Yes, except there's two waves of layoffs. The wave that is announced, like you mention, and the wave of smaller layoffs that does not have to be announced. This is to say, more people are being laid off than officially reported. This is true for Facebook and Amazon alike.
I've got a burning question on my mind and I'd really appreciate some insights.
From what I can tell, the recent wave of startup layoffs seems largely driven by companies bracing for a potential economic downturn and using their own customer data to anticipate seriously bleak scenarios. But if that's the case, are we basically still in the early innings of this crisis? Logically, the domino effect would mean that step two involves companies closing up shop and going belly up, right?
I would agree. Interest rate hikes generally take a while to actually work through the economy. This current hiking cycle is the fastest we've raised rates, especially considering the interest payments required for our debt. I don't think it'll be a soft landing.
Startups aren’t a great signal - especially if you’re only looking at Silicon Valley startups. For one they employ way fewer people (while garnering a disproportionate amount of tech headlines).
For the bigger public companies their data is available through yearly SEC filings. Just look it up. They’re making record high revenues. Layoffs for them are an optimization not existential. They could’ve been fine laying off fewer people but it protects them from their growing competitors and longer term global trends.
Doomsaying will always be popular but is often misguided. You’re basically relying on a broken clock being right twice a day.
I don't think it's necessarily so bleak. Another interpretation is that big tech companies had a recruitment drive over the pandemic when revenue was high. Now that revenue growth has slowed, they're trimming the fat.
Also: hey, those pesky coders and other white collars got way too expensive, let’s lay them off in droves to make it the employer’s market and rehire some back, but on our terms and not theirs (cheaper, no perks, but they will be glad to land a job anyway).
Source: a little bird told me some companies do such rehiring, and for many H1B holders it is an offer they can’t refuse.
Had a friend laid off and saw his job posted not a month later (with the stereotypical #hiring LinkedIn corpojargon). Many employees make a big hubbub of the org being employee-centric, people driven, blah blah blah. I almost joined their org because of how my friend talked it up last year. Despicable.
> Many employees make a big hubbub of the org being employee-centric, people driven, blah blah blah.
It never is. If anything, tech corporations that have been hot startups two decades ago are shedding their larval teletubby skin and transform from sheltered colorful environments suited for men-children into... well, just your average run-of-the-mill ruthless capitalist businesses your boomer parents/grandparents know and loathe.
The thing is, if they mention they are people-driven casually, they likely know the notion — you can expect some respect for employee rights (provided you do your own homework, can haggle like a used car salesperson, and can tell decision makers from HR personnel); if they emphasise it so much it reminds you of a cult, or if they don't mention it at all, but are instead brimming with descriptions of the company's grandeur, run — if you have anywhere to run these days.
Agreed. We're in a recession. It's is one of the only things that does "trickle down." Haha.
We've all been experiencing recession since last year, when food and gas prices started to increase. While some regions are more impacted than others, the price of everything has increased.
For those who make over a certain amount (i.e., $100K/year) it's less noticeable than for those making under that. Because budgeting.
Bezos himself warned of this back in November 2022: https://www.msn.com/en-us/news/technology/why-jeff-bezos-is-.... When ultra-rich tell you it's going to be bad, probably best to plan for that. Also, where is the government in all this? Why are ultra-rich still not paying taxes? It's quite an alarming and vulnerable position for majority of people in the United States right now.
Startup layoffs are very much related to the funding environment. I work for a startup that laid off half our staff. There have been very few series C and later this year. So if you are a startup you need to decrease burn now and get to having good MRR. You can't aggressively grow at a loss and expect to get more funding for that with few exceptions. When VC money was much more plentiful people hired a lot without the pressure to become more sustainable. For further funding rounds they had to show that they were growing in some way. SVB collapse was huge in the startup world not just due to the people who had deposits there.
With larger companies like Meta, their multiples are also based on growth. So even though large tech shows no signs of being financially insolvent, they will have to still deliver growth in profit with flat to declining revenue. So the focus then is to decrease expenditures in lieu of revenue. There was a ton of hiring the last few year along with the tail wind of tons of money out there. Now it needs to rebalance.
Note that by the time "normal people" really felt the 2008-2009 recession, the stock market was already bottomed out and going back up. Just something I keep in mind.
+1 for asking the correct questions! Of course leaders of companies understand the current economic downturn and they to some degree can predict future economic problems better than the average citizen.
While hiking yesterday I was talking with a friend about history, and how all great empires turn to “looting” as their influence wanes. There is plenty of data for this point of view: USA, England, France, Middle Ages powers, Romans, etc.
Just as elites in a declining power will naturally “loot” as much as they can to ensure the long term economic well being of their family, doesn’t it make sense that corporate leaders will cut staff, and generally extract as much profit as they can short term?
I may have been in error on my opinion. I just did manual web search, and asked ChatGPT+Web and Bing+ChatGPT and could not find much to support my opinion. I will keep looking.
Anyway, thanks for challenging my opinion - I am likely changing my mind on this.
