof of _anything_ is misguided no matter what you're trying to say.
If success is losing half their revenue, reverting to revenue numbers from a decade ago, I gotta know what failure looks like. You might argue that the revenue losses aren't correlated to their headcount changes and probably make a good argument, but I mean... It's not a great one
Everyone predicted twitter would crash and burn within months of the layoffs.
It didn't.
Anyone who has worked at a large company knows that 1/2 the staff there is stuck keeping the lights on because it is easier to hire a warm body than fix tech debt.
I've worked at companies that are literally 10x more effective than other competitors in the market purely due to good engineering practices.
Even within large companies, you can have orgs that are dramatically more effective than others, often due to having to work under just the right set of resource constraints. Too little and no investments in the future, too much and it becomes easiest to build fast and hire people to duct tape the mess that is left behind.
You and the poster above disagree about the state of Twitter.
Twitter had been a growth company, it was early/missed the market with Vine, but was showing ad growth.
Now, as a private company, backed by the world's richest man, sovreign wealth funds, and banks that have written down their stakes, it has different economics than a tech / growth company.
It's ad revenue is now, not in the ballpark of the fortune 500 or trendy Instagram ads, but somewhere between reddit and sin site markets.
> Everyone predicted twitter would crash and burn within months of the layoffs.
It did, just not obviously. Twitter used to be the store brand social network, vanilla and reliable but not overly obnoxious. It made good money from brand advertisers like Ford, General Mills, and Sony. City governments felt ok with using it to distribute community information. The platform tried its hardest to stay middle of the road and not let things sway too far one way or the other.
Today it is a real time bidding marketplace for changing public discourse. You simply buy blue checkmark accounts in bulk and spread your message free of any content moderation or safeguards. So the Chinese, Russians, and Saudis can get into a bidding war over what rural whites believe to be fact.
With the ad revenue sharing program you don't even need to write the content anymore (one of the biggest things foreign influence campaigns struggle with). Just find someone who is saying the "right" thing already and promote them. Twitter in turn underscores the authenticity of these voices by adding "transparency" features that list where someone is from - because your average person does not know a damn thing about proxies.
He's a VC now. That's how they think
Really? Revenue loss was pretty directly tied to Elon replying and supporting some "jews vs whites" type posts in Nov 2023.
That caused Apple, Coke, and many other large clients to stop advertising.
My understanding is that Twitters revenue was
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Elon very publicly killed brand safety efforts. Advertisers care a lot about the context that their ads appear in.
That would be the good argument, yes.
Mo biggie on revenue loss. They axed most of their staff and went from 2k devs to 30. Trade off seems fine
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I've never seen the motivation behind buying Twitter to have been revenue, or free speech for that matter. Elon wanted a unique content source to train LLMs on and he got it. Whether that proves out as a good training dataset is still up in the air, but I can't imagine he cared about Twitter revenue.
This is not even intended for the LLM training use case. it is an afterthought use case. He installed a president who he can use. Twitter acquisition helped him achieve this.
> After the massive X/Twitter layoffs (60-70% headcount culled) with X/Twitter still standing, this assumption was clearly proven false.
Twitter at the same time removed features to have fewer things to support. And didn't implement anything new (or really fix much) for ages. It's not the same service that was standing afterwards. And the "still standing" ignores the part where they started serving empty timelines, repeated messages from broken paging, broke 2fa for days, messed up whole continent access, etc. etc. They survived (and still had fewer problems than I expected), but it wasn't smooth at all - hardly a success too.
The search functionality has been mostly broken (in several, overlapping ways) for several years now
The thing is, as an outsider to Twitter but with 20 years of experience doing software dev including some time at internet scale web and mobile, I don't think that the basic "fetch a timeline" backend plus two front end apps and a web interface is that hard, a small team (<100 engineers) definitely could do that with modern cloud infrastructure. But that's not what the Twitter product was. We've just described nothing more than the bait to lure the product, which was advertisers running ads.
Most of the effort in the original Twitter- engineering and everything else- was about getting advertising revenue. That meant 1) Having good data mining to identify user interests to match ads against 2) Having a strong user experience like Meta Ads or AdSense for the ad buyers 3) Keeping the conversations such that advertisers wanted to be associated with it, both automated and manual censorship 4) Having good relationships with advertisers, both large clients and agencies
That was where the majority of Twitter's (dev and non-engineering both) effort was going, to bringing in the revenue from advertisers. When Elon Musk purchased Twitter advertising fell dramatically immediately, at basically the same time he gutted all of the people doing the advertising. That was why he tried "buying a blue-check" and so many premium features, because he got rid of all the infrastructure necessary to have a serious ads platform. And premium doesn't work, of course, as anyone with experience in the Internet world could have told him. Which is why the value of the company- and its revenues- have declined so dramatically since the acquisition.
