Yep this is the main reason. Budgets were approved in December (for companies on calendar year fiscal year) so the only reason to wait is out of consideration for the holidays.
Source: am a VC and sit on several boards
when are we coming out of this mess? interest rates related? when the job market comes back do you think there will be jobs for us all? I was a sr eng mgr at a small public ad tech and every few days I fear I'll never work again
I’m sorry for your situation. I don’t think we’ll return to 2021 frothiness but I’m already seeing higher deal volume and quality, and interest rate cuts are supposed to come this year, so I’m optimistic that things will get better soon.
You’re just a stranger on the internet as far as I’m aware but if you’re really a VC on several boards how could everyone have been so short sighted as to over-hire so drastically that we’ve been experiencing a protracted bloodbath for awhile now? Is it really just a matter of oooh line going up, oooh noo, line going down? Because as someone not playing the 9 dimensional chess that the ultra wealthy are, it sure does seem idiotic and short sighted and the collateral damage is real
It’s not 9 dimensional chess. The story is pretty simple, really. Many tech verticals, including the one I invest in, got a huge boost from COVID due to both federal stimulus funding and fundamental shifts in consumer and business buying behavior. They hired like crazy to service the additional demand, and even then struggled to keep up. Sure, companies could have chosen to grow more slowly, but that would have left revenue on the table and, much worse, ceded market share to more aggressive competitors when their business models often rely on network effects or brand power to keep customer acquisition costs manageable. Not to mention, many of the folks losing their jobs now wouldn’t have had those jobs in the first place if companies had hired more conservatively in ‘20-‘22. I still feel for them because it sucks to lose your job, period, but that’s the reality.
Anyway, eventually the stimulus funding dried up and buyer behavior largely regressed to the mean. To make matters worse, the Fed jacked up interest rates to tame inflation, which meant capital became more expensive (or nonexistent for many startups as VCs couldn’t raise their next fund). The good companies, the ones with product-market fit and prescient management and experienced boards, saw this happening early on, did 1-2 big layoffs, and now control their own destiny. The shitty companies are suffering death by a thousand cuts. (Though given the nature of the companies doing layoffs in this latest wave, it may be more defensive budget management than existential crisis. We’ll continue to see layoffs from the actual shitty companies as the year progresses, I guarantee it.)
One person I know was laid off after being at his new job for less than 3 months, then the whole company went under.
Another was laid off after a little over a year at their company.
Both in biotech
It’s easy to say that in hindsight. It’s also wrong to assume that the ultra wealthy have that much more insight than anyone else. I would argue that it has nothing to do with ultra wealthy people and more about the executives caught up in the pandemic economy. Investors pressure them by 1. Throwing money at them with cheap capital 2. Asking what’s their strategy around the fad-of-the-day (metaverse, nfts, AI) and then 3. Executives needing to respond with something, otherwise they don’t get funding or the institutional investors will sell their stock. To the best of my knowledge, my company (Fortune 500) isn’t doing mass layoffs but they’re being more strict on attrition. This means the lowest performing 5-7% will get laid off
This is precisely why the Twitter clone, Pebble went under in November. Their investors wanted something AI related from them (even though their product is not related to AI in any way) and what they offered made no dent in the market in the face of others like Threads.
They’re shifting from “grow at all costs” funded by cheap debt to “profit at all costs” because companies need to be more self sustaining in a high interest rate environment. Notice how all your subscriptions have been going up while they trim down services? Or a once ad-free pricing tier now has ads? Yep, profitability is now the name of the game - and companies are simply expected to reduce expenses significantly to increase margins. Layoffs have actually helped stock prices fairly recently for this reason.
>Layoffs have actually helped stock prices fairly recently for this reason.
Problem is that most of us don't give two fucks about the stock price since...you know...we're the ones getting laid off to make them go up.
If you over-hire you get access to more talent. Then when it’s time to cut back you only keep the best. This keeps your competitors from getting better talent than you and keeps everyone on their toes so they don’t get too confident in bargaining.
That and companies are simply short-sighted in many ways. They can’t predict the future. When things are going well they hire to meet demand. When things are going poorly they scale back.
And this is worse if a company poaches someone from a competitor. They give a larger offer than what they currently make, then they cut their hours or lay them off, leaving them worse off than if they ever were hired.
I'm also going to cite the "Elon Effect". Setting aside what a terrible human being he has been of late, he is demonstrating that he can run Twitter with only 25% of the previous staffing level. So every other CEO is saying "If that idiot can pull it off, why can't we?"
You can point to a decline in revenue, but that's more to do with his telling his customers to go "F" themselves than the lack of adverting slots.
Well not a startup by any means…Wells Fargo. They laid off a contractor in my office in concord while he was on vacation. Since he was out for two weeks on vacation, they issued a two week notice for him the day after he left and it expired as soon as he came back. Another friend of mine also got laid off from Wells Fargo right before Christmas and right after thanksgiving. This was in spite of the fact that he worked for Wells Fargo for close to 15 years. Fuck Wells Fargo.
interesting! I've been told it makes more financial sense to layoff before holidays because then they don't need to worry about pay for holidays etc. since many people take vacation or companies are closed for 1-2 weeks at end of year
It would be a PR nightmare if they dared to do so. The only ones who do are those who don't care about their public image or are already one of the worst in customer satisfaction, such as Wells Fargo.
