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by vsareto
2297 days ago
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>and make sure to have some cash on hand. This is where the panic goes to though: they might have 2-3 months cash right now, but might feel like they need 12-24 months cash to ride things out. People start worrying they'll lose their jobs and then their runway is at the mercy of the market. If a significant chunk of your wealth is in your house, that isn't easy to get out of during a downturn. Your tolerance for risk goes even further down if you have a family. Even further if your spouse doesn't work. These are rational decisions that look like panic selling. Tech work is a field that likely won't have to worry about this though. |
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With tech stocks tanking and economic growth likely sluggish for at least the next eighteen months, I can see large tech firms putting a hiring freeze in place, making it more difficult to switch jobs and more difficult to get hired if you DO get laid off.
Moreover, all that RSU comp that makes such a big portion of many tech workers take home pay just took a 20% haircut from a few weeks ago. It could well go lower.
Then there is the startup scene. I can definitely see current events massively impacting funding (see the recent Sequoia post). This could quite reasonably cause many startups to fail just like they did in 2008.
The IPO market is also going to be hit. I don't see any major unicorns doing an offering until the recovery happens. A lack of IPOs means, again, that the people willing to contribute to earlier stages of the pipeline, dry up.
Then there are secondary and tertiary effects. If the average tech worker sees their total comp drop by 10% to 20%, and quite a few lose their jobs, do you think the home you just bought in SF is going to be worth more in a year, or will there be some reduction (in appreciation if not absolute values)?