Every day there’s more big job cuts at tech and games companies. I’ve not seen anything explaining why they all seam to be at once like this. Is it coincidence or is there something driving all the job cuts?
A few things happened pretty quickly.
During the pandemic, tech profits soared which led to massive hiring sprees. For all the press about layoffs at the big guys, I think most still have more workers than they did pre-pandemic.
Interests rates soared. Before the pandemic interest rates were ludicrously low, in other words it cost almost nothing to borrow money. This made it easier to spend on long term or unclear projects where the hope seemed to be “get enough users, then you can monetize.” Once interest rates rose, those became incredibly expensive projects, so funding is now much more scarce. Companies are pulling back on bigger projects or, like reddit, trying to monetize them faster. Startups are also finding it harder, so fewer jobs.
And of course, AI. No one is quite sure how much that’ll change the game but some folks think most programmers will be replaceable, or at least 1 programmer will be able to do the work of several. So, rather than hire and go through everything severance etc might entail, I think a lot of companies are taking a wait and see approach and thus not hiring.
I want to offer my perspective on the AI thing from the point of view of a senior individual contributor at a larger company. Management loves the idea, but there will be a lot of developers fixing auto-generated code full of bad practices and mysterious bugs at any company that tries to lean on it instead of good devs. A large language model has no concept of good or bad, and it has no logic. It’ll happily generate string-templated SQL queries that are ripe for SQL injection. I’ve had to fix this myself. Things get even worse when you have to deal with a shit language like Bash that is absolutely full of God awful footguns. Sometimes you have to use that wretched piece of trash language, and the scripts generated are horrific. Remember that time when Steam on Linux was effectively running
rm -rf /*on people’s systems? I’ve had to fix that same type of issue multiple times at my workplace.I think LLMs will genuinely transform parts of the software industry, but I absolutely do not think they’re going to stand in for competent developers in the near future. Maybe they can help junior developers who don’t have a good grasp on syntax and patterns and such. I’ve personally felt no need to use them, since I spend about 95% of my time on architecture, testing, and documentation.
Now, do the higher-ups think the way that I do? Absolutely not. I’ve had senior management ask me about how I’m using AI tooling, and they always seem so disappointed when I explain why I personally don’t feel the need for it and what I feel its weaknesses are. Bossman sees it as a way to magically multiply IC efficiency for nothing, so I absolutely agree that it’s likely playing a part in at least some of these layoffs.
So basically, once again, management has no concept of the work and processes involved in creating/improving [thing], but still want to throw in the latest and greatest [buzzword/tech-of-the-day], and then are flabbergasted why their devs/engineers/people who actually do the work tell them it’s a bad idea.
I’m pretty excited about LLMs being force multipliers in our industry. GitHub’s Copilot has been pretty useful (at times). If I’m writing a little utility function and basically just write out the function signature, it’ll fill out the meat. Often makes little mistakes, but I just need to follow up with little tweaks and tests (that it’ll also often write).
It also seems to take context of my overall work at the time somehow and infers what I’ll do next occasionally, to my astonishment.
It’s absolutely not replacing me any time soon, but it sure can be helpful in saving me time and hassle.
Those little mistakes drove me nuts. By the end of my second day with copilot, I felt exhausted from looking at bad suggestions and then second guessing whether I was the idiot or copilot was. I just can’t. I’ll use ChatGPT for working through broad issues, catching arcane errors, explaining uncommented code, etc. but the only LLM whose code output doesn’t generally create a time cost for me is Cody.
If you tried copilot at the beginning, it’s improved a lot since, now it’s using GPT-4.
A large language model has no concept of good or bad, and it has no logic.
Tragically, this seems to be the minority viewpoint - at least among CS students. A lot of my peers seem to have convinced themselves that the hallucination machines are intelligent… even when it vomits unsound garbage into their lap.
This is made worse by the fact that most of our work is simple and/or derivative enough for
$MODELto usually give the right answer, which reinforces the majority “thinking machine” viewpoint - while in reality, generating an implementation of&using only~and|is hardly an Earth-shattering accomplishment.And yes, it screws them academically. It doesn’t take a genius to connect the dots when the professor who encourages Copilot use has a sub-50% test average.