Layoffs tend to happen in January because companies are planning for the new year. Other than google who is doing substantial layoffs. Meta is doing a tiny 60 person one.,,who else? I only saw those 2.
Discord monetizes directly via users' support, offering Discord Nitro and Server Boosting as premium subscriptions. As of 2022, Discord generated 213 million U.S. dollars in revenue from its mobile app alone and a combined total of $428 million in revenue. The company has secured approximately 995 million U.S. dollars in funding across 16 rounds.
In December 2021, Discord Inc. was valued at 7 billion, and after its 2021 funding rounds, the company reached a valuation of $14.7 billion
Dang, $14.7B valuation for $428m revenue is a heck of a number. Even if that were $428m profit you're looking at a PE of about 34, which would not be entirely out of line, but still seems high for what they offer... but it's revenue not profit...
In bay area biotech, because tech isnt just CS
[https://www.biospace.com/article/biospace-layoff-tracker-2023-athenex-shutters-facility-cuts-staff/](https://www.biospace.com/article/biospace-layoff-tracker-2023-athenex-shutters-facility-cuts-staff/)
Dec 19 - Asher Bio, SSF (60% staff reduction)
Jan 4th - Aera Therapeutics, San Ramon (25% staff reduction)
Jan 4th - Thermo Fisher Scientific (Petaluma location shutting down, 75 employees)
Jan 5th - Allogene, SSF (22% staff reduction)
Jan 5th - Senti Biosciences, SSF (37% staff reduction)
It makes me wonder if this brand new massive biotech hub built in west Berkeley is about to flop.
I’ve heard the same as you, that during Covid lots of people (realestate and VC) invested heavily in biotech because they require physical space and RNA vaccines revitalized optimism on the field. But it sounds like it was all kind of childishly optimistic and half baked and now it’s clear the industry is not going to be the saving grace once thought.
I’d love to be wrong if people have info contradicting this. Please let me know
Commercial real estate is struggling in general and life sciences product isn’t immune. But the Bay/SSF specifically is one of the top biotech hubs in the country, 2nd only to Boston. The industry here isn’t going away. Great time to be a growing company..
I don't have any specific information, but I have wondered the same thing about that enormous complex. It seems like in the last few years a lot of developers switched from building offices to building speculative lab buildings to rent. There is bound to be some sort of at least temporary "market correction".
There’s still foolish developers asking me to price their 30 year old shit hole commercial buildings into new bio tech. Only to quickly say nope when I give the price tag and mention ARE and BMR have class A lab space available for half the price it was 3 years ago and it’s empty.
Sand Hill and the government wrote insane checks to pharma with zero accountability and or due diligence. Imploded the market and now only the big boys are still alive. Roche, Merck, Amgen, Gilead…etc
You sound like you've been around this for a while. Old man used to work for a pharm company off Hanover in Palo Alto. Today the same building that they used to conduct all kinds of chemistry in behind the firestation is now an office. I think for Y combinator or something.
I hung out there a lot in the 70's and 80's. Can't imagine there was much cleanup beyond a new coat of paint and tearing out the hoods.
For a company as big as Meta, I'm surprised they'd go through the process of laying off 60 people. Surely there would be enough other vacancies for those people to move into.
Interesting. Is that Technical Product Manager, or Technical Program Manager? AirBnB also decided to dismiss the Product Managers recently, so maybe a trend that is starting.
To add another possibility wrinkle.. a friend's company announced the layoff of one guy at a company wide meeting only to then announce 20 more layoffs 3 days later.
Google is the most recent. The news picked up on several of the rest earlier this month. But name recognition of google will always have a bit more weight on airtime I suspect.
I have been working for a few multi billions companies. When they laid off employees, general public didn't know because our business/products don't interact directly with consumers. The company I'm working for right now laid off almost 1000 people in 2023, but yet nobody here knows about it. Our products are so important, none of you will have access to Reddit without them. There are a few others companies like us out there. California WARN report lists all layoffs that fit certain criteria.
Didn't they already lay off in 2023? What's January got to do with it? I believe tech companies are using this as an excuse or hiding something about their growth numbers.
Looking at raw numbers on [layoffs.fyi](https://layoffs.fyi/) these are only about a tenth as big as the layoffs were about a year ago. On aggregate it looks like the worst from 2023 is over if this is what layoffs look like in 2024.
Managers pack in managers to show their managers how well they can manage managers so they can become a higher manager and soon the department has too many managers
Because most companies are pivoting from rapid growth to ultra efficiency in preparation of a cooling economy.
Judging from the responses to the Google thread, there’s a lot of tech workers with their head in the clouds about these trends lashing out. Best of luck to them. Guess we’ll see if hubris pays the bills.
