More Big Companies Bet They Can Still Grow Without Hiring
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The article discusses how big companies are trying to grow without hiring more employees, relying on AI and productivity gains, but commenters are skeptical about the sustainability of this approach and point out underlying issues in corporate culture and economy.
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Talking to friends in other places, and reading the article, it isn't really different elsewhere. Given the disarray the US government is in & their refusal to give us benefits we've already paid for, employers know they have all the power at this time.
If their goal is reducing wages through layoffs/attrition and lowballing new hires, they aren't going to get it without triggering a recession or worse.
Really it's the government pushing very hard to force people to accept jobs.
No amount of money is worth that, despite many otherwise brilliant people get into tunnel vision (mortgage, some investment, chasing some top performer image or whatever else) and then SHTF.
Maybe its my European perspective, maybe I am old enough to realize its just a job and life satisfaction and legacy is defined by very different things, maybe I don't give a fuck anymore. Maybe all of it.
The US is systemically anti worker.
If you ended up as a prisoner in some sort of golden cage, your own choices brought you there. Probably too late for you but a cautionary tale for others - dont go down that path unless you grok what it really means, its a decision for rest of life.
Also I never said don't work. Just dont be a prisoner of your company, with your rationale you already gave up the fight for yourself and ended up as a modern slave to... ability to afford health care treatment?
Maybe start some good sports, eat healthy and sleep well and healthcare costs will most probably not be your major concern till retirement.
Many people around me want to leave tech because of this. I'm considering it too, but unfortunately, I have no other skills outside of IT. I guess I would need to get re-qualified. These days, I think it's better to be in healthcare than IT.
Meh, nurse pay seemed alright till I learned how much they’re worked. Maybe physicians get a pretty good deal, but the reasons for that are also why you won’t be able to transition to that career.
I left tech for this reason.
Greed is sustainable.
When there's enough money on the sidelines, the pendulum swings, and big bets come back in fashion.
Downsizing is not a big bet.
Nobody leads tech to save billions and have money sit on the sidelines. It's a weak, shallow bet that should be reserved for discount retail and commodity markets.
The savings will be spent on engineering, eventually.
See: https://www.corumgroup.com/insights/major-tax-changes-us-sof...
https://technical.ly/startups/r-d-tax-change-reversal-startu...
And many CEOs lead because they like the fact that they get paid millions in stock options that are neutralized through buybacks.
[0] https://news.ycombinator.com/item?id=34617964
[1] https://www.livemint.com/companies/news/elon-musk-fired-80-p...
If Musk had never purchased Twitter and Jack Dorsey performed the same reduction in engineering staff, I doubt the site would be materially different from how it was pre-Musk.
Of course twitter still works. Even with 0 engineers, it would still work. That's never been the goal of a software company. I can compile Mario 64 right here, right now, decades later. Should Nintendo just go home? Call it quits? Of course not.
The perceived success is not the same as actual success. Remember it is a private company and you don’t actually have any idea how bad the balance sheets were after the layoffs. Before the financial engineering that Musk did by using his other companies to invest in Twitter to preserve its valuation, the company was down almost 80%. [1] If public companies go down that route, they’ll very quickly find out what the actual impact of that model is.
[1] https://techcrunch.com/2024/09/29/fidelity-has-cut-xs-value-...
As I wrote in another post, if Musk had never purchased Twitter and Jack Dorsey performed the same reduction in engineering staff, I doubt the site would be materially different from how it was pre-Musk.
Just because it works on your phone doesn’t mean there are no engineering problems behind the scene. You’re just not aware of the problems that exist because it’s a private company and you’re not privy to the information.
Not true. The main reason I stopped clicking Twitter links in the first place was the abysmal chance of the tweet loading and not just displaying a generic "Failed to load. Try again?" after the takeover. I mean it occasionally happened before as well, but it became the default behavior.
It lasted long enough that by the time (over a year) they'd finally fixed it, the platform had deteriorated to a right-wing cesspool anyway.
Now we're in the worst case scenario- hundreds of thousands of middle-class "bullshit jobs" are disappearing, but rather than being replaced by a wave of productive jobs (say, in clean energy, non-polluting manufacturing, regenerative agriculture, medical technology, biotech, public transportation infrastructure, housing construction, etc) we're just seeing unemployment, underemployment and government policies that are openly hostile to anything helpful for society.