No worries. I am not a great student of history, but I have found a recent surprisingly strong wave of people appearing who are entirely cynical about the history of the West, and will believe any negative statement about it. Obviously some of the negative statements are true, but it's always worth a little prod to see :)
Corporate America doesn't seem to be collapsing. It's just a mild recession and we haven't had one recently.
Also it's hard to make the same kind of analogy with 'corporate leaders' as they are typically employees rather than owners. Employees already loot a much as possible!
At least in the case of the Roman empire, it was founded on looting. One of the main purposes of Julius Caesar's military adventures at the beginning of the empire was to capture people from neighboring nations and sell them into human trafficking. The US is arguably the same: human trafficking profits created the foundational wealth that everything else was built on (along with looting the lands held by the continent's original inhabitants).
Careful what you say, you're making yourself an enemy of fox news. The natives were savages and we should be grateful to our lord and savior Andrew Jackson for trying to kill them all, and also buy gold because central banks are bad bad bad!!!
If the Fed raises rates too high or keeps them high for too long, it will push the economy into a deep deep recession. As we're always using lagging indicators, economists are generally unsure where we are in the cycle, some folks believe it's been pushed to far for too long, and further pushing is going to cause either a deep recession or, even worse, stagflation.
I'd love to know what Volcker thinks about our current situation.
Don't know about the FED but the ECB has openly stated that they will keep raising rates as long as necessary to get inflation back to ~2%.
It doesn't seem to be working, for very obvious reasons: demand for energy and food (main cause of inflation) isn't that elastic. Further, there's no unemployment, so people spending and will spend only more because of inflation itself.
The one thing that could motivate people to stop spending, raising bank savings interest rates to something meaningful, is oddly not in the playbook.
That’s just an excuse the CEO’s are using to avoid blame. They over-hired during 2020 and 2021 “because everyone was doing it” and now they realize they have 10’s of thousands of employees with nothing to do and huge salaries so it makes no sense to keep them.
I can't speak for Meta specifically, but mass layoffs don't generally correlate with worker productivity. At the end of the day it is all about CEOs making shareholders happy so they get rewarded with juicy bonuses. Shareholders see their stonks going down so they want cost cutting. People making decisions are not always aligned with the long-term interests of the companies they manage.
Further Yes and: Cutting costs, versus investing, means the PHBs have decided the ride is over.
In other words, the combo of layoffs and corporate buybacks is about profit taking (while they can).
Every business, market, etc, has a lifecycle.
Social media, and Meta in particular, has definitely entered the Computer Associates phase of its lifecycle. So now it's time to cut to the bone, extract as much blood as possible.
Such is life. It was a fun grift while it lasted.
Hopefully, adjacent malignancies such as digital advertising and freemium will plateau as well. That'll be a relief. They can join informercials, shopping networks, and supplements in the backwaters of human culture.
If it were as simple as “layoffs/cost cutting make stock go up” then CEO’s would have never had hiring surge during Covid. The CEO’s job is always to maximize long term profits. Layoffs make stock go up only when it’s clear profits won’t change much with the layoffs. And if layoffs won’t decrease profits, why were these employees there in the first place?
During market growth stages, laying off would be something that would be a red flag.
You only focused on a small part of the person’s comment. The comment also said when stock is going down, lay offs help. They likely aren’t talking in absolutes anyway
Were there hiring surges for companies whose valuations were not going up?
The Economist says that the layed-off workers were bloat:
"So far techies themselves have been mostly spared, observes Tim Herbert of the Computing Technology Industry Association, a trade body. Instead, the axe has fallen mainly on business functions such as sales and recruitment. These had grown steadily as a share of technology-industry employment in recent years, a telltale sign of bloat."
https://www.economist.com/business/2023/03/27/where-have-all...
The reality is that noone knows whether there's going to be normal growth, stagnation, or a recession, but one thing is for sure: The tech boom of the pandemic has ended along with the pandemic.
So these companies don't have proprietary magic insights and can reliably forecast a recession (as was your question), they're simply responding to the end of the boom and rising interest rates.
A related point would be Meta is exposed to revenue risk as customers pull back from advertising in a recessionary environment. This appears clearly in Meta’s financials.
An unrelated point would be that layoffs usually target the lowest-performing segment of the workforce and offer legal protection to the company against unlawful termination. Of course not all laid off workers are poor performers but there is obviously a correlation here.
> But if that's the case, are we basically still in the early innings of this crisis?
We might be, but more likely is that Meta is facing a reality that all huge companies eventually face: there isn't a play for megagrowth anymore once you are the size of big tech companies. You'll grow a little faster or slower than CAGR. So, since you can't grow the top line, you start looking at the bottom line and becoming more capital efficient. Laying off overpaid people is the start of the process.
Wall St. is just a game of smoke and mirrors and all it takes is one crisis to expose this. They're not anticipating a crisis, they're not prepared for one. The system isn't built for long term stability, it's built to maximize short term gains. Wall St. has long since figured out there are no consequences to causing economic instability for short term gains because the government will just bail them out with our tax money anyways and they still get to keep their ill gotten gains. The consequences of their actions do not affect them and that is the problem.
