Comment by hn_throwaway_99
9 hours ago
It's #3 - it's always #3.
All of these tech companies (with perhaps the notable exception of Apple) massively overhired during the pandemic, and that overhiring was on top of a decade+ of the ZIRP era. So there are 2 main drivers of these layoffs:
1. Correcting pandemic overhiring
2. In the ~2010-2022 timeframe, tech companies poured all this money into speculative bets that never went anywhere, at least from a profit perspective (think Amazon's Alexa devices division, Google Stadia, and perhaps most famously the Metaverse itself). All those diversions are now toast, and they employed a ton of people. The only speculative bet that is now "allowed" is AI, which is one reason why I giggle whenever I hear people trying to defend their companies or projects by adding "AI" somewhere in the name.
So perhaps my second point is similar to your #2, but I think the important difference is that the end of the ZIRP era would have caused companies to kill these inherently unprofitable projects even if AI never came on the scene.
> here are 2 main drivers of these layoffs:
> 1. Correcting pandemic overhiring
> 2. In the ~2010-2022 timeframe, tech companies poured all this money into speculative bets
Any data/sources on which this might be based? The pandemic was 6 years ago; do these "Agile" (the tech term) companies really carry many unproductive lines-of-business for so long?
> speculative bets that never went anywhere ... think Amazon's Alexa devices division, Google Stadia, and perhaps most famously the Metaverse itself
Organizations make speculative bets all the time. Is there an accounting of the profitability of Alexa/Nest etc.?
> end of the ZIRP era would have caused companies to kill these inherently unprofitable projects
if you plug in the years 2020-2026 in the Fed Rate - Unemployment chart here at [1], it shows that from 2020 - 2022, rates were near zero while unemployment spiked during Covid and then fell. From 2022 through 2023, rates rose sharply while unemployment stayed relatively low. 2024-2025 the labor market softened. You can add the Federal Funds Effective Rate and the Unemployment Rate easily through the menu.
Unemployment stayed low through the rise in rates for almost two years prior to 2024. Given that companies operate on a quarterly reporting basis and program/project decisions are at least on that cadence, I don't think that the line you're suggesting that Rates-Go-Up -> Projects-Get-Killed -> Layoffs-Increase quite lines up with the economy-wide data in this exceptional case of 2022-2023.
We may have to look elsewhere for the reasons behind the current labor market weakness ... cough..*economy*..*trade walls*..cough...*structural re-alignment* [2]...cough...
[1] https://fred.stlouisfed.org/graph/?g=1duFv
[2] 6% employment decline in 22-25 year old workers https://digitaleconomy.stanford.edu/app/uploads/2025/11/Cana...
How many hall passes do CEOs get for pandemic over hiring? Its been four years, and four years of layoffs and hiring to go back to layoffs. Pandemic over hiring might explain the first layoff or two a year or so later, but not the tenth or so layoff nearly half a decade later.
> Any data/sources on which this might be based? The pandemic was 6 years ago; do these "Agile" (the tech term) companies really carry many unproductive lines-of-business for so long?
Do big tech companies like FB and Google even pretend to be "agile" anymore? I think they mostly sell themselves on institutional stability and monopolist market positions rather than speed of execution
Did they ever pretend, and anyone ever believed that? "Agile" organization is even more of a bullshit concept than "Agile" in the team.
Excepting for trivial-size, freshly formed startups, companies cannot be "Agile", because finance and legal and HR and even marketing have constrains setting the tempo - you cannot just drive them with a sprint as if it was a clock signal.
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Yes, they do. In fact, they have several competing committees to market the concepts internally through armies of PMs and TPMs and KPIs and efficiency metrics tracking. Also your AI token use of course.
> Do big tech companies like FB and Google even pretend to be "agile" anymore?
Folks from those companies will have to speak up, but my understanding is that yes, internally these large tech orgs use the Agile Methodology, as opposed to the 'traditional' 'Waterfall' development methods.
agreed. zirp has become a meme, it does not really explain any current dynamics.
> In the ~2010-2022 timeframe, tech companies poured all this money into speculative bets that never went anywhere
I think it is hard to overstate the effect that Waymo will have.
1. If it scales worldwide. There's a decent chance that considering current global geopolitics, China will never allow them in, India and the EU will probably do the same or favor local competitors, Africa/Latin America will probably not have the money to tier 1 markets, which kind of leaves the US + Anglosphere.
2. If it captures most of the transportation market. That's debatable because self-driving tech works even better for trains, trams, subways, buses, etc. And that's before we go into other self-driving car companies.