America could probably still be saved by a "Green New Deal" type of program which spurs massive investment and employment in industries which have positive externalities. Things don't exactly look like that's likely in the next few years, but maybe the 2024 election was the wake-up call the Democrats needed to reorient away from the "woke" social issues and reengage with the average American voter.
Maybe I'm too optimistic and we're just doomed, but I think the average voter would have cared more if a handful of things had gone differently.
For starters of course, Biden's rapid cognitive decline and the poor handling of it from the DNC made a mess of everything and prevented a unified platform message to tout the successes of those programs.
Also, the timelines were tough to make work for short-term political gain. There's necessarily going to be a span of time between a law being passed to eg, create tax incentives or loan programs to support building a factory and when those factories are actually built, operational and impacting the economy.
Finally, most of the programs from the Biden administration were hamstrung by trying to jam every left wing and liberal ideal into every program. Instead of saying "Go build a battery factory" they said "Go build a battery factory that's owned by racial minorities and run by women and employs union workers paid at a minimum of 110% of the prevailing wage and provides childcare onsite and doesn't negatively impact local housing affordability and ..." until the whole thing became impossible to implement.
Basically, I think an Ezra Klein type of Democrat could succeed. To be determined if that's the direction the party goes though.
Jobs are neither fungible nor mutually exclusive; there is no reason to assume that someone working in a bullshit job would thrive in a non-bullshit job that contributes to society in more productive ways, nor does the existence of bullshit jobs prevent people from working non-bullshit jobs. I hate to say it, but perhaps many people are employed in bullshit jobs because they are not capable of anything more challenging.
Because bullshit jobs paid mode. Your average engineer working on ad targeting or at a hedge fund makes a lot more than working in say medicine.
— Flunkies, who serve to make their superiors feel important, e.g., receptionists, administrative assistants, door attendants, store greeters
— Goons, who act to harm or deceive others on behalf of their employer, or to prevent other goons from doing so, e.g., lobbyists, corporate lawyers, telemarketers, public relations specialists
— Duct tapers, who temporarily fix problems that could be fixed permanently, e.g., programmers repairing shoddy code, airline desk staff who calm passengers with lost luggage
— Box tickers, who create the appearance that something useful is being done when it is not, e.g., survey administrators, in-house magazine journalists, corporate compliance officers, academic administration
— Taskmasters, who create extra work for those who do not need it, e.g., middle management, leadership professionals
[0] https://en.wikipedia.org/wiki/Bullshit_Jobs
1. Large tech firms overhire like crazy
2. Interest rates go up, firms layoff tens of thousands of workers who never should have been hired in the first place
3. Firms pile more work on to remaining people, cut their pay relative to inflation
4. Existing workers threaten to leave, companies let them because "Look at all the talent on the market!"
It's abject lunacy, and companies are all too enthusiastically degrading the quality of their own workforces. The upshot is that this will pry some entrenched talent and experience out of large employers and into smaller companies. But the latest crop of MBA whiz kids are really something special.
It is reasonable for companies to increasingly target that small part of population and sell them the same (small) number of widgets /services in higher prices and see their profits go up.
(Joke), well, if they keep convincing the small part of the population to spend ever increasing amount of money on "better" widgets...
In reality, if too many people are unemployed, no one's going to be able to buy things so that companies can have profits!
That being said, what I read is that a lot of companies are doing general housekeeping and trying to avoid bloat.
These incumbent companies are able to keep doing this because there’s no one around to eat their lunch. Maybe it’s cheaper to just buy (and kill) any company who legitimately threatens the status quo.
Companies should be hungry for real growth. You should not be able to financially engineer your way into stock growth.
And the lack of new (non-AI) startups allows bloated incumbents to get by without innovating or offering new products. Quality destroying measures like offshoring and outsourcing are easier to pull off. As is allowing services and standards to slide.
Maybe we'll only know once interest rates come back down. Or once the AI-replacing-workers veil has been lifted.