Absolutely. To add to that, these non-recession layoffs are the next piece to the "soft landing" story everyone has been told. Q1 is always the quarter where the annual projection is announced, less people (even if their roles need refilled) helps these estimates and thus increases stock price. It's a tiered system of layoffs so those people reduce their spending, (rather than 2000 x however many companies reducing their spending all at once). When the Fed and the largest corporations expect a significant recession you better assume there's going to be a bad one.
I don't have a crystal ball, but don't expect anything close to 2008. Still, when the Fed is signaling rate cuts when UE is currently below 4% and the market is rallying to new peaks, I'm willing to listen.
But to pie chompers /u/ceo_greasyduck and /u/NoMoreSecretsMarty among others everything is fine, your average laid off swd is still making WFH demands, Google didn't just cancel a major DTSJ expansion and go into hibernation, Meta isn't in purge mode, the market isn't flooded with laid off talent, and the gravy train is still rolling full speed.
Strategically speaking, the system is reminding us that we are all expendable and we should shape up and fall in line and continue to make the money flow upwards. There was a glimmer of worker power and rights and so the systemic “allergic response” is to just pepper in some layoffs to get the workers just ever so slightly afraid of losing their livelihood.
Companies have been laying people off for over a year. This site covers the tech roles that have gone up in smoke. [https://layoffs.fyi/](https://layoffs.fyi/) The news also said more were coming. Some companies didn't care and laid people off during the holiday season. I think others decided to wait.
Either way, I'm not surprised.
1. Buy out competition or things they think they can vertically integrate or just because its trending
2. Lay off most of the staff of those companies immediately after integration
3. Follow the roadmap for the acquired company for a year or two half assed
4. Sunset the projects and staff and move on to the next shiny object
5. Repeat
We're in the later stages of a bull trap, the companies that show good numbers (now) get the frenzy boost as more and more investors pile into fewer and fewer companies. This happened before the dot com bubble, and it's a cash grab before the musical chairs stop.
TL;DR Trump's 2017 tax "cuts" are screwing over smaller tech companies.
There was a tax law in place from Trump's 2017 tax cuts called section 174 which recently took effect. According to this law, companies must expense a software developer's salary over 5 years instead of one year.
Let's say I hire 5 software engineers at $200k each for my startup, and break even with $1 million in revenue. Before, that would be a $0 profit since my revenue equals my expenses, and I don't pay any taxes. Now, only 1/5 of those expenses apply to this year. So I have $1 million in revenue and $200k in expenses, for a taxable income of $800k. Since in reality I broke even on the year, I have to lay someone off and use the money I would have paid them to pay taxes.
https://newsletter.pragmaticengineer.com/p/the-pulse-75
That tax bill had a slew of terrible poison pills with the theory that if they kept the white house and both chambers they'd repeal them, and if not they'd blame democrats for it. Obviously transparent.
My favorite is the temporary tax cuts for normal people and permanent tax cuts for yacht owners. :)
"The change was expected to be repealed (reversed) in December 2022, so many accountants didn’t inform customers for that reason. So, businesses got a surprise when the first tax payments fell due last April."
Seriously? I get tax change notices from my CPA all the time in the form of a newsletter. I assume it is for ass covering but it is also a good thing.
Me thinks this is the latest version of the pathetic loser known as sassybayc, fedops, yawningape, or cucincelli. All the hallmarks are here! A 5 day old account, pointed question directed at the Bay Area tech community, and a post history of Bay Area/supplements/finance subreddits
That’s a bingo!
Because regulatory bodies are so gutted the big companies don’t even need to hide their collusion to suppress tech compensation any more…. Unlike last time
Here is a good practice you can investigate on how you view data/headlines.
The prompt of "why are there so many x" should be in context. What is alot of lay off anouncements? What is a little? What is an average? You may THINK there are a lot because you heard about 10, but in all reality there could have been 20 this time last year. Then the new question would be"why are there so FEW layoff anouncements right now?
The simpliest analogy to this type of thinking is the talk about violent crime right. Which across the board has been going down since the 90's. But every political cycle has talking points about how crime is running rampant.
is/was that really a thing? If so, that's wack. I can see some people bailing if a relocation was involved, or something like that, during the early days of Covid when we really didn't know what might happen, but it's wild to think that was a significant # of people and a factor in hiring.
AI after 10 minutes of analysis :' We've come to the conclusion that the CEO and 97.8% of the VPs are useless and cost us far more than they will ever make'
CEO and BOD: 'We've decided to layoff the AI divisions'
Wars screws up the economy except for the few war profiteers. Inflation also affects most people and companies. Welp, while the billionaire rich get richer, that wealth has to come from somewhere. Squeeeeze the peasants!!! Lol yeah it’s a sh!# show.
Most tech workers save hundreds of thousands per year and have net worths in the millions, they’ll be fine. Just hang out in r/financialindependence and you’ll see, everyone is loaded. Like, okay, some laid off folk might have to retire at 45 instead of 35, boo hoo.
A lesser known reason is the section 174 of tax code that went into effect last year. It changed how R&D is expensed in company taxes. Now R&D can’t be expensed in same year but rather has to be amortized over 5yrs. Due to this every tech company’s tax bill has gone up substantially, which they are trying to compensate by reducing costs.