In my experience copilot for neovim is pretty useful if you
- Split the current window if you have anything like type declarations in a separate file
- Write a pretty verbose documentation, e.g. using Swagger.
If you expect it to whip out of thin air what you really need and not have you correct it in several places, learn to code without it first.
To add to this, at my company, we’ve received a mandate to avoid putting any code into an AI prompt because of privacy concerns. So effectively no one is using it here.
Yep as far as most companies should be concerned, using something like CoPilot means giving free license to Microsoft to all your trade secrets and code that you input.
We had the same. And you would have thought for a heavily regulated industry we’d keep it that way.
But no, some executive wonk from Microsoft flew over, gave our c-suite a “it’s safe, promise” chat over champagne and lobster, and now we’re happily using copilot.
a shit language like Bash
There’s your mistake, treating bash like a language and not like a scripting tool. Its strength is that it’s a common standard available on almost every machine because its older than most of us, its weakness is that it’s full of horribly outdated syntax because its older than most of us. If used to script other processes it’s great, but when you start using it as a language then the number of ways you can do something horrible that sort of works makes JavaScript look slick!
Are we great again yet?
I completely agree, although I think AI is more likely to have impact marketing, communications, PR, creative and PM type roles (and there are a lot of those in tech companies). I suspect we will see a noticeable reduction in tech workers over the next decade.
Interests rates soared. Before the pandemic interest rates were ludicrously low, in other words it cost almost nothing to borrow money. This made it easier to spend on long term or unclear projects where the hope seemed to be “get enough users, then you can monetize.” Once interest rates rose, those became incredibly expensive projects, so funding is now much more scarce. Companies are pulling back on bigger projects or, like reddit, trying to monetize them faster. Startups are also finding it harder, so fewer jobs.
Note that this also impacted other projects that take a lot of capital up front, then provide a return over a very long term. There was a nuclear power plant project with NuScale in Utah that got shelved over this; with interest rates suddenly going from way low to way high, the economics get upended.
I’d bet that in general, infrastructure spending dropped across the board.
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Lol AI ain’t that good, bud.
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What you’re missing is that 95% of programming projects fail, and it’s never because the programmer didn’t code fast enough.
Speed-up isn’t why I have a team instead of being a solo act.
There’s also the pure reality that, yeah, it’s easier today to get a project off the ground than ever before, and AI is good at that, but you know what AI is absolute shit at? Modifying ludicrously cumbersome, undocumented, brutally hacked together legacy code and addressing technical debt - the two most common tasks of most actual software engineers.
True.
Good thing most companies aren’t stuck with ludicrously cumbersome, undocumented, brutally hacked together legacy code bases. /s
I can’t even type that with a straight face.
the two most common tasks of most actual software engineers.
So true.
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What you said, I know that. Do the people that run these companies know that?
Yeah. Exactly. They did the same to various degrees when web frameworks first hit the scene, and numerous other advancements before and after.
But as you said, the new tech genuinely does make us both faster and better.
It just doesn’t fix the crap parts of the job that the CEOs always hope it will. (As someone else pointed out, it specifically doesn’t magic wand away decades of technical debt, haha.)
I would say a 3-hour-task isn’t representative in the other way around. When you tackle a 1000-hour task, you’ll probably spend more than 1000 hours working out what the requirements even are. A significant portion of my workday are meetings, not coding.
And with a long-form task, you’ll go back reading existing code much more often than writing new code, too.
I love the speed-up. And I’m sure it factors into CEO and CIO decisions. But they’re on their way to learning, once again, that “code faster” never had anything to do with success or failure in efforts that require programmers.
Source: I sought great power, and I became one of the fastest coders, but it didn’t make my problems or my boss’s problems go away.
If you know how to use AI tools
Can you elaborate on this part? What’s your idea of proper usage?
