[FrustratedMonky]

So many tech layoffs in the news.

Any idea if this was just over-hiring? Twitch grew during the pandemic didn't it? Now viewership is going down.

Is it isolated case of a business normal ups/downs, and not some general "oh my god the tech sector is crashing".

[yugarinn]

Over-hiring adjustments is something I think was more common last year. By now, all companies "needing" layoffs to compensate should have already done so.

This feels more like Twitch just really struggling financially, as mentioned in the article.

[guhcampos]

For Twitch in particular I think this is a convergency both over-hiring and post pandemic business reduction.

Twitch got really big during the pandemic: lots of people had nothing else to do besides sit on their computers all day playing or watching games. Viewership exploded, creatorship exploded, hiring was easy in remote, so hiring exploded.

Post pandemic Viewership has likely tanked as people got back to work and school. Creatorship has also subsided as people can't play games 24/7 anymore, so any revenue growth they would have experienced over the pandemic has been likely off-set by now.

They countered that with layoffs last year, as most tech companies did, but their case was not just about laying off the extra hires, they also lost business they could not recoup, so they're downsizing even more.

[paxys]

Feels to me like tech companies saw how successful their late 2022/early 2023 layoffs were and decided to make it an annual thing.

[bmitc]

Over-hiring and restructuring explanations, i.e., excuses, are the most lame and slaps in the faces ever. Such reasons are solely management problems and due to management incompetence. I feel that regulation could be helpful here. The employer's side of at will employment should be reduced and other pressures to avoid these situations.

[lupusreal]

Overhiring always being a mismanagement issue due to incompetence is a cute narrative for the labor-vs-capital arguments, but it's not literally true unless you believe that failing to read the future accurately is mismanagement. Management's job is to do the best they can with the forecasts they have, and no reasonable person believes that forecasts can be accurate every time.

[bmitc]

You can rephrase management's duties to "predicting the future" as a way to maximalize the so-called difficulties of their roles, but that's an unrealistic description. And it is in fact management's primary duty to understand the evolution of their organization and to have mitigation strategies. Simply hiring when you can and then firing at the first sign of trouble and when investors throw a hissy fit is about the most amateur, incompetent approach available. A monkey could perform that role better.

I was recently laid off just a year after being hired. The layoff was described as not cost cutting but restructuring. The reality is that no restructuring has happened, morale has tanked, and attrition in key positions has occurred. Me being laid off means that management couldn't even plan out a year. Further, this company had a restructuring (i.e., layoff) in 2020 as well. If you need to "restructure" every three years, you don't know how to manage.

At will employment is a poor setup because companies hold all the cards. They should have much more pressure on abiding by contracts.

[kavok]

Predicting the future is literally a core upper management job duty. It was fairly obvious and should’ve been assumed that interest rates would eventually rise.

[kavok]

Isn’t over-hiring a form of management incompetence?

Money was too cheap, tech companies are now slapped with larger debt servicing costs and a less captive audience. Growth focused and delusion forecasting done by companies weren’t grounded in reality or pragmatism. This led to things like over-hiring.

[bmitc]

> Isn’t over-hiring a form of management incompetence?

I agree, but that's basically exactly what I said. Haha. Perhaps you meant to reply to another comment?

[brodo]

Maybe Twitch and others have finally moved to the "later" phase of the "grow first and make money later" strategy.

[wonderwonder]

I have a feeling this is going to continue as AI / LLM's become more capable. I know I am late to the party but was messing around with chatGPT the other day to see if it could help me with a code issue I was stuck on. It blew my mind!

I don't see how it and similar LLM's don't lead to massive replacement of tech workers and creatives.

[halfmatthalfcat]

No? It will just widen the gap between code monkeys and actual developers who build scalable systems. It seems like these takes are only espoused by those with nieve or little to no experience in software development.

[wonderwonder]

This is an odd thing to say when its actually happening in the real world. People are getting laid off and replaced with AI.

I guess all of the leaders at those businesses though are" naive or little to no experience in software development."

I have actually been present in a meeting and watched in real time where someone demoed an LLM that absolutely replaced the need to keep several engineers.

https://www.cnbc.com/2023/12/16/ai-job-losses-are-rising-but....

[halfmatthalfcat]

There is no way to quantify "software development losses from AI" versus post-COVID hiring frenzy layoffs and cheap capital becoming more expensive. Any definitive statement claiming such is purely conjecture.

No companies who are doing layoffs are saying "we're laying off developers because AI", everyone who is drawing those conclusions are making assumptions. AI can automate other menial, clerical stuff, but making that stretch to software development isn't founded.

ChatGPT and friends coincidentally started gaining traction as the economy started cooling off. Rather than drawing casual inferences to AI, it's much more likely that companies are laying off because of the latter rather than AI.

[wonderwonder]

https://www.cnn.com/2024/01/09/tech/duolingo-layoffs-due-to-...