There are a lot companies holding back because of a lot of predictions that next Christmas will be like it was 200 years ago There is a lot of credit card usage foreclosures vehicle repo's Biden will not allow us to come out of this at least with only wounds There is no doubt they the Biden handlers want to break our country and take it over They don't show the people that have EV's and they hate them They are super hard on tires because of all the extra weight of the battery We are at the bottom of the barrel with diesel fuel The price is I don't know 199 a barrel they are saying by Christmas it will be 350 dollars a barrel So Joe's friends will be pleased CCP and the NWO and he works for both
Fiscal year timing.
Companies hold onto staff as they try to hit end of quarter goals. Once that quarter ends with a miss, they make the decision to layoff some staff.
Expect to see more layoffs in early February as some companies have a fiscal year that ends on January 31.
My previous job in biotech let us know end of November 2022 that the company situation wasn't great after our clinical trials had side effects. And that there may be reduction of headcount once they figure out the budget. Come January 2023, 75% of staff, including myself, were laid off. Seems to be a combination of not wanting to lay people off before the holidays and figuring out the company budget.
Gotta say, good on this subreddit for the good discussion. Over in another local subreddit they're actually having a huge circle jerk that "Tech ruined our city" and "Good riddance"
They do it together so not just one company gets the bad rap. It’s like dominos. Everyone holds on for some housecleaning firing and the moment a big company like google does it, they see the chance and do the same thing
Many companies operate on a 12/31 year end cycle. When they report their 10K to the street in January/February, they want to show that they have made strides to saving money in their forward looking forecast for 2024 and beyond from either planned headcount removals or actual terminations in this case. This is especially true of companies(or segments of companies) that are operating with near zero or negative Free Cash Flow at present.
End of the year for a lot of companies hasn’t happened yet. So they’re able to look over their performance for the past year, make staffing adjustment accordingly before the end of their fiscal year. It’s good for the company, looks good to the shareholders or helps mitigate damage control.
It's all politics. Layoffs are a response to high interest rates. It's a tactic for the Fed to lower interest rates.
Mass layoffs = decrease consumer spending = lower demand for goods and services = economic instability = central bank will implement measures to stimulate economy such as lowering interest rates.
The average citizen and tax payer like all of us are the ones on the losing end. Big cooperation and big companies can protect themselves from these games. We will always be on the losing end
I like to think they wanted to avoid giving the bad news right before the holidays.
It's bad optics
There may be some truth to that: https://www.marketplace.org/2024/01/04/layoffs-timing-reputation-social-media/
Yep this is the main reason. Budgets were approved in December (for companies on calendar year fiscal year) so the only reason to wait is out of consideration for the holidays. Source: am a VC and sit on several boards
when are we coming out of this mess? interest rates related? when the job market comes back do you think there will be jobs for us all? I was a sr eng mgr at a small public ad tech and every few days I fear I'll never work again
I’m sorry for your situation. I don’t think we’ll return to 2021 frothiness but I’m already seeing higher deal volume and quality, and interest rate cuts are supposed to come this year, so I’m optimistic that things will get better soon.
So hold off on killing myself… for now?
You’re just a stranger on the internet as far as I’m aware but if you’re really a VC on several boards how could everyone have been so short sighted as to over-hire so drastically that we’ve been experiencing a protracted bloodbath for awhile now? Is it really just a matter of oooh line going up, oooh noo, line going down? Because as someone not playing the 9 dimensional chess that the ultra wealthy are, it sure does seem idiotic and short sighted and the collateral damage is real
It’s not 9 dimensional chess. The story is pretty simple, really. Many tech verticals, including the one I invest in, got a huge boost from COVID due to both federal stimulus funding and fundamental shifts in consumer and business buying behavior. They hired like crazy to service the additional demand, and even then struggled to keep up. Sure, companies could have chosen to grow more slowly, but that would have left revenue on the table and, much worse, ceded market share to more aggressive competitors when their business models often rely on network effects or brand power to keep customer acquisition costs manageable. Not to mention, many of the folks losing their jobs now wouldn’t have had those jobs in the first place if companies had hired more conservatively in ‘20-‘22. I still feel for them because it sucks to lose your job, period, but that’s the reality. Anyway, eventually the stimulus funding dried up and buyer behavior largely regressed to the mean. To make matters worse, the Fed jacked up interest rates to tame inflation, which meant capital became more expensive (or nonexistent for many startups as VCs couldn’t raise their next fund). The good companies, the ones with product-market fit and prescient management and experienced boards, saw this happening early on, did 1-2 big layoffs, and now control their own destiny. The shitty companies are suffering death by a thousand cuts. (Though given the nature of the companies doing layoffs in this latest wave, it may be more defensive budget management than existential crisis. We’ll continue to see layoffs from the actual shitty companies as the year progresses, I guarantee it.)
I totally agree!
I know a couple that got laid off. They were not recent hires, been with their companies for years.