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I wonder if it might be the specific type of work that you do that allows for this. I don’t pay for ChatGPT, so I wouldn’t know the quality of the code it outputs with GPT-4, but I personally wouldn’t blindly trust any code that comes out of it regardless, meaning I’d have to read through and understand all the generated code (do you save time by skipping this part maybe?), and reading code always takes longer and is overall more difficult than writing it. On top of that, the actual coding part only accounts for a small fraction of the work I do. So much of it is spend deciding what to code in order to reach a certain end goal, and a good chunk of the coding (in my case at least) is for things that are much easier to describe with code than words. So I’m still finding it hard to imagine how you could possibly get anything more than a 1.5x output improvement.
The main time savings I’ve found with generative AI is in writing boilerplate code, documentation, or writing code for a domain that I’m intimately familiar with since those are very easy to skim over and immediately know if the output is good or not.
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Do you work in a technical role? I’ve dabbled in using AI to help out when working on projects, but I would say it’s hit or miss on actually helping, as in sometimes it helps me move a bit faster and sometimes it slows me down.
However, that’s just for the raw “let’s write some code part of the work”. Anything beyond that in my roles and responsibilities doesn’t really intersect with what AI can currently do, so I’m not sure where I would get a 5-10x speed-up from.
Honestly I’m not sure if I’m taking a wrong approach or if everyone else is blowing things out of proportion.
It’s interest rates.
Loans are more expensive, but critically, so are eggs.
Tech workers like eggs, and see no reason to buy fewer, so they’re asking for more money, unionizing, or hopping jobs to increase their salaries.
Notice how the big players are releasing press releases each layoff? No attempt at secrecy. No payouts to NDA the laid off employees. It’s an intimidation tactic.
It’s working at the moment, but tech workers get over their job change discomfort fast when there’s a 100% raise on the table. The market rate vs curent pay gap just creates pressure to change jobs until they do, even if they’re scared.
And the shareholders are all fucked.
Every tech layoff is a lottery ticket toward a company ending event. And then every employee who leaves because they realize the company is incapable of loyalty. Then every worker who leaves because their suppressed wages aren’t keeping up with their expenses or hobbies. Another chance to end the company. Nobody knows which perl script is the lynchpin of their company, or which random person will leave with all knowledge of it.
The CEOs are positively aggressively collecting chances to bankrupt their shareholders.
But the CEO will get a nice payout next quarter. So that’s nice.
Every tech layoff is a lottery ticket toward a company ending event. And then every employee who leaves because they realize the company is incapable of loyalty. Then every worker who leaves because their suppressed wages aren’t keeping up with their expenses or hobbies. Another chance to end the company. Nobody knows which perl script is the lynchpin of their company, or which random person will leave with all knowledge of it.
Plus, as this happens the first/second/third time to new employees, they lose any sense of company-loyalty they might have had at their first job. The next time anything goes wrong, these people are already writing applications, and then quitting the moment they get an offer somewhere.
This behavior by company trains people to associate fuck all with their current job. Which is a good attitude as a worker, but usually not something a company would have wanted, historically. A privately held company would usually want to aim for high worker loyalty, allowing them to endure bad market times without immediately shedding most of their workforce.
Modern shareholders+C-suites behavior reinforces this, however. Everything goes in the name of saving the quarterly report and making it look good and paying out your own bonuses.
eggs?
I read it as an allusion to the price of everything going up. But yes, eggs.
Eggs.
Spam.
Eggs.
Eggs, eggs, spam.
eggs?
Eggs.
Weirdly, my first thought was eggs as in trans people who don’t know it yet. I really didn’t expect eggs in the literal meaning in that sentence…
Is that a real metaphor that people use? I’ve never heard of it referring to trans people before. But that’s not my community.
Yeah! We use it to lovingly refer to those of us who haven’t come out to ourselves yet. Their shells haven’t cracked yet.
The memes out of egg_irl are pretty fire if queer memes are your thing
The memes out of egg_irl are pretty fire if queer memes are your thing
I’m a cis-(mostly)het guy and absolutely agree. I get a special kind of joy from people discovering themselves and being accepted.