>the recent wave of startup layoffs seems largely driven by companies bracing for a potential economic downturn and using their own customer data to anticipate seriously bleak scenarios
It's not just startups though. It's big tech. It's financial services. It's big and small non-tech non-financial companies as well. Everyone has been predicting a recession for well over a year now. We're living in a very unusual economic situation where some parts of the economy are getting crushed and others are doing fine. No one knows the answer to your question, but yes, one possible answer is that this is just the early phase of the downturn and it's just taking longer than usual to move to the next phase.
I just found out the gym I go to is closing. The email said it was a lease dispute but there is no way it is just that. I suspect they remodeled and bought new equipment on variable rate credit and are getting absolutely squeezed with interest rates going up plus inflation plus lower demand post covid.
Pretty sure we are in a slow moving car crash with the knock on effects of rates having gone from 0 to 5% just starting to slowly take effect in the broader economy.
The twisted thing is that this is the plan, it's intentional.
The rapid rise of interest rates is to curve demand, which tames inflation. It's a really nice word for what is effectively targeted economic destruction. Job losses and bankruptcies are the casualties.
And that's not all of it. In my country, aggressive plans to build lots of new homes are imploding. Buyers suddenly face an interest rate 5 times what it was before and opt-out. Builders stop building because nobody is buying.
> Logically, the domino effect would mean that step two involves companies closing up shop and going belly up, right?
Right, but there's a time lag effect between when capital dries up and companies go belly up.
Many cash-guzzling companies had 12 months of runway. After layoffs and pivots to profitability, 12 months may get extended to 18-24 months, but ultimately, the traunch of businesses without real business fundamentals will shut down after cash runs out.
So, my guess is a significant wave of startup bankruptcies will begin Q3 of this year, and peak several quarters later (assuming markets stabilize around current levels).
If your only measurable metric is how much the company grows, you hire for the economy you're in, not the one you're headed into. The grew massively in the pre and mid Covid boom, and shrunk massively since then. Only if you care about profitability and employee welfare do you put the brakes on hiring. The company in question is all about market cap. They've got enough money to bankrupt nations; the only metric the board care about is power.
The capital class thinks that the serfs are getting too "uppity" with all this "pay me a living wage to help deal with insane inflation" and WFH. All the layoffs send signals so the working class has an existential dread.
Also, there are very few exceptional leaders and there's some degree of copycatting here.
Or there are business lines that have no hope of ever being sustainable, and as a private business that has to earn a profit to survive, it makes sense to stop throwing money away.
It probably doesn't help that the bar for sustainability was raised from 'generates any profit, ever' to 'generates a few % profit per USD invested each year, eventually'.
Speaking of business lines that have no hope of ever being profitable, I'm still waiting them to cancel the metaverse project, but it still looks like Zuck's ego >>> the appearance of future profitability >>> the people who actually make facebook's core competences function.
The more people they lay off while keeping that dumpster fire going the more alarm bells go off in my head around the long term viability of their stock. It definitely doesn't belong in a pension.
Its fashionable among herd mentality investors now to do noisy lay-offs, but the smart money is probably quietly hiring these days.
The metaverse efforts at Meta isn’t just one project. It’s a massive org with multiple VPs driving many many different product lines. It’s not going anywhere.
They're laying off many, many people in several waves and if you are correct the fact that they've hired a lot of people is still an obstacle, or justification to do something that does not make sense. That's funny. And sounds like them.
It's not a higher monetary cost to have WFH employees. Businesses can shut down and get rid of office leases which save significant money. They can hire people in lower cost of living areas which don't demand as high of salaries vs. hot areas too. WFH is nothing but a cost savings for companies.
As evidenced here by the vast increases in productivity provided by WFH, it is only natural companies need fewer workers.
I'm perplexed by postings like this, HN should be rejoicing in these right-sizings and the maximization of opportunities for those no longer bound to such inefficiencies.
For workers, WFH gives immense flexibility and opportunity. You are no longer tethered to work in the same vicinity where you live. This gives you both personal (e.g. be close to family, be close to a beach, etc.) and professional (e.g. work for company in another city, on the other side of the country, etc.) opportunity.
Right, so it is a tradeoff that a worker can choose to make: work for a company that doesn't have WFH/remote work or one that does. Each has their benefits and drawbacks.
I see your argument that it can result in LONG TERM gains from which everyone will benefit but there are short term losers and the people on this sub are more than likely the short term losers from these layoffs.
Seems like a sunk cost fallacy to keep these buildings at this point. For those buildings their heating/cooling/upkeep costs have to be huge. Honestly we should probably have government intervention at this point. Government buys the houses at market values and turns them into affordable housing to counter the housing crisis.
That also doesn't work. It costs more to convert an office building to housing than it does to tear it down and build new condos in its place, which in turn costs more than just building new condos in a different location. All the plumbing/HVAC/electrical systems need to be redone, you need ventilation isolation, there are different load capacities, etc.
Plus if remote work really takes off, there's no need to crowd all those people into the downtown cores of a few cities anyway. It'd shift housing demand to cheaper, more naturally desirable locations.