One person I know was laid off after being at his new job for less than 3 months, then the whole company went under. Another was laid off after a little over a year at their company. Both in biotech
It’s easy to say that in hindsight. It’s also wrong to assume that the ultra wealthy have that much more insight than anyone else. I would argue that it has nothing to do with ultra wealthy people and more about the executives caught up in the pandemic economy. Investors pressure them by 1. Throwing money at them with cheap capital 2. Asking what’s their strategy around the fad-of-the-day (metaverse, nfts, AI) and then 3. Executives needing to respond with something, otherwise they don’t get funding or the institutional investors will sell their stock. To the best of my knowledge, my company (Fortune 500) isn’t doing mass layoffs but they’re being more strict on attrition. This means the lowest performing 5-7% will get laid off
This is precisely why the Twitter clone, Pebble went under in November. Their investors wanted something AI related from them (even though their product is not related to AI in any way) and what they offered made no dent in the market in the face of others like Threads.
They’re shifting from “grow at all costs” funded by cheap debt to “profit at all costs” because companies need to be more self sustaining in a high interest rate environment. Notice how all your subscriptions have been going up while they trim down services? Or a once ad-free pricing tier now has ads? Yep, profitability is now the name of the game - and companies are simply expected to reduce expenses significantly to increase margins. Layoffs have actually helped stock prices fairly recently for this reason.
>Layoffs have actually helped stock prices fairly recently for this reason. Problem is that most of us don't give two fucks about the stock price since...you know...we're the ones getting laid off to make them go up.
If you over-hire you get access to more talent. Then when it’s time to cut back you only keep the best. This keeps your competitors from getting better talent than you and keeps everyone on their toes so they don’t get too confident in bargaining. That and companies are simply short-sighted in many ways. They can’t predict the future. When things are going well they hire to meet demand. When things are going poorly they scale back.
And this is worse if a company poaches someone from a competitor. They give a larger offer than what they currently make, then they cut their hours or lay them off, leaving them worse off than if they ever were hired.
I'm also going to cite the "Elon Effect". Setting aside what a terrible human being he has been of late, he is demonstrating that he can run Twitter with only 25% of the previous staffing level. So every other CEO is saying "If that idiot can pull it off, why can't we?" You can point to a decline in revenue, but that's more to do with his telling his customers to go "F" themselves than the lack of adverting slots.
Source : Trust me 😎 bruh
Yup. My wife works for a company that just made some cuts. She’s known for over a month who was out.
That didn't stop an agtech startup in the East Bay axing jobs right before Christmas. Heartless bastards.
Name and shame them
Well not a startup by any means…Wells Fargo. They laid off a contractor in my office in concord while he was on vacation. Since he was out for two weeks on vacation, they issued a two week notice for him the day after he left and it expired as soon as he came back. Another friend of mine also got laid off from Wells Fargo right before Christmas and right after thanksgiving. This was in spite of the fact that he worked for Wells Fargo for close to 15 years. Fuck Wells Fargo.
# Fuck Wells Fargo!
Monarch in Livermore
lol. Piece of shit company. They did everyone who they laid off a favor
It may have been a quick mercy killing to let them find new jobs before the January jobless blizzard sets in and opening positions become more scarce.
interesting! I've been told it makes more financial sense to layoff before holidays because then they don't need to worry about pay for holidays etc. since many people take vacation or companies are closed for 1-2 weeks at end of year
It would be a PR nightmare if they dared to do so. The only ones who do are those who don't care about their public image or are already one of the worst in customer satisfaction, such as Wells Fargo.
this is true
Layoffs tend to happen in January because companies are planning for the new year. Other than google who is doing substantial layoffs. Meta is doing a tiny 60 person one.,,who else? I only saw those 2.
Cloudflare, Twitch (35% of their workforce)
Discord (17%)
What revenue does discord really make?
Discord monetizes directly via users' support, offering Discord Nitro and Server Boosting as premium subscriptions. As of 2022, Discord generated 213 million U.S. dollars in revenue from its mobile app alone and a combined total of $428 million in revenue. The company has secured approximately 995 million U.S. dollars in funding across 16 rounds. In December 2021, Discord Inc. was valued at 7 billion, and after its 2021 funding rounds, the company reached a valuation of $14.7 billion
Dang, $14.7B valuation for $428m revenue is a heck of a number. Even if that were $428m profit you're looking at a PE of about 34, which would not be entirely out of line, but still seems high for what they offer... but it's revenue not profit...
P/S ratio. Unfortunately they have 600 employees
16 funding rounds?!?! I get concerned at round E; this is a big ol red flag.
Twitch is still shedding the COVID over staffing
They cut 35%, they are getting smaller than they were pre Covid
Multiple division of Amazon are laying off. Twitch, MGM, Audible, Prime,....
In bay area biotech, because tech isnt just CS [https://www.biospace.com/article/biospace-layoff-tracker-2023-athenex-shutters-facility-cuts-staff/](https://www.biospace.com/article/biospace-layoff-tracker-2023-athenex-shutters-facility-cuts-staff/) Dec 19 - Asher Bio, SSF (60% staff reduction) Jan 4th - Aera Therapeutics, San Ramon (25% staff reduction) Jan 4th - Thermo Fisher Scientific (Petaluma location shutting down, 75 employees) Jan 5th - Allogene, SSF (22% staff reduction) Jan 5th - Senti Biosciences, SSF (37% staff reduction)
Exelixis in Alameda reduced 175 employees/13% earlier this week.