Yes it is. For example, /r/egg_irl was a fairly popular subreddit.
The Federal Reserve raised interest rates in order to cause layoffs. The capitalist class wanted to enlarge the reserve army of labor so that workers would be too worried about losing their jobs to demand raises.
‘You Are Gambling With People’s Lives’: Warren Rips Powell Over Job-Killing Rate Hikes
This is a thing that sounds like some crazy uncle bullshit but it is actually completely true and non-controversial.
The scariest thing to a central banker when it comes to inflation is that wages might start to go up. When that happens the inflations is basically permanent.
People need to understand that the Federal Reserve is the cartel of the US private banks, and that they have captured the US Treasury as well, which is the US sovereign fiat money printer. Just look at the history of people in executive positions at the Treasury and the Fed. It’s a revolving door between those positions and the executive positions at major US banks and corporations.
Here is an alternative Piped link(s):
Piped is a privacy-respecting open-source alternative frontend to YouTube.
I’m open-source; check me out at GitHub.
Bitcoin solves this. Clear, unambiguous, unchanging monetary policy that doesn’t constantly increase the supply and take a portion of your dollar’s value to give to anybody else. It is not aligned with any country or even block of countries and is truly the first international currency in that sense. No politician or even national or supra-national government can force Bitcoin do do anything that isn’t part of its protocol because it’s so decentralized.
It has been running 24/7 365 for 15 years without a single major security issue in the protocol or a single hour of downtime. With lightning network upgrades, transactions confirm in under a second internationally with fees 1000x less than credit cards, often under a single cent.
It is accessible to anybody in the world with a cell phone and internet access, including the billions, with a B, who don’t have access to stable banking infrastructure or local currency. No credit checks, no needing six forms of ID, no overdraft fees, no bank holidays, no middlemen, no nonsense. And it does this with less electricity than you’d think, less than 1% of global electricity usage, mostly from renewable sources as miners chase the cheapest electricity and the cheapest electricity is from renewables and over-provisioned grids.
For anyone remaining in the world who still believes cryptocurrency nonsense, I have a bridge to sell you.
I agree this has got to be the root reason. They are scared.
I actually think it’s just bandwagoning by a bunch of cowards.
We saw this same phenomenon early last year too: Facebook laid off a bunch of employees, then Apple announced the same, then Microsoft, then Google, then Salesforce, then the infamous Twitter layoffs.
I think big tech is so sensitive to negative press that they all just wait and lay off folks at the same time so no single company takes all the bad press.
It doesn’t even have to be Illuminati-level coordination, either. All it takes is for some exec at Tech Company B to see that Tech Company A is firing people. Then Tech Company B decides to clean house too. The cascade is just a bunch of morons deciding to hop on the “let’s fuck over our employees to help our balance sheet” train.
It’s more devious than that. If company A lays off 1000 people due to “legitimate” reasons (e.g. twitter generally doing poorly), that’s 1000 people looking for new jobs. Company B, C, and D can then take that as an opportunity to lay off 1000 people each that aren’t immediately vital to the success of the company. Company A might not have the funds or desire to rehire right away, but the other three will slowly start building back up. You end up with 4000 people competing for 100 open positions. Many may not be willing to accept a pay cut, but some percentage will, and gradually the rest will be slowly starved down to accepting less pay.
Software engineering is notoriously a high paid career path, and executives at these companies hate that, so any opportunity they get to suppress wages, they’ll jump on. Especially if you know every other big company is doing it to, so they won’t be able to turn that into an advantage against you
Tech is hard, leaders aren’t always technical. AI is great at bullshitting, and it’s swooned many CEOs into thinking it will 10x (make them 10x more efficient than they previously were) existing employees / replace the need for programmers. Lots of leaders just look to what other leaders at companies are doing - some see what elon does at twitter as proof that downsizing drastically won’t kill your company.