What'll happen is that a few firms with ineffective cost structures will go bankrupt, a few major cities will become hollowed-out wastelands the way NYC was in the 1970s or Boston was in the 1950s, and economic growth will pick up in other areas, with new startups and new desirable hubs.
> It costs more to convert an office building to housing than it does to tear it down and build new condos in its place, which in turn costs more than just building new condos in a different location.
Except in SF or NYC, there aren't that many desirable "different locations" left. Which is why freeing up the poorly used space in city centers can be a net positive for society rather than keeping to maintain these white elephants.
Yes, but the existence of a fallacy doesn't mean it applies here. If people can be convinced to go back to the office the company won't lose millions of dollars. Is that a sunk cost then?
> WFH is nothing but a cost savings for companies.
WFH is a loss of control. For some leaders, being a "boss" is more important than what's good for the business.
WFH also requires the right culture. I've seen it abused when I worked at Intel, and when Yahoo cracked down on it, the abuses were similar.
I should point out that I've predominately WFH for almost a decade; but it works because I'm trustworthy and I work for people who are managers instead of "bosses." In an environment where the workers aren't trustworthy, or the management structure is more about being a "boss," it won't work.
These companies have boards, and these boards are incredibly "inbred" so that the vested interests coincide and reinforce. You'd be surprised how many of your C-suite sit on boards of REITs or have invested huge amounts of company "cash" into them.
I 100% agree w/ this and have been making that argument in the anti return to work subreddits. People on the board may also be heavily invested in the auto or gas industry who also strongly wish to see a return to the office.
> People on the board may also be heavily invested in the auto or gas industry who also strongly wish to see a return to the office.
Musk has be expressing concern even though it reduces emissions, nominally his primary goal, far more than electric commuting, and he himself heads so many companies that he mostly works remotely at all of them.
He says some contrived argument like that because people who deliver food and work in factories can't work at home, it isn't fair for office workers to so they should suffer as penance to balance out the karma scales. It's like saying if you eat Alaskan crab legs, your little league baseball coach job should be done on a boat in the Bering sea.
I remember finding out about this early in my career. The office building that my company used was own by the company director but under a different company.
He tied the company into a 3 year lease and then sold our company to a multi-national company. Not the company that owned the office just the company using it nice extra little earner for him considering he also set the rent amount as well.
Unless you can prove it with specifics for each company, this is patently false and a sweeping generalization.
Companies like Meta were all gung ho about remote work in 2021, when they hadn't seen the long term impact of it. The push inside Meta for WFH not being as effective for new employees started coming up in 2023 after the performance evaluations were done and they noticed a trend. You might argue that the data analysis might have been incorrect, but that's another question. The same company is also heavily cutting on office space.
I know people in tech are pro remote but let us not come up with these wild unsubstantiated theories to support what we like.
Remote work might not be as effective for every company on the same level, maybe it is the culture, maybe it is role dependent, but it is simplistically not just about some shadowy real estate moguls.
The best time to unionize is when you're in a strong bargaining position to set a sustainable baseline in your first contract and build the infrastructure to make a strike credible. Unions are strongest when they have a huge fund to support their members through a strike.
Tech workers have been warned about this all through the latest tech boom. It might be too late. Any union formed now will be broke and desperate at any negotiation. It's like trying to buy flood insurance while you're on the roof waiting for rescue.
I think tech workers are currently in a weaker position but still a fairly strong position to unionize. There are plenty of people still employed enough to be able to support those laid off, and tech workers as a whole earn enough that many should hav a significant savings for emergencies like strikes. I think we should be organizing to have similar protections like a guild, where we guarantee minimum quality of treatment for us workers but no maximum on perks and wages, not even pegged to tenure.
Strikes are probably the least effective tactic for a tech union. Software isn't a coal mine or a railway. Plenty of products have glided along for a while with very few people maintaining them. Sometimes even zero.
I imagine if we do see tech collective action it'll probably be done quietly in the form of silently exploding technical debt, with documentation that misleads more than it informs and products that collapse under the weight of their own unmaintainability.
Most companies don't have twitter levels of overengineering.
Work to rule would kill any tech company. Imagine your biggest contract having to wait 2 weeks before you can fix the bug that is crashing their business.
Imagine zero tech support because unpaid after hours tech support is horse shit.
This has me wondering, how might a union be formed so as to avoid common misbehaviors of unions? I’m aware of many examples of unions behaving pathologically, but well-run unions hardly make headlines. Are there any noteworthy examples of the latter?
Off the top of my head, paths to explore would include:
- no full-time/paid positions as union officials
- term limits on union officials
- limited budget
Perhaps I’m naive, but the last item seems especially appealing. I don’t quite see why unions need big budgets, as it seems to me their activities should more or less revolve around the kind of collective discussions that can take place on Zoom or a forum. As such, expenses would be more or less limited to operational expenses for these tools.
I’d actually consider joining a union that was sufficiently restricted in scope, and narrow in its focus.