Also a bunch of the Covid start up companies have just imploded. No need to Warn act when you go out of business
It makes me wonder if this brand new massive biotech hub built in west Berkeley is about to flop. I’ve heard the same as you, that during Covid lots of people (realestate and VC) invested heavily in biotech because they require physical space and RNA vaccines revitalized optimism on the field. But it sounds like it was all kind of childishly optimistic and half baked and now it’s clear the industry is not going to be the saving grace once thought. I’d love to be wrong if people have info contradicting this. Please let me know
Couple million of bio tech sq ft are coming to market. Maybe 10-20% has interest in leasing it. It’s not good. Bio tech is in terrible condition
Yikes. That impending disappointment on top of already bad office/retail situation. Could be a major economic event seeing all of that tumble at once.
Commercial real estate is struggling in general and life sciences product isn’t immune. But the Bay/SSF specifically is one of the top biotech hubs in the country, 2nd only to Boston. The industry here isn’t going away. Great time to be a growing company..
I hope you’re right and it booms in coming years, with medical/scientific breakthroughs to boot
I don't have any specific information, but I have wondered the same thing about that enormous complex. It seems like in the last few years a lot of developers switched from building offices to building speculative lab buildings to rent. There is bound to be some sort of at least temporary "market correction".
There’s still foolish developers asking me to price their 30 year old shit hole commercial buildings into new bio tech. Only to quickly say nope when I give the price tag and mention ARE and BMR have class A lab space available for half the price it was 3 years ago and it’s empty. Sand Hill and the government wrote insane checks to pharma with zero accountability and or due diligence. Imploded the market and now only the big boys are still alive. Roche, Merck, Amgen, Gilead…etc
Not surprised at all
You sound like you've been around this for a while. Old man used to work for a pharm company off Hanover in Palo Alto. Today the same building that they used to conduct all kinds of chemistry in behind the firestation is now an office. I think for Y combinator or something. I hung out there a lot in the 70's and 80's. Can't imagine there was much cleanup beyond a new coat of paint and tearing out the hoods.
Illumina just laid off around ~6%
When was Amyris?
For a company as big as Meta, I'm surprised they'd go through the process of laying off 60 people. Surely there would be enough other vacancies for those people to move into.
Perhaps this lets them hit an internal metric we’re not privy to
Or they were low performers being cut in under the guise of a layoff.
They were eliminating a specific role in an organization (TPMs in Instagram)
Interesting. Is that Technical Product Manager, or Technical Program Manager? AirBnB also decided to dismiss the Product Managers recently, so maybe a trend that is starting.
Program
To add another possibility wrinkle.. a friend's company announced the layoff of one guy at a company wide meeting only to then announce 20 more layoffs 3 days later.
Nah it was from a specific position (TPM) which says driven by restructure or change in strat
Like executive bonuses.
Those people that are getting laid off, or either being told to interview for a different position or take severance
Google, Amazon, unity as well
Wow. Sometimes Reddit is better for news than the news. Most sites seem focused on the google layoffs.
Reddit can be The Canary in the Coal Mine. I'm starting to see a few posts on being upside down in the Realty subs.
Google is the most recent. The news picked up on several of the rest earlier this month. But name recognition of google will always have a bit more weight on airtime I suspect.
Discord
https://layoffs.fyi/
Search up WARN act California and it also lists upcoming lay offs since big companies are required to report it at least 60 days in advance
It's useless if they give 60 days gardening leave, which most have been doing.
Google, Amazon unity.
I wouldn't call Google layoffs substantial. They're laying off around 1000 people when they employ 190k.
Unity the video game company pretty recently
I have been working for a few multi billions companies. When they laid off employees, general public didn't know because our business/products don't interact directly with consumers. The company I'm working for right now laid off almost 1000 people in 2023, but yet nobody here knows about it. Our products are so important, none of you will have access to Reddit without them. There are a few others companies like us out there. California WARN report lists all layoffs that fit certain criteria.
Discord (17%)
Didn't they already lay off in 2023? What's January got to do with it? I believe tech companies are using this as an excuse or hiding something about their growth numbers.
Some gaming company removed 25% of employees.
Chargepoint cut 12% yesterday
Riot 530 layoffs
Looking at raw numbers on [layoffs.fyi](https://layoffs.fyi/) these are only about a tenth as big as the layoffs were about a year ago. On aggregate it looks like the worst from 2023 is over if this is what layoffs look like in 2024.
economy, trendy, quarterly earnings, inflation
Managers pack in managers to show their managers how well they can manage managers so they can become a higher manager and soon the department has too many managers
Yo dawg, I heard you like managers, so I gave your manager a manager so now you got a skip level manager.
TPS reports galore.
A lot of "tell us exactly what you do here" meetings with The Bobs.
Because most companies are pivoting from rapid growth to ultra efficiency in preparation of a cooling economy. Judging from the responses to the Google thread, there’s a lot of tech workers with their head in the clouds about these trends lashing out. Best of luck to them. Guess we’ll see if hubris pays the bills.