[halfmatthalfcat]

> AI-related changes in how content is generated and shared

This has to do with them leveraging AI for their product, not replacing software developers writing code. They also didn't fire any full-timers, so I fail to see how this fits your assertions.

[ChatGTP]

This would imply there is an “end of work”. If these things are so good at augmenting your work, why would Google not keep their engineers, augment them with LLMs and just be more profitable and productive with the same number of people ? What does the lay off part get them ? Why be “just as productive” if you could be moar productive?

The fully replacing people thing would be if we had an AGI in which case I’ll be using one to augment myself and stay on top of the game.

[wonderwonder]

Because that's not how the real world works. Any product has a real world limit on the amount of money it can generate. Only so many companies are going to subscribe to product X. There are only so many customers in a particular niche.

Your assumption is that generating more work = more profit.

The idea that just adding more engineers leads to more money is an obvious fallacy. Cutting engineers though and continuing to receive the same income is an obvious way to increase net profit.

[ChatGTP]

Because that's not how the real world works. Any product has a real world limit on the amount of money it can generate.

Yes it is, I’ve never seen “the end of work”, have you ?

Google has an unlimited amount of issues to solve. I read about them here everyday. ChatGPT is even an existential threat to their search, if not directly, then through the internet becoming a huge piece of AI spam.

LLMs are not why Google is laying people off.

[wonderwonder]

No one is talking about or implying the end of work except you. What I am saying is that if a company can do more work with less people they will do it.

"Google has an unlimited amount of issues to solve" sure but that does not lead to profits otherwise they would just hire as many people as they could and make more money. Again that's not how it works.

"LLMs are not why Google is laying people off." Guess we will find out soon: https://dataconomy.com/2024/01/03/report-google-ai-layoffs-2...

[ChatGTP]

We don’t if that’s the real reason or the advertised reason that they’re laying people off. If was an investor I’d prefer the "AI is making us money for nothing story". But I know blog spam is also screwing their product up. It’s why I pay for an alternative search engine.

Ironically AI seems like a huge problem for Google's main business. Even if what you're saying is true, and all the layoffs are because of AI productivity gains. Well guess what? Other people can use AI to build cheap advertising businesses too? AI is cheap and it's getting cheaper, thanks to open source AI, it's accessible to everyone.

What I've come to realize is that, it's not Youtube that's valuable, or Google, or even Open AI, it's the information these things are providing access too. The information people are creating for them. The communities.

Now it seems like accessing that information is becoming democratized in a way that Google never really planned for. Soon I might be able to have something that can generate a youtube video for any topic I need, without youtube, just locally on my laptop or phone. That's going to be a problem for them. They know this.

[gumballindie]

There is no evidence that any of your statements are correct. Yet somehow people keep parroting such comments. Is OpenAI desperate for customers to gaslight?

[wonderwonder]

https://www.cnn.com/2024/01/09/tech/duolingo-layoffs-due-to-...

[gumballindie]

The context is software development.

[wonderwonder]

In my view, its the beginning. I hope I am wrong.

[gumballindie]

Without doubt, machine learning is here to stay. But it won't be anywhere near the promised value. People already realise they've been misled into thinking there's intelligence in it, and the narrative is changing. There's heavy backlash against ai support bots, ai generated content, and code is proven to not work as advertised. Furthermore, people are taking action against the rampant intellectual property theft and the less content to steal the less useful these tools are. Eventually the hype will stabilize and things will be back to a new normal.

[songbird23]

i dont fully understand what amortized means but this[0] article is talking about how it could be the reason for layoffs in 2024

[0]https://blog.pragmaticengineer.com/section-174

[_heimdall]

Amortization is basically just a way of splitting the cost of something out over multiple years to change how much you may owe in taxes.

In this case, previously software engineers' salaries were considered an operating expense like any other salary, and the full amount of that was used to decrease how much profit you have to pay taxes on. Now you can only write off a portion of the salary, having to split it over multiple years' taxes instead.

This is really common with R&D expenses, physical equipment, etc. The big change was that software engineers are now considered an R&D expense rather than someone working to assemble a final product, for example.

[CoastalCoder]

> Amortization is basically just a way of splitting the cost of something out over multiple years to change how much you may owe in taxes.

Are there any non-tax reasons that companies, accountants, lenders, etc. would use the concept of amortization?

I.e., is there some kind non-tax-related of financial planning that finds the concept of amortization useful for decision-making?

[ozymandias8]

Some business that have spending limits like professional football clubs use amortization to make their spending look lower than it is.

They can amortize the cost of new players over the length of that player's contract while accounting player sales as instant profits.

[_heimdall]

As far as I'm aware amortization is only used for tax purposes. I guess you could use the adjusted profits and losses if you had a reason to show lower profits, but as far as financial planning goes the money has already been spent so its largely a game of when you want the expense to show up on your tax bill.

[IndoCanada]

Indeed... There are plenty of unfilled jobs.

[beanjuiceII]

its just the perfect time to cut fat(even if you don't need to) because when things are good, it looks worse to do cuts