The trickier question is how to avoid the failure mode of unions defending known-bad employees. Having worked a few union jobs in the past, there were more than a handful of colleagues I sincerely wished would get fired, but for whom the union afforded undue protection.
> The best time to unionize is when you're in a strong bargaining position to set a sustainable baseline in your first contract and build the infrastructure to make a strike credible. Unions are strongest when they have a huge fund to support their members through a strike.
I might be wrong, but I don't think the average employee salary would be nearly as high as they are, given unionisation costs quite a lot of money, that drives up the cost per-employee massively. You might say now is the best moment ever to do this, but I don't see why that would be true.
In what made up reality is that even remotely true?
Everyone I know in a union pays a couple hundred bucks tops. Is it really not worth an xbox to help your fellow worker be happy, healthy, and sustainable?
This was thought to be the solution in the 90's en early 00's, offshore everything (basically wfh but wf-lower-income-country). Turns out it works sometimes but is hardly a panacea.
If a foreign worker could do what most of us do, they would already have your job, because they are infinitely cheaper.
30 years after first trying to replace all of us, they have still been unable to do so because it just doesn't work that well, even with a hybrid WHF company.
The union would kick out members who are strike breaking. It isn't possible to break the strike if you're not part of it. It wouldn't be effective to hold a strike in the first place if it was only a small minority of employees.
I had an idea regarding this. What if a new CC license was developed for open source projects where that code could only be used by union-participant companies/individuals?
That would be interesting, but it would probably only pressure small to midsize businesses without resources to just develop everything in-house anyway, and even then, only if it starts to comprise the majority of open source software
They would develop a tool based on ChatGPT/Copilot to automatically transform FOSS software into an obfuscated form such that they could invoke plausible deniability in court cases.
While I don’t agree with your hot take, it would be amazing if all the C-suite hand wringing about RTO being the best thing ever resulted in strong unions as a result.
Techies (at least at meta) are owners in the sense that a large % of their comp is in the form of equity, so it is in their interest for the company to maximize stock price.
Your class is not based on the number in your bank account, but on how you make that money. If you are dependent on an Owner to pay you for your time and labor, you are a worker, regardless of what token "riches" you are paid to believe otherwise.
You don't go from worker to owner until you buy three properties to rent out or start your own business.
The quote contrasted “millionaire” with “proletariat” and was clearly a reference to status at least well into the petit bourgeoisie if not the haut bourgeoisie.
A mere millionaire is a lot less rich today b/c inflation (though probably still at least petit bourgeois.)
The petit bourgeois as classically defined are dependent on applying their labor to their own capital (though other patterns of mixed capital/labor dependence fit the class, and are perhaps more common now), unlike the haut borgeois who rent labor to apply to their capital and the proletariat who must rent out labor to owners of capital, so not being able to stop working without a significant lifestyle compromise isn’t inconsistent with being petit bourgeois.
yup, agreed. I'm just highlighting the absurdity of how millionaire status today can sound like safe living or big winners of early employee startup lottery yet still end up as precarious as the rest of us in terms of relying on work day to day.
understood the theory isn't all about that. I reflect on work because I think so much of liberation can begin with freeing peoples time/regaining 'real' control of their time
Why would a union boss be more supportive of WFH and paying for value worked instead of hours worked? I see the incentives plausibly running in the other direction.
Not to mention the fact that unions often support politicians I would never vote for, let alone donate to or organize for.
You are absolutely correct in that way of thinking. What astounds me the number of people on HN who are saying that we are lazy and anti-capitalist with that way of thinking. The system is broken. The rich are getting richer and the average workers are getting screwed big time. Privatized profits, but socialized losses.
As George Carlin said: "They are getting fcked by a system that threw them overboard 30 fcking years ago."
The pro-capitalist proposals to exist, like YIMBY movements, pushback against regulatory capture, pushback against market breaking practices like locked down devices, and so on.
Can we stop saying this? Many taxes are paid before profits exist. Taxes are the sure thing; profits might happen, or you might go bust and investors lose all the money. That's not socialised losses. That's privatised risk, losses, then socialised taxes, then whatever's left is "privatised profits" - i.e. people actually getting a return on a risky investment.
While you're arguing class warfare, I think it is worth asking whether the "serfs" (dictionary: "an agricultural laborer bound under the feudal system to work on their lord's estate") at Meta are working on things that improve society... Isn't the typical developer at Meta making hundreds of thousands of dollars a year making systems that are destructive to the social fabric and cohesion of society?
On the other hand, the open source work done by meta has been instrumental in advancing many technologies and techniques. Machine learning via PyTorch being a prime example.
They have definitely contributed a lot to advancing machine learning. I believe the above comment means we don't know whether advancing AI will have sour consequences for society down the line
I mean maybe, but it’s already having positive effects today. It’s advanced the state of the art for cancer diagnostics and is advancing novel treatments, for example.
So far, the arguments against that I’ve seen have been hypotheticals and boogeymen.
> Isn't the typical developer at Meta making hundreds of thousands of dollars a year making systems that are destructive to the social fabric and cohesion of society?