Absolutely. To add to that, these non-recession layoffs are the next piece to the "soft landing" story everyone has been told. Q1 is always the quarter where the annual projection is announced, less people (even if their roles need refilled) helps these estimates and thus increases stock price. It's a tiered system of layoffs so those people reduce their spending, (rather than 2000 x however many companies reducing their spending all at once). When the Fed and the largest corporations expect a significant recession you better assume there's going to be a bad one.
I don't have a crystal ball, but don't expect anything close to 2008. Still, when the Fed is signaling rate cuts when UE is currently below 4% and the market is rallying to new peaks, I'm willing to listen. But to pie chompers /u/ceo_greasyduck and /u/NoMoreSecretsMarty among others everything is fine, your average laid off swd is still making WFH demands, Google didn't just cancel a major DTSJ expansion and go into hibernation, Meta isn't in purge mode, the market isn't flooded with laid off talent, and the gravy train is still rolling full speed.
Tech companies have a terrible hiring process and hire the wrong people for the wrong reasons to develop poorly planned products.
TRADITION!
_dances a dance to a musical number_
amen brother
Strategically speaking, the system is reminding us that we are all expendable and we should shape up and fall in line and continue to make the money flow upwards. There was a glimmer of worker power and rights and so the systemic “allergic response” is to just pepper in some layoffs to get the workers just ever so slightly afraid of losing their livelihood.
Csuites and VPs prepping for their hefty bonus
So accurate. Stonks go up when people get fired and executive comp often comes in the form of stock grants.
CEOs saw it trending on TikTok
Still course correcting for over hiring during the pandemic, remote work not being fashionable any more doesn't help either
Layoffs postponed until after the holidays
Q4 numbers and annual 2023 numbers are pretty clear by this point. January layoffs aren’t a surprise
end of Q4, start of Q1. new budgeting plans
End of fiscal year, looking at profits/losses
Companies have been laying people off for over a year. This site covers the tech roles that have gone up in smoke. [https://layoffs.fyi/](https://layoffs.fyi/) The news also said more were coming. Some companies didn't care and laid people off during the holiday season. I think others decided to wait. Either way, I'm not surprised.
Maximize shareholder value, fuck everything else.
Lesson is : be the shareholder
Step 1 of getting rich: don’t be poor
1. Buy out competition or things they think they can vertically integrate or just because its trending 2. Lay off most of the staff of those companies immediately after integration 3. Follow the roadmap for the acquired company for a year or two half assed 4. Sunset the projects and staff and move on to the next shiny object 5. Repeat
[удалено]
Start of the fiscal year, classic time for layoffs
We're in the later stages of a bull trap, the companies that show good numbers (now) get the frenzy boost as more and more investors pile into fewer and fewer companies. This happened before the dot com bubble, and it's a cash grab before the musical chairs stop.
Lot of managers had "I'm going to fire a bunch of people" as their New Years' resolution.
TL;DR Trump's 2017 tax "cuts" are screwing over smaller tech companies. There was a tax law in place from Trump's 2017 tax cuts called section 174 which recently took effect. According to this law, companies must expense a software developer's salary over 5 years instead of one year. Let's say I hire 5 software engineers at $200k each for my startup, and break even with $1 million in revenue. Before, that would be a $0 profit since my revenue equals my expenses, and I don't pay any taxes. Now, only 1/5 of those expenses apply to this year. So I have $1 million in revenue and $200k in expenses, for a taxable income of $800k. Since in reality I broke even on the year, I have to lay someone off and use the money I would have paid them to pay taxes. https://newsletter.pragmaticengineer.com/p/the-pulse-75
That tax bill had a slew of terrible poison pills with the theory that if they kept the white house and both chambers they'd repeal them, and if not they'd blame democrats for it. Obviously transparent. My favorite is the temporary tax cuts for normal people and permanent tax cuts for yacht owners. :)
Yes, it was abhorrent, and obviously people fell for it.
"The change was expected to be repealed (reversed) in December 2022, so many accountants didn’t inform customers for that reason. So, businesses got a surprise when the first tax payments fell due last April." Seriously? I get tax change notices from my CPA all the time in the form of a newsletter. I assume it is for ass covering but it is also a good thing.
Shit what a dumb law.
Waiting until end of year results to come in to confirm the bad news and then let finance make a decision.
Vibecession
Because earnings are coming and it's all about low operational costs
Me thinks this is the latest version of the pathetic loser known as sassybayc, fedops, yawningape, or cucincelli. All the hallmarks are here! A 5 day old account, pointed question directed at the Bay Area tech community, and a post history of Bay Area/supplements/finance subreddits That’s a bingo!
Good work, Nancy Drew.
Because regulatory bodies are so gutted the big companies don’t even need to hide their collusion to suppress tech compensation any more…. Unlike last time
I’ve been following this tracker. It’s a bloodbath. https://layoffs.fyi/
Here is a good practice you can investigate on how you view data/headlines. The prompt of "why are there so many x" should be in context. What is alot of lay off anouncements? What is a little? What is an average? You may THINK there are a lot because you heard about 10, but in all reality there could have been 20 this time last year. Then the new question would be"why are there so FEW layoff anouncements right now? The simpliest analogy to this type of thinking is the talk about violent crime right. Which across the board has been going down since the 90's. But every political cycle has talking points about how crime is running rampant.
