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by bagels 1131 days ago
It's about leverage, with all the faang layoffs, they now don't have to pay as much for employees.
3 comments

More than that there's a whole strain of performative cost cutting due to the recession that's always seemed just over the horizon for the last year. Part of the goal is just to signal to investors you're ready for this continuously hypothetical event by pre tightening your belt as a company so they don't "price in" the recession into your stock. It's another negative outcome of basing so much of our evaluation of companies off of stock price which is partially to completely decoupled from the actual performance of companies.
> More than that there's a whole strain of performative cost cutting due to the recession that's always seemed just over the horizon for the last year.

You can say that again. I've spent last 3 months dealing with the effects of some pretty severe cost-cutting on my team. Now I recently learned my employers is going to spend billions on stock buy-backs.

That's just great news after the most recent push to increase our in-office time to increase "collaboration" ... when all of our teams are globally distributed so everything has to be Zoom meetings regardless of which chair your butt happens to be sitting in.

The juxtaposition of record profits, stock buybacks, and "we're not just raising prices because we can it's inflation for us too" is pretty telling. I often find myself wishing courts/government could just cut through the posturing on stuff like this and call bullshit, like the ever present promises of lower consumer prices during mergers because that's the magic test and courts are seemingly required to swallow whatever thin veneer companies promise. You don't need tax breaks you spent the last 3 on stock buybacks!

Anyways need to stop before this becomes more of a rambling rant. My work is also doing the occasional required week for "collaboration" but they've paused at 1 week a month for now. Have to justify this campus somehow... I like to think every manager bubbling up complaints actually got someone to listen but I'm betting they haven't changed their mind on the long term push even though we've shuttered 2 other locations in my area to consolidate people.

The situation is completely unhinged as more than 50 percent of inflation has been found to be driven by corporate profits.

WSJ (article): https://news.ycombinator.com/item?id=35795299

WSJ journalist (interview): https://youtu.be/gaO4rAJEnBc

US Rep. Katie Porter (congress hearing): https://youtu.be/hIuA5MNs87A

Cutting back on wages to increase leverage has been the point the entire time too, not because companies needed the cash