3. If it becomes truly production ready within the next 10 years or so. By "truly production ready" I mean a Uber/taxi competitor in at least 20 alpha global cities outside of the US. Otherwise yeah, it's going to be a great tech but with a 30+ years ROI.
I didn’t say that Waymo will be a commercial success or that there won’t be copycats more successful.
But waymo created the category by showing it is possible.
Stadia was a minor footnote compared to Android, Pixel, and the other large organizations at Google. But there was plenty of hiring there during the pandemic, so your broader point is not wrong.
the only thing I miss about stadia was the controller. Man, that was a nice controller. Also, playing games on a nest hub was a neat party trick
Re: pandemic overhiring - haven't most of the big tech companies already corrected for that? Starting in 2022 we've seen very large rounds of layoffs multiple times a year. That's 3-4 years of layoffs now. Meta alone has laid off over 30k people since 2022, not to mention closing many open roles.
Where did all the extra employees come from? Did this result in shortages in other industries that the employees supposedly transitioned from?
IIRC, CS majors in universities grew a lot over the past 2 decades in particularly past couple years.
It can be argued that the demand for graduates in other industries might have stagnated or even dropped, and it's "spread over" many different industries, so it's not really that seriously felt.
But if you were hiring in the software industry during the covid peak years, you would seriously feel the shortage. I used to interview candidates in a FAANG, and at some point it was more likely than not that a candidate that we liked and prepared to make an offer would tell us they already accepted an offer from another FAANG...
These West Coast tech companies had some of the highest salaries on the planet, so yes, they took employees from other locales/areas.
But also, while there have been layoffs in engineering teams, Ive seen a lot of "support staff" get absolutely obliterated. Things like "agile coaches", "technical project managers", UX testers, marketing roles, etc. etc. While I've seen most of my laid off soft engineer friends find new jobs relatively quickly, I've seen lots of folks in these other roles suffer long bouts of unemployment, and often leave tech entirely. It's these folks I feel the most for. A lot of them were making low 6 figures 10-15 years ago, and now many of them have no hope of making that much in their careers again because companies have vastly reduced the number of those roles.
My experience working at Big tech companies is that people with roles like “agile coaches", "technical project managers", UX testers add questionable value. And the QA is usually outsourced to service companies like MindTree, TCS etc anyway.
Lot of these companies are bloated from having way too many Engineers anyway. Once you have mature software that brings in bagfuls of money, you don’t need that many people to keep the ship steady. I have seen this first hand at MSFT, we started a new team back in 2019 and it probably had ~40 people full time across US and India. By 2024 when I left, we had about 20 people in India who could easily run the service, the US team was dissolved and they moved to other teams in MSFT. The fact was that new features were few and the team was in KTLO mode. I have seen the reverse happen too, the team I was working on was dissolved and we were moved to different teams and everything moved to the US last year, managers were converted to ICs and a few folks were probably fired but it was a ~10 year old service that didn’t need that many people to run, even more so after AI tools became big last year.
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> A lot of them were making low 6 figures 10-15 years ago, and now many of them have no hope of making that much in their careers again because companies have vastly reduced the number of those roles.
I moved to the Seattle area during the dotcom boom.
Within 18 months I was unemployed.
There was DEFINITELY a feeling, like the whole “internet” thing might have been a bubble. I helped a friend move to Pleasanton CA and there were so many empty office buildings, it looked like a zombie movie.
But it all came back, and more.
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My observation is mag7 got less picky in hiring.
Post-2015 and accelerated during Covid, many east coast techies I knew that didn’t go to the right school, get a 4.0 and take the “right path” suddenly started popping up on my LinkedIn ad having joined a mag7.
And then everyone else lower on the food chain got even less picky.
And then we had the whole PM / DS / etc new job path fads that pulled in non-CS and sometimes non-STEM people who did a bootcamp.
Pulled from other technical fields, leading to them having an ageing workforce and struggling against far-eastern competitors.
If an engineering graduate has a chance to make $0.8X at a US company that makes hobby drones, $0.9X at a US company that develops 3D printers, $1X at a US carmaker that's struggling to develop a good EV, or $1.5X at a US adtech company - you can imagine where they end up.
Other industries and other countries. Until recently, other industries were struggling very hard to find developers for example.
> notable exception of Apple
I don’t think Apple is an exception. I think they have also over hired but they are also scaling, albeit slower than they used to. The scaling elsewhere is not happening, especially meta where they are trying to extract money from every corner they can find out of desperation, and so the books need to become lighter.
For Apple, hiring more than they need can be soaked into the books because their sales and profits keep increasing, though the rate of growth has slowed. However, if it’s an expense that can be avoided, then it’s an expense that should be avoided.