Programming is like editing a book with many chapters. New developers need time to learn the story line of the book before they can begin editing anything. If the book has been around and edited continuously for over a decade, it’s going to take some time for those developers to understand the book well enough to start making meaningful contributions. Lots of these tech companies have multiple books each with many chapters, and one thing leadership either doesn’t realize or doesn’t seem to factor into the equation is that maintaining these books and all their story arcs and character development gets harder and harder over time. Truly in the tech industry, it’s more expensive to train a new hire than it is to promote an existing hire.
But again, leaders are listening to folks like elon musk…
It’s an easy win for the balance sheet. Their products are still sellable, the services should be more or less unaffected (for the next few quarters), so they’ll continue to get the same revenue. But their costs just decreased, so they look more profitable.
It looks good on quarterly calls. It’s a good way to juice a stock.
Short-term profits in exchange for long-term damage!
Employees aren’t afraid anymore so companies are trying to reinstate fear.
Yes, it is a concerted effort to create a glut. This is like the wga strike, they want to starve you a little so you’ll come back begging for a job before you lose your home.
They know the next 20 year will be a shortage of labour and stagflation. They’re just trying to start this lean period with the upper hand.
Lots of tech companies saw huge growth during covid thanks to everyone having extra money to spend (see crypto and NFTs if you want clear examples that we just had too much laying around).
Many of these companies then saw their revenue and userbase increase month-after-month and thought the growth was going to continue forever (or, more cynically, they knew it was going to crash but acted like it was going to continue). This led to a bunch of hires to “drive growth.”
But obviously, pandemic spending habits have mostly stopped, and the money faucet is being turned off. Companies can’t afford all the workers they hired, so they’re “let go due to market downturns.”
TL;DR Companies either thought they were going to have unrealistic growth and made dumb hiring decisions, or knew the growth was going to end and thus made cruel hiring decisions.
The correction I would make is that they can afford the workers. But the leadership needs to continue the growth. All they have left is to cut expenses, and the easiest way to do that is layoffs.
Add something about the federal funds rate exceeding 2.5% for the first time since 2008 and you’re on the right track. I think interest rates affect startups more than Google so bigger tech firms were hoarding talent to prevent new competitors from having those workers.
I think interest rates affect startups more than Google so bigger tech firms
Definitely. Google has lots of cash already, whereas startups are often in need of more money.
The other thing that’s happened recently is that businesses used to be able to write off (deduct in their tax return) all their R&D expenses in the year they were incurred, whereas now they need to be amortized over five years. This has a huge impact to startups because a lot of their initial work is R&D, and now they have much larger tax bills than they used to have. https://www.axios.com/2024/01/20/taxes-irs-startups-section174
Many people got hired during Covid.
Grow isn’t as expected, so now they are firing again.
But on the bright side, most of those companies still employ more people than pre-covid.
A company hiring 19000 people isn’t going to get as many clicks as a company firing 1900 people.
Overhiring during covid is definitely a major part of it, combined with a slight investment bubble bursting
I don’t like calling it overhiring as if it was accidental or something. They didn’t hire thousands of people over covid thinking covid would never end, they just knew they could pick up people to fill the role for now and kick them to the curb as soon as they weren’t needed.
It wasn’t an oopsie, it was by design.
Yeah, here in Germany, workers have stronger protections, laying them off isn’t as easy, and I feel like the layoff waves have largely not occurred here, because companies didn’t hire so much during the pandemic.
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Late stage capitalism
Finally. Thanks.
One factor I haven’t seen mentioned is that because of rising interest rates, tech companies have had to shift from being focused on growth to actually turning a profit. Because of this, companies are having to shed employees because they over hired in anticipation of that continued growth. People are expensive so that’s an “easy” way to try to get the line closer to positive.
This is kind of a rough overview and I’m by no means an expert on economics. Just someone who works in tech and so has been following things closely.
Michael Hudson, Jun. 2022: The Fed’s Austerity Program to Reduce Wages
To Wall Street and its backers, the solution to any price inflation is to reduce wages and public social spending. The orthodox way to do this is to push the economy into recession in order to reduce hiring. Rising unemployment will oblige labor to compete for jobs that pay less and less as the economy slows.
