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> I can’t say I understand why trillion dollar companies are doing mass layoffs Most companies finance new projects with a combination of three things. Own capital, investor money and loans. Right now interest rates are high, I'm European so I can't speak for the US, but in some areas of the Eurozone the interest rates hit 12% a month ago. At that point it becomes impossible to utilise the loan part, because it's just too expensive. The investor money are similarly either slowing down or disappearing, not so much because they aren't around or that they don't have money, but because they are waiting to see what happens. This is fuelled not only by the loan part of the equation, but also by the inflation and global supply lines pushing the costs of projects to a point that has eaten a healthy chunk of the would-be investor profits, or put in another way, investors don't want to risk their money for 5% return when it was a 50% return a year ago. Lastly there is the own capital, one way to maintain this is to cut the work force, which aligns with how you need a smaller work force as things slow down. Where do people go? Well, typically they find new jobs. Some change professions entirely. Some retire. A few unfortunate people break down and head down dark paths. But really, it's not unlike layoffs in good periods, there is just more of it with fewer opportunities. > it still even possible to get a tech job in this downturn? As with most things this depends on your situation. What is your educational background, your skillset and your history of work. I can't speak for the US, but here in Europe some countries you could double our amount of good programmers and still need more. > good paying As with everything, this depends on the amount of people who can do what you do, but compensation doesn't necessarily go down during harder periods. But it does mean you'll likely have to justify what you do to earn it more than you did before. |
What's the difference between own capital and investor money for a company?