Tons of farmers supplied the compost that Haber-Bosch used to perfect their way of making amonia, later used to make hydrogen cyanide (a pesticide later used in late 30s germany for non farming purposes)
You can be a serf and be a necesary cog in a machine for destructive purposes.
The hundreds of thousands of dollars a year still keeps those devs much closer to a homeless person than to any single Billionaire. A rich serf, is still a serf.
Sure, I could make a long explanation about middle engalnd feudal titles and how despite our modern conception of most poor people as serfs, a middle class of Franklin existed, that comprised the kind of freemason associations that now still exist in the City of London as Guilds, although most are currently NGOs and charities some still work on their original mission.
Or I could use serf as "non ruling class" following the comment I replied to, because that is how OP used it. Although technically he probably meant peasant as that was the class which no land whether serf or just labourers, I understood what he meant and replied tongue in cheekly about how some farming chemist aided the nazis, I say tongue in cheek because I made the farming connection to serfs
Hopefully the analogy works for you now that is being laid out.
Worth pointing out there are a lot of predatory practices around contract workers holding visas. I don't work at Meta so I have no idea if that's happening there but I have seen it at others places.
I guess I could have been more clear that I wasn't talking specifically about Meta.
But, looking at this another way, when you make an example of a highly compensated, in demand worker (like a senior SW engineer), what message does that send to everyone else without the same qualifications?
The "capital class" in US is mostly people who invest in their 401k and just get pensions from pension funds, whereas the "serfs" in context of meta are engineers who earn what, $400k per year?
You don’t understand the the vast difference, not just in wealth, but power, in the United States, and silicon valley in particular. This is a place where 400k/year won’t buy you a nice house.
Chris Rock explained the difference well when he said, “Shaq is rich, but the white man that signs his check is wealthy.”
300K puts someone at 97 percentile (top 3%). Nice, but nowhere near top 0.01%
It doesn't have the resolution to go into fractions of percent. Found this older (2018) article which says that 0.01% top income would be an income of $35 million a year. But that's 2018, so should be quite a bit more today.
So, it's safe to say that there are a hanful few people at Meta in the top 0.01%, but not many.
I have been searching for some time now without success, even ChatGPT tells me there is no such number, because many countries don't have the statistics, different taxation systems exist etc.
Some numbers I have found are around the 0.1% percentile for $300k yearly income compared to the world.
With both members of the household working at Meta/in the valley and and household income of 600k/y we get below 0.1%, because in many countries even households with high income do not have double-earners with that kind of income.
Instead of a grand conspiracy and malicious intent I believe the layoffs are more likely a result of bad decision making, over-hiring and waking up to the reality that perhaps they don’t need a staff of 100k to run a website and a few mobile apps (a vast understatement of course but still).
The best part is both the malicious intent and the utter stupidity and fecklessness options mean we probably shouldn't be paying these chucklefucks millions a year to cargo cult manage. The ownership class hasn't had to show performance for their payment in decades.
Who in their right mind would consider business analysts at a social media company in silicone valley "uppity"? Has anyone started a kick starter to help collectivize their loss of earnings through to january?
I just can’t get over this kind of language coming from people who earn 300k/y.
The idea that facebook developers are “the working class” engaged in a class struggle to overcome oppression is just.. wow way out there! The struggle exists but it’s not at Meta engineering.
EDIT: I’m not saying layoffs aren’t mean/stupid/preventable. I’m only saying that it’s not oppression or class struggle. I can’t understand that people can write this stuff on HN while living in a country where it’s legal to pay restaurant staff below minimum wage cause hey tips amirite. There’s plenty class struggle in America, let alone the world, but not a whole lot of it at Meta.
even if the CEO makes 10,000x more? if you annualize zucks net worth that's where he's sitting, and that ratio actually is pretty comparable to what it was during the lord/serf days.
Wait, if the CEO is rich, 300k/y isn't a living wage? I fail to see the connection.
Context: I live in $NOT_BAY_AREA and the amount of money you folks make while complaining as if you’re an Amazon warehouse worker really rubs me the wrong way. It seems to me that Bay Area tech people (or at least the ones in this thread) lost all sense of reality.
I get that getting fired is stressful but if your skillset is in such high demand as tech skills are in SFBA, it’s not class struggle.
I don’t disagree that layoffs like these are stupid, preventable and maybe even mean, I merely disagree that it’s oppression. It hurts the people who do get oppressed and not paid a living wage.
Just because someone isn't literally starving doesn't mean they aren't being oppressed by the ruling class. How much money do Google and Facebook bring in per employee, and how much of that only goes to the top level people?
All people who sell their labor are in the worker class, period. Pretending that being paid a token amount to feel special and make them see fellow workers as not in the same boat is unhelpful.
Maybe try broadening your perception? The idea that more people are aware of inequality and feel it’s sting doesn’t seem like a clear through line to “hurting people who do get oppressed” if anything my anecdata has found that because of increased feeling of inequality more people
I know are supporting strikes of people across pay lines. Maybe the issue here is your judgement not other people’s feelings?