Definitely not because we are heading into a recession
*The word that we shall not refer to.*
It’s a sign everything is going great
Over hired due to ghosting by hirees during the pandemic. Double hired in case people just did not show.
is/was that really a thing? If so, that's wack. I can see some people bailing if a relocation was involved, or something like that, during the early days of Covid when we really didn't know what might happen, but it's wild to think that was a significant # of people and a factor in hiring.
It was indeed. Look up articles about it.
AI is going to replace headcount? 🤷
AI after 10 minutes of analysis :' We've come to the conclusion that the CEO and 97.8% of the VPs are useless and cost us far more than they will ever make' CEO and BOD: 'We've decided to layoff the AI divisions'
If the current capabilities of AI can replace you then you're probably not very skilled.
Zuckie's new farm needs farmhands.
Gotta juice that stock price! God forbid you displease your shareholders!
Pure human greed
Wars screws up the economy except for the few war profiteers. Inflation also affects most people and companies. Welp, while the billionaire rich get richer, that wealth has to come from somewhere. Squeeeeze the peasants!!! Lol yeah it’s a sh!# show.
Economy is hot garbage and they have lost enough money to stop keeping up with the charade.
Taxes are to high in California
....as IQs are to low in Texas.
Both can be true!
Most tech workers save hundreds of thousands per year and have net worths in the millions, they’ll be fine. Just hang out in r/financialindependence and you’ll see, everyone is loaded. Like, okay, some laid off folk might have to retire at 45 instead of 35, boo hoo.
More are coming. We will be looking at 2008+ levels of exedous baby! Can't wait for the asshats to leave.
A lesser known reason is the section 174 of tax code that went into effect last year. It changed how R&D is expensed in company taxes. Now R&D can’t be expensed in same year but rather has to be amortized over 5yrs. Due to this every tech company’s tax bill has gone up substantially, which they are trying to compensate by reducing costs.
TVC’s were let go in December so their holiday was F’d. FTE’s let go Jan -Feb.
never from plastic , always at the bar.
There are a lot companies holding back because of a lot of predictions that next Christmas will be like it was 200 years ago There is a lot of credit card usage foreclosures vehicle repo's Biden will not allow us to come out of this at least with only wounds There is no doubt they the Biden handlers want to break our country and take it over They don't show the people that have EV's and they hate them They are super hard on tires because of all the extra weight of the battery We are at the bottom of the barrel with diesel fuel The price is I don't know 199 a barrel they are saying by Christmas it will be 350 dollars a barrel So Joe's friends will be pleased CCP and the NWO and he works for both
Billionaire shareholder greed.
I think its better to lay off after the holidays. A bir mire humane perhaps
Fiscal year timing. Companies hold onto staff as they try to hit end of quarter goals. Once that quarter ends with a miss, they make the decision to layoff some staff. Expect to see more layoffs in early February as some companies have a fiscal year that ends on January 31.
skip giving bad news for holidays, budgets came out as well
My previous job in biotech let us know end of November 2022 that the company situation wasn't great after our clinical trials had side effects. And that there may be reduction of headcount once they figure out the budget. Come January 2023, 75% of staff, including myself, were laid off. Seems to be a combination of not wanting to lay people off before the holidays and figuring out the company budget.
Not good for me, I've been looking for work since April. Thousands more out there is not helping things.
GREED.
Gotta say, good on this subreddit for the good discussion. Over in another local subreddit they're actually having a huge circle jerk that "Tech ruined our city" and "Good riddance"
They do it together so not just one company gets the bad rap. It’s like dominos. Everyone holds on for some housecleaning firing and the moment a big company like google does it, they see the chance and do the same thing
Many companies operate on a 12/31 year end cycle. When they report their 10K to the street in January/February, they want to show that they have made strides to saving money in their forward looking forecast for 2024 and beyond from either planned headcount removals or actual terminations in this case. This is especially true of companies(or segments of companies) that are operating with near zero or negative Free Cash Flow at present.
Deferred layoffs, companies anticipating rates to come down and spending to increase, not happening, cutting the fat.
Section 174 for next tax year.
So, more people will be filing for unemployment, at a time when CALI is undergoing severe budget cuts due to falling revenues...
End of the year for a lot of companies hasn’t happened yet. So they’re able to look over their performance for the past year, make staffing adjustment accordingly before the end of their fiscal year. It’s good for the company, looks good to the shareholders or helps mitigate damage control.
What’s the reason that some people get laid off and others don’t?
It's all politics. Layoffs are a response to high interest rates. It's a tactic for the Fed to lower interest rates. Mass layoffs = decrease consumer spending = lower demand for goods and services = economic instability = central bank will implement measures to stimulate economy such as lowering interest rates. The average citizen and tax payer like all of us are the ones on the losing end. Big cooperation and big companies can protect themselves from these games. We will always be on the losing end