Bluesky is basically doing the same thing as X right down to also not running ads, which is how they also manage to run on a small team. Last I checked they'd raised less than 20m, and have basically no revenue, so they are able to operate very lean. It's for the same reason that Twitter is a lot smaller now: ads are a huge engineering and non-tech effort. As Alphabet and Meta remind us, it can be insanely profitable, but you need a lot of people to get it right.
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This is the recommendation I have heard peers, both technical and managerial, echo for years in one form or another:
The above involves one thing people can possess which GenAI cannot; understanding stakeholder problems which need to be solved and then doing so.
This is right on all counts and matches what I've seen and heard. And to all the sibling comments arguing about Elon's Twitter shenanigans being a bad move, it doesn't matter. I know because that's exactly what I said to a senior executive who deals with even more senior executives, and those were his exact words: "It doesn't matter." (A bit more in this thread: https://news.ycombinator.com/item?id=46750804)
I think their attitude could be summed up with this line by the Architect from the Matrix: "There are levels of survival we are prepared to accept."
I would only differ on one point: the situation was not this bad 2015-22. I would actually put the painful periods around the dot-com bust and the GFC. In fact, while not as great as the post-COVID heydays, things actually took off post 2010-ish. This timeline coincided with Meta starting a talent war at the same time that the Apple/Google no-poaching collusion lawsuit was filed.
That sentiment really makes it feel like this entire global economy is balancing on a toothpick of vibes and peer pressure, rather than some carefully navigated system of systems and backups. Wonder how long it can hold out before the camel breaks.
> It's harder to layoff someone you have had beers or coffee with
Interesting, in my experience this hasn't mattered at all. Generally those close enough to an employee to have had beers with them aren't the ones making any decisions related to layoffs, and may themselves be on the chopping block.
I fully agree with everything you've said and think the Twitter one is a really good point that I haven't heard before.
That said, I think you've left out the impact of interest rates and the end of the Zero Interest Rate Policy (ZIRP) on this. So much of the "growth above all else", "revenue and user count matters more than profit" mindset companies had over the last 10 years was because ZIRP incentivizes them to invest in riskier assets. If safe investments pay 1% a year that's only a 10.4% return 10 years later. If safe investments pay 5% a year that's a 62.8% return 10 years later.
When rates are low, investors are more willing to focus on a company's potential because their money isn't making a lot while sitting in the bank. When rates went up (in addition to everything you said) investors all of a sudden wanted to see profit, not revenue or user base numbers which means a lot of these companies had to pivot their strategy fast. All the perks and crazy moonshot projects get cut and only things that are profitable or have a clear path to profitability are kept.
If you look back, that's exactly why we saw things like companies throwing crazy money at things like the metaverse and crypto and then practically over night pull the plug on them.
The charts below are the fed funds rate and the number of SWE jobs from Indeed, both from the fed and you can see how they align.
https://fred.stlouisfed.org/series/IHLIDXUSTPSOFTDEVE
https://fred.stlouisfed.org/series/FEDFUNDS
>After the massive X/Twitter layoffs (60-70% headcount culled) with X/Twitter still standing, this assumption was clearly proven false.
I agree with your sentiment, but this example is awful. Twitter cut engineering staffed, pissed off advertisers that caused an exodus, had its stock steadily declining under Musk, and eventually decided to go private again. Only to be "aquired" by Musk's AI wing. Maybe there was a large cut that can happen, but Musk explicitly mentions how his plan was always to "over fire" and rehire later. Clearly 60% was too far, and he overestimated his charisma to get people back.
It'd be a stretch to call Twitter a "well oiled machine", but clearly these moves proceeded to chug the gears down to a near halt. It hasn't seen a major collapse only because Musk is playing Hollywood accounting with all his businesses these days.
>1. Move to a Tier 1 tech hub like the Bay and NYC. If you get laid off, you will probably find another job in a couple of weeks due to the density of employers.
I think I'm just screwed in that case. At least for my industry. There's "some" games scene in SF, but not much more than some other hubs like LA, Austin, nor Seattle. That's not really where gaming startups pop up these days, either.
>We live in a competitive world and complaining on HN does nothing to help your material condition.
Waiting to hear on job apps gives plenty of time to vent, though.
I'm doing portfolio projects, but it feels like that only gets you so far unless you have a very specific domain in mine you want to showcase. Especially for someone who already has professional experience to point to.
> but this example is awful.
