Just another day in the Blender

The Grey Lady sorta redeems herself with a great article on the current state of life in the Tech ecosystem.

Practically every day I read in the comments somewhere on the ‘Stacks about someone who has proudly canceled their subscription to the NY Times. And I can totally understand why, as their editorial slant seems to be to bend over with more flexibility than even Simone Biles can to try to both sides and to understand the motivation of the rural voters and their infatuation with the Tangerine Rhino.

I totally get that.

But, the paper does still do a LOT of great reporting. Case in point: the relentless waves of firings in the tech industry.

Look, I live in the tech world. Almost my entire career has been spent in a common role in tech, the “Product Manager”, and while there has always been an undercurrent of churn. Times get good, and tons of people get hired. Times get uncertain, and people get fired. One leading company cuts staff, and suddenly 20 others follow suit.

And Wall Street cheers. Stocks go up. Exec’s get a payout. So, Susie in accounting and Fred in sales gets to go to a foodbank to feed their families after they get pink-slipped.

Here is the article I am talking about: “Mass Tech Layoffs? Just Another Day in the Corporate Blender.”

(That is a gifted link, and it is worth the read, I promise)

As I mentioned above, I have been doing this for going on three decades, and there always has been a bit of me-too waves, where one company cuts staff, and others see the benefits and follow suit.

Most of the times, there were good reasons. The biggest event in my career was the Dot-Com-Bomb in the early ‘aughts. Companies like WebVan, Pets.com, and others that were ludicrous, never had a path to profitability and when the bubble burst, it was awful. It crashed the whole economy, and ended one of the biggest bull runs in the stock market (and frankly was part of the reason that the Clinton era was one of the strongest stretches in the US Economic growth).

That has changed though. When the layoffs begin to be unmoored from economic turmoil, but they start as “balancing” or “transformation”, and this is like early in the Covid era, where transmission is viral, and unrestrained, and you see cascading announcements, and then repeat rounds of layoffs happen, and waves of fear sweep through the rank and file.

From the article:

After shedding over 260,000 jobs last year, the greatest carnage since the dot-com meltdown more than two decades ago, the major tech companies show little sign of letting up in 2024 despite being mostly profitable, in some cases handsomely so. In their words, the tech companies are letting people go to further the continuing process of aligning their structure to their key priorities, or “transformation” or becoming “future ready.” Behind these generalities, however, some tech companies are using what has hitherto been an extreme measure in order to engineer a short-term bump in market sentiment.

This is 100% truth. Sure, some of the tech majors saw their business boom in the depths of the Covid response (cough Netflix, cough Peloton, et . al.) and over hired and over invested, assuming that .consumer sentiment was permanently shifting and needed to adjust. I will grant that.

But what we are seeing is going way beyond that, and it is now entrenched in the culture of Tech that there will be near constant churn.

Oh, and while Joe Sixpack might think the economy is in the shitter, that just ain’t fucking true. The economy is on fire (the good kind), inflation is not perfect, but it isn’t as bad as most people think (what they seem to care about is that prices haven‘t fallen back to what they feel is “good”, even though that would be very bad indeed — I wrote about this a week or so ago) and in general we are about as high in employment as we have ever been.

This mismatch between reality and perception gives air cover for managers and executives to do some financial engineering. Lay people off to free up capital. The markets go bonkers, repatriate some earnings from overseas and buy back stock, because fuck you, we need to juice the stock price so that the CEO can buy a bigger yacht to play his Yacht Rock music on while they sacrifice their “human capital” on the alter of Capitalism.

‘Murica, Fuck Yeah!

Back to the article:

Investors are indeed thrilled. Meta’s shares are up over 170 percent amid its downsizing talk. And where stock prices go, chief executives will generally follow, which means it is not likely to be long before the unnecessary layoff makes its appearance at another publicly traded company near you.

…

Moreover, because a majority of corporate executives — together with the consultants and bankers who advise them, the activist investors who spur them on and the financial analysts who evaluate their efforts — have been raised according to this change credo, the constant churn becomes a sort of flywheel. A leader instigates some change, because that’s what a leader does. The advisers and investors and analysts respond positively, because they’ve been taught that change is always good. There’s a quick uptick in reputation or stock price or both, the executives — paid, remember, mostly in stock — feel they have been appropriately rewarded for maximizing shareholder value, and then everyone moves on to the next change.

Yeah, business as usual.

And those who remain? It sure as fuck feels like being in a blender. Beyond the uncertainty and fear that these often quarterly reorgs entrench in corporate culture, it also negatively impacts productivity. People have a new job, and no ramp or training to get them up to speed. You are literally dumped into the changed, almost always expanded role, never is your compensation lifted to account for all the extra responsibilities piled on you, if you should dare to talk to your manager about it, and ask for what is fair, you know you will be on the next quarter’s cut list.

Yeah, this is fucked up. Look, I get it, a lot of the country views the tech workers as cocooned into cozy ecosystems where companies swaddle them in benefits like free laundry, three free meals a day, in offices with “comfort” rooms (no, not prostitutes — get your mind out of the gutter, but instead a place to nap) and more amenities than a high-end NYC apartment building for the ultra-rich.

The reality is that those perks were to keep their employees on campus, giving them no reason to leave. That is hardly a perk I would want. I do firmly want my work and home life to be segregated¹.

Still, we have a generation of managers and ‘zeks that have entrenched the churn and the resulting corporate blender at their organizations, and as long as the ‘Street rewards them for this with increasing stock prices, it will not change.

If you are not in tech, be thankful this insanity hasn’t spread, and pray that it doesn’t come to your neck of the woods. Because I can assure you that living in fear for the next wave of unnecessary layoffs is really fucking bad for your health.

Peace out!

1. I must add that I now work mostly at home, and it can be really hard to disconnect. I often will start well before 8 in the morning, and if I get a ping from my boss at 7 PM I respond. Very unhealthy, but I am at an age that if I get laid off, my career in tech is over

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