Comment by hn_throwaway_99

I posted another comment about this, but I think that "overhiring" is actually the true answer, but it actually encompasses 2 separate phenomena:

1. Companies overhired during the pandemic because they thought we'd all want to be online only forever or something. I agree with you that a lot of that "hangover" has already been wrung out of the system.

2. The other issue, though, is that the ZIRP era lasted over a decade and ended in 2022. Companies pushed a ton of money into speculative projects that never went anywhere. Even when they were successful in terms of usage data, a lot of them never made any money (think Amazon's Alexa devices division - tons of people use Alexa, but they use it for like the same 5 or 6 basic tasks, as hardly anyone is doing lots of shopping over a voice interface, which is how Amazon thought they'd make money). The ZIRP era is over, so not only do these companies need to unwind these structural misallocations, but unless it's AI or AI-adjacent, there is 0 appetite for this kind of "let's just throw a lot of stuff at the wall and see what sticks" mentality.

Heck, Meta spent many billions on the Metaverse, and that went nowhere. Yes, they've had previous rounds of layoffs, but I don't think it's that surprising that it's taken multiple years for them to unwind that bet.