It also takes time to realize the costs of shedding workforce, and by then you might have a different CEO. As long as it’s next quarter, it’s fine.
This plus the changes to section 174 meaning R&D costs have to be written off over five years instead of all in the year they’re incurred. That’s hurting startups a lot and many have had to switch from building new stuff to licensing/selling their existing stuff, and firing some expensive engineers/developers, to be able to afford to stay open. https://www.axios.com/2024/01/20/taxes-irs-startups-section174
Okayokayokay, this isn’t the point, I know… but those are some really shitty, ill-fitting suits. They look like crap.
I’m assuming they were provided by the photography company taking the stock photos
Overinvestment and strong labor demand led to very high salaries. Investors hate high salaries. Firing people they can replace at a discount now that supply is increasing
It’s this.
With inflation, everyone deserves a higher salary. And programmers are able to command it.
CEOs hate this, so they’re playing chicken.
They’ll all get fired and pull their golden parachute in the next three years, when the shit hits the fan because they decided they could get by without XYZ critical skill.
Then they’ll go to the next place and evangelize about how “you’ve got to invest in talent”.
And soon they’ll be surprised the employees are less and less loyal and blame it on the new generations.
ChatGPT has been quoted as a cause in at least one of the layoffs. The tech industry is specially positioned to be quickly affected by AI, but AI is going to impact 80% of the jobs on the planet within the next 8 years. Our world is about to experience a massive change to the way things are run. We can try to prepare, but it’s going to change in ways previously unimaginable.
The chatbot that’s wrong 50% of the time? That’s hard to believe.
You’re doing yourself a big disservice if you limit your understanding of AI to what you read from the opinions of Lemmings. It is incredibly powerful, and every major corporation has large investments in AI integration.
I’m not doing that at all, this is my personal experience.
Then you’re using it wrong.
Clearly the most reasonable response. Did you work for apple back in the day?
I wish!
I can’t wait to be starving
Yeah, it’s pretty scary. I don’t know what the future holds, but I think a lot of jobs are going to go the way of the vacuum tube salesman.
There’s no way capitalism and those that buy into it can responsibly use AI
True as that may be, it’s not going to stop them.
Maybe people should learn to fight for a better tomorrow instead of just trying to get through today
And how many major corporations that invested in NFTs are still doing so?
Look man, I don’t work for OpenAI, or Microsoft, or Google, or any other company that is developing their own AI. I’m not evangelizing. If you don’t want to use it, then don’t. But it’s going to affect everyone, regardless of what they think about it. If you want a leg up in the changing world, then start learning about it. Or don’t. I’m not your dad.
It doesn’t need to be right to make money, often more money than companies get by paying people to do a job properly.
… Yes, it does in the tech sector. If you’re wrong it doesn’t work.
I’ve tried the tools out. You go from writing code for an hour and debugging for half an hour to writing code for 15 minutes and debugging for three hours.
Half the time you’ve ripped out literally every bit of code the AI wrote by the time you’re done making it work.
Get better at the prompts you use. My entire team uses it daily, and it has made us probably 600% more effective. Learning to prompt AI is a valuable skill right now.
What’s your metric that you improved 600%?
Oh, I know how to prompt AI. Getting it to spit out workable code doesn’t mean you don’t have to review the code, or make sure it’s integrated correctly.
You also have to make sure it’s not generating blatantly braindead code, which makes the review and debugging cycle take longer.I remain unconvinced that it’s suitable for domains where there is a right and wrong answer, like engineering or law.
I’ve found more value in the systems that do a good job understanding the problem description and then returning references to documentation and prior art on techniques, as opposed to the actual code.
I don’t need a virtual junior dev I need to hand hold, I actually have those and mine get better. I want a virtual “person who worked on something like this once and knows the links to the good articles”.Imagine training what’s going to replace you lol
It’s going to happen regardless of what you personally do. You might as well get some benefit from it while you can.
Nah, I have standards
I mean, I can imagine it. It’s the industrial revolution all over again but Cyberpunk style.
