Comment by mlsu
12 hours ago
I just can't get over how short and intense the period between 2021 and 2023 was. There was SO much hype, such stupendous hiring, in such a compressed timeframe. Within the span of like 9 weeks it went from full steam ahead to completely seized.
At the same time, the economy at large didn't seem to change very much.
Why did this happen?
Near zero interest rates + COVID remote work + PPP loans = Booming economy
What is happening now is the unwinding of the above. Now its:
Higher rates + AI + too many SWEs (bootcamps and over-hiring) = Busting economy
I think what we are in right now is more the norm and the post covid boom was an exception.
Over-hiring is a myth IMO.
Company wanting to hire essentially has two options: (1) hire from the pool of fresh candidates coming out of the Universities, (2) hire people who are already employed.
This means that to inflate the numbers of software engineers on the market you also have only two options: (1) have the Universities start to somehow exponentially produce the number of software engineers which the market could not amortize, (2) let go a substantial number of software engineers who now (in between 2020-2025) all of the sudden cannot find a new job anymore
(1) is a non-sense and for (2) to take place market needs to stagnate, which is what is happening. Reasons are manyfold.
And also the section 174 change too, which suddenly increased the tax bill for any companies doing software development.
That has been undone now, though.
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What was actually booming in though, like why did we suddenly need so many more tech workers? It didn't make much sense to me at the time so I am not particularly surprised by a correction.
The big AI companies don't really have high head counts, and the boom started somewhere before AI got taken seriously.
Was it just that there was access to cheap money thanks to covid era cash rates during that time?