I'm not agreeing with Musk - his personal brand is toxic and destroyed X/Twitter's fairly healthy ad revenue machine. That said he was right to highlight that X/Twitter was extremely overstaffed, and it was his mass layoff that showed everyone else that it is possible to cut overhiring and still maintain business operations.
> I think I'm just screwed in that case. At least for my industry. There's "some" games scene in SF, but not much more than some other hubs like LA, Austin, nor Seattle. That's not really where gaming startups pop up these days, either.
Gaming uses software but I wouldn't call it "tech" - I treat it as Entertainment/Media (the M in TMT), especially given the overlap with VFX.
As such, being close to where much of the business of media/entertainment exists is the best for your career - LA, NYC, ATL, SeaTac, and ATX, but not the Bay.
> I'm doing portfolio projects, but it feels like that only gets you so far unless you have a very specific domain in mine you want to showcase. Especially for someone who already has professional experience to point to.
Yep. But if you are in the gaming industry, it doesn't hurt to dabble in side projects that can be monetized into indie games, especially if you have time on your hands and a decent amount of savings.
I don't know that I agree with most of what you wrote but others have already addressed that.
> The reality is the current set of layoffs and work stresses were the norm in the tech industry until 2015-22. We live in a competitive world and complaining on HN does nothing to help your material condition.
I really fucking hate when people post this. It's one of those things that sounds substantive but it actually isn't. This is a social media forum, people express their opinions. Sometimes those opinions are negative about corporations or businesses. It's weird to tell people "STFU with your discussion on a discussion forum".
Twitter is just a misinformation machine now. They got rid of anyone that made it a decent place. No more pesky moderation, sales and ad teams, etc. as long as it’s up and the sock puppets can foment dived, it’s serving its purpose.
> And finally, COVID proved to a large number of companies and industries that 100% WFH and Async for white collar roles does work. But wait, if I can hire Joe in Cary to work async, why can't I hire Jan in Karlin, Prague or Jagmeet in Koramangla, Bangalore? This means I can also enhance FCF positivity while not impacting delivery.
Cultural differences. Things like "saving face" / not being able to admit a lack of knowledge in Asian cultures, Americans that need to be coddled (the higher up, the more dumbed down execs want information because they insist on micromanaging - they try to have their cake and eat it at the same time), Germans being blunt and direct to the point it offends Americans, Americans unable to comprehend Europe has labor regulations including on overtime and on letting go of staff... if you just say, you hire a bunch of bodies somewhere else and expect that to work out, you end up screwed - and many did end up screwed. In both ways, by the way.
It doesn't matter anymore.
Output is good enough - much of Google, Amazon, Microsoft, Meta, Nvidia, Broadcom, and other tech companies backbone infra or core IP is already implemented and owned by product and engineering teams in Poland and India or by foreign nationals in the US on work visas (eg. PyTorch). And if middle managers cannot manage to maintain output when faced with those with cultural differences, we'll fire them and hire people who can.
This is why you see the trope of "Indian C-Suite means layoffs and offshoring" - it's not the C-Suite that makes this decision, it's boards that decided to do so and thus hired an Indian origin C-Suite to operationalize that strategy. It's the same reason why Taiwanese Americans were over-represented in Hardware Engineering C-Suite roles 10-20 years ago when "China Shock" began in hardware industries.
It became easier to hire Jans and Jagmeets after a large number of SWEs and middle-managers in tech who were on visas were given the option to either be laid off or relocate to the old country and open a GCC during the initial COVID recession. And I may as well hire Pawel and Param as Product or Engineering Directors in MTV or SF and have them fly out to the Prague, Warsaw, Bangalore, or Hyderabad office every couple weeks.
> Americans unable to comprehend Europe has labor regulations including on overtime and on letting go of staff...
That's Western Europe (think Germany, France).
Central and Eastern Europe (think Czechia, Poland, Romania) roll out the red carpet for us, and we pay 75th-90th percentile salaries in those markets (which usually ends up being in the $80K-130K TC range) meaning we get the cream of the cream.
Heck, Czechia and Poland have dedicated bureaucrats who work with us to solve regulatory issues and give several thousand dollar per year per head subsidizes when investing in building a GCC. It's the same with India as well.
Twitter is a strange example given it has experienced a massive drop in valuation and ad revenue as well as struggled with user acquisition since Musk bought it. By all metrics it has declined in value except it where it serves as a powerful megaphone for the US right.
You are VC. Your opinion literally doesn't matter, you're high on your own supply. I go to lunches and dinners with people like yourself frequently and every VC and finance guy wont stop talking about their idiotic delusions of having an AI workforce (slaves). You people yearn for the days of slavery again, but without humans.
Have fun during the neo-French Revolution Mr. VC, hope you made enough to fill your safe room with treats!