I think this dynamic is an under appreciated source of the chart that shows the decoupling of the job market with the stock market [1]
[1] https://www.businessinsider.com/how-scary-is-the-scariest-ch...
That's not necessarily the case. Credit expansion comes with healthy growth as well.
If growth is happening with high interest rates then that means capital can remain out of the hands of the public but debt replaces it
If I’m a billionaire my goal is to own everything and have everyone in debt to me based on my personal currency I issue - like points or miles or a corporate debt vehicle for example.
Surely we aren’t seeing a increase in debt also right? /s
The Fed targets price stability and employment, not growth.
Of course that is largely correlated with stimulating growth as a derivative of that, but certainly not "only" to stimulate growth. For example, the current cutting cycle has far more to do with inflation that it does growth. The Fed's primary concern currently is growth accelerating into more inflation.
There are other reasons for cutting as well. For example, funding stress. Repo funding stress caused an interest rate pivot not too long ago (and repo funding stress is rising once again, which will be a factor in the current rate decisions.)
1. People being blocked on others
2. Lack of focus (Upper management ordering lower ICs to build bridges to nowhere, stop midway, start another bridge to nowhere project)
3. A lot of work being purely performative
4. A large chunk of REAL work having negative returns (management telling people to do stuff you'd be better off not doing financially)
5. ICs having slack.
AI doesn't need to do any of the real work. If it can increase efficiency ANYWHERE in this chain, it could have huge rewards.
Most people are focusing on getting AI to do REAL work.
But most "work" is waste or exceptionally low value, and I think more effort should go to AI reducing (instead of increasing) that.
Too much of my career has been in the "Legacy Code" mines, and the LLMs seem like the worst pipeline for expanding "Legacy Code" faster than ever. Some of them may as well be called "Legacy Code-as-a-Service". I'm not worried that my "Legacy Code" skills are going to get out-of-date, I'm worried they are going to be in higher, uglier demand when some of these bridge-to-nowhere factories finally get shutdown or at least slowed down for some of the real maintenance costs to finally show up on companies' bottom lines.
6. A lot of unneeded complexity is added.
Perhaps if we can only use AI to understand the wasted effort.
Also, I rather have the ICs with some slack and time for clear thinking to address the big issues than always be busy on a mountain of work that goes now where.
Of course we can’t spend $20/month on compute for that, so it’s now a web hook jankily jammed into another app that writes data to Jira with an Airflow job that triggers Databricks to run a notebook that uses Spark to write the data to S3.
All that to replace a Lambda that would never have gotten to triple digit queries per day. No, instead we spent a month of engineering time to strap all this together and we probably spend 4x as much on compute because it is both slower and requires more resources.
And now I’m getting complaints that it’s complicated and hard to troubleshoot. Yeah, of course, we’ve duct taped together products whose combined manuals are thousands of pages. Color me shocked it’s hard to use.
Imagine pushing your vibe-coded changes triggering a CI hook that uses an LLM to create a TPS report per commit+pipeline in a merge request, which another LLM-based bureaucrat could use to decide whether the MR should be approved, generating its own TPS reports in turn which some middle manager could use their LLM to summarize.
Think of all the shareholder value we could create by going all-in on AI!
Like… for year end reviews and bonuses, a manager might have a dashboard of feedback from an AI of everyone’s technical accomplishments, as AI can review their PRs and designs. At that point, an AI could even rank engineers based on contributions, so the manager just verifies that the feedback is all correct.
Not saying that’s necessarily a good thing, but I could see a world where that happens. It already does seem to with Amazon warehouse workers.
This is the idea. However, many of these "higher-caliber" people are going to burn out because productivity expectations, especially in software development, are rising insanely due to AI tools.
Starting over with a new org chart is the fastest path to higher productivity, but it should also work to gradually migrate to a more efficient structure by not hiring. Of course this could take many years and meanwhile you'll be outperformed by a smaller org.
If it collapses, maybe AirBnB will still be able to rent out (illegally in many cases) apartments to rich foreigners from productive countries.
https://www.msn.com/en-us/money/companies/more-big-companies...
Text-only:
https://assets.msn.com/content/view/v2/Detail/en-in/AA1Pevu9...