Their neighbors whose median per-capita income is 5 figures seem more relevant of an analogy
The serf analogy makes sense for low-income Americans who essentially have to pay more to the capital class: payday loans, cannot afford bulk discounts due to low cash reserves, rent vs buy, crippling debt, etc
FB white collar workers are literally the capital class, eg, paid in RSUs and LI profiles advertising as angel investors
The only reason I am writing this is it's super disheartening to start the day with seeing engineers not understanding how historically lucky they are, and much more importantly, how rotten the situation is for their neighbors. "Tell me you and your family have never struggled without.."
As a historical note, most Americans are taught enough empathy to not joke about slavery. But guess what: serfdom was happening around the same time, has a lot of violent similarities, and also has descendants who are not thrilled by it. But don't let this distract from my primary point about misunderstanding that technologists are the gentry here, not the serfs, in this terrible analogy.
Eh even those Americans are doing pretty well in the grand scheme. We know that we are importing a bunch of illegal immigrants and using them as manual labor in our disgusting factories and brutal fields. We are not paying them the minimum wage nor giving them any kind of retirement benefits or even the basic human decency of being able to visit their loved ones in the hospital without severe risk. And yet we allow this situation to persist with minimal hand waving dedicated to the issue. If we are going to assign serfdom to anyone surely it would be this invisible class of Americans. Then again, they are here by choice, risking much in the process, because ultimately its a better option for them then they had elsewhere so does it really make sense to even compare these people to the brutality of histories serfdom? Doesn't seem so.
Yes it does. Especially when the class of people you are referring to are fleeing their countries as a result of imperialsm, state led terrorism and ridiculous policies the US itself has instituted throughout the americas. The US is responsible, in many cases, for destabilizing these countries, creating the war on drugs and using adversarial and predatory economics to destabilize these countries for the private ends of capital. Just because you can “choose” to flee does not preclude you from being a victim. Your reading of being a the equivalent of a forced laborer essentially disregards the entirety of history surrounding war, conflict, instability and being a refugee in that context. If the question is about being “forced into working” you’ve already over looked the entire forced labor market that exists at the border and fits your definition of “brutality” quite well.
Your comparison of modern day tech workers to gentry is, in my opinion, surface-level at best. The landed gentry controlled far more of the political processes than your average tech worker does which allowed them to capture leverage, capital and influence at a level we could only dream of. A much more apt comparison would be to todays billionaires who actually control the levers of legislative power and use those levers to make themselves practically untouchable. Just because you feel that people are being spoiled relative to their counterparts doesn’t actually give them real power like the landed gentry had. Just because someone has 200k in a bank account does not immunize them from losing their job, getting sick and losing all of that in medical bills. I’m sorry you’re sad that people feel oppressed but it doesn’t change the fact that people are entitled to feel burned by the wheels of unfettered capitalism. Yesterday it was the car factory workers that were told they were spoiled for advocating for themselves and now we rally behind those causes today so your line in the sand drawing around who is entitled to complain about inequality wreaks of a lack of historical context for how these struggles play out longitudinally.
I’d rather be landed gentry since I think not having to work for a living would be pretty sweet. I’d also have to be cold heartless classist which I don’t think I could do. I’d probably die from dysentery though but I’m considering that outside of the question of “which occupation would you rather”
Well your question was vague and not actually what you are referring to: it was a simple “would you rather.” I think the comparison is useless given that comparing the entirety of the life experience of people in two different eras does not actually contribute to a conversation around the core point being made here: having ridiculous levels of wealth is not the same as having a decent paying job in which you are still reliant on the income to survive and therefore are essentially tied to that opportunity of labor. A more valid comparison would be, as I pointed out earlier, between billionaires and any class of people who “have to work for a living”
If you need a paycheck to live then you’re working class. People making 300k/yr have an easier time converting to the capitalist class but they aren’t there by default.
No one making $300,000 a year "needs" a paycheck to "live." This language is so hyperbolic that it limits one's ability to persuade even those audiences that might be sympathetic.
Unless you're claiming that everyone making $300,000 a year could retire immediately, then of course they need a paycheck to live. Maybe you're thinking about the phrase "living paycheck-to-paycheck" which has a different connotation.
Contrast this with a person with many millions or billions in wealth. That person literally does not ever need another paycheck to live. In other words, they do not need to work to live, unlike a typical worker making wages.
> No one making $300,000 a year "needs" a paycheck to "live."
What does that mean?
The 300K is the paycheck (annualized). It's what they use to pay expenses to live. If the paycheck goes away you no longer can pay those expenses.
i.e. of course they need the paycheck to live.
Are you suggesting someone who made 300K once can now retire instantly and never again need a paycheck? It doesn't feel like the above quote is fully thought through.
Now, sure, if they've been making 300K for a couple decades, hopefully they've stashed away enough to eventually retire. But that's a very different statement.
This attitude hurts poorer working class people because it causes high-payed workers to identify themselves with the capitalist class rather than workers.
Are you sure about that? I think recognizing that you’re in the top 1% (and probably top 0.01% globally) is a much healthier way to help underpaid people. It lets you eg advocate for higher minimum wages, social safety nets, higher taxes (that you’re happy to pay, cause hey, lots of money), etc. Earning that much money while pretending to be oppressed seems borderline offensive to me.
This is the narrative that the elite use to divide the working classes. "The people making $300K/yr are not like you!" says the person making $30M/yr to the person making $30K/yr.
The senior software engineer at Meta has far more in common with a blue collar guy living paycheck to paycheck than he has with a CEO whose wealth grows faster than his or her ability to spend it.
I've said this before but the way I see it, almost all of us are N missed paychecks away from bankruptcy. For a lot of people, that N is 1, for some, it's 2 or 3, or even higher if you managed to save wisely. But we all have some number N. And the fact that we have that number should unite us against the few people on the far side of the derivative curve whose N is infinite. Tech workers had their relatively brief moment in the sun where their N was maybe 10-20, it got to our heads a little, and we started thinking we were "very different than a blue-collar worker".
Nobody is getting divided. It’s perfectly possible to be actively in favour of higher minimal wages, social safety nets, universal health care, employment protection rules etc while acknowledging that as a senior software engineer at Meta, you have it very good and are not suffering under any oppression.
The nice explanation is that if you’re doing well, you may be happy to pay lots of taxes so others can do well too.
The selfish explanation is that you want to live in a community with low crime and high trust, which requires a certain baseline living standard for everybody.
Only with the, in my experience uniquely American, idea that people can’t possibly be in against a policy or situation if they’re not immediately short-term personally hurt by it do you need this doublethink that tech staff at Meta are being oppressed.
Just because someone suffers more than someone else does not mean that person suffering less is still not suffering. 300k yr in Silicon Valley with a family and with only one income is peanuts if you want to afford say, childcare that is good and reputable. In relative terms we are all the equivalents of servants to capital and can therefor be considered oppressed. Also your comment wreaks of solipsism: just because you think someone making 300k is in a good placed doesn’t mean they aren’t oppressed in some way by their employer: look at caste issue in the US.
> The senior software engineer at Meta has far more in common with a blue collar guy living paycheck to paycheck than he has with a CEO whose wealth grows faster than his or her ability to spend it.
No. The senior software engineer at Meta and the CEO can both afford a comfortable lifestyle. Yes the CEO can afford a more comfortable lifestyle, but they're still limited by things like health. The blue collar worker earning $30k a year is in a different position entirely.
I know both people who are very rich and people who are poor. The very rich and the senior-engineer types both live comfortable lives. Yes the very rich can have more luxuries if they so desire, but who cares? Not even they do...
The poor live a different life: Freezing winters without heating, 8°C inside their home. No access to warm water. Calculating cost vs calories for food they buy so they get the calories while spending as little as possible.
Or perhaps, Meta is so poorly managed that they had employees paid $200k/year to do little-to-no work [0], and they are only just realizing that this is unsustainable, again due to incredible ineptitude.
The capital class isn't a single conspiring entity.
When you get fired from Facebook and then try to save money by canceling Netflix, then Netflix isn't going to be very happy about that, whilst they very much are capitalist. Most companies depend on customers having disposable income.
Stock price is forward looking. Meta does not pay dividends, so maybe it was the belief that the new initiatives won't work out and the old money sources will wither away.
The layoffs are part of Meta's so-called "year of efficiency," which CEO Mark Zuckerberg pitched as necessary for the company to slim down and become more nimble amid a challenging economy and weakened digital advertising market.
When is our industry going to finally come to the realization the people running these companies don't actually seem to know what they're doing? Meta isn't hemorrhaging money because of a 'challenging economy' and 'weakened digital advertising market', Zuckerberg personally drove Meta into the ground with his misguided Metaverse pipe dream nobody really wanted to begin with.
When is our industry going to finally come to the realization the people running these companies don't actually seem to know what they're doing?
Ugh...I hate sounding like a Meta/Zuck apologist but Meta is worth hundreds of billions of $$ and makes billions of $$ in profit every year...surely they know something about what they're doing..
That box of cereal you buy at the grocery store for $5 does not cost $5 to manufacture, not even close. A shitload of money goes into advertising, and Google and Facebook own that entire industry nowadays, or near enough. They are basically collecting a tax on all commerce.
No, sure, I know, although I think the logistics and the store's staff and premises are the big contributors to the non-manufacturing costs. It just seems insane that Facebook is able to do that. But I guess that's my fault for never being on Facebook. I don't know what the ad situation is these days.
I'm just going to collectively answer this current thread in this comment. You all may want to Google that. And maybe avoid investing altogether. Just some friendly advice because how does everyone not know this? It's been plastered across the news for months including here on HN.
I mean they definitely know what they’re doing when it comes to advertising but what’s with the Metaverse? I mean what problem are they trying to solve there?
I remember seeing some street interviews of fresh hired devs who were a cohort of 'just grind leetcode for 2 months and get a $200k+ job'. Were these people valuable contributors to building product?
As a hiring manager, I know these roles are mostly non-technical, but right now hiring junior devs fresh out of college is easier than it has been in ~8 years.
It seems like the kids with no skills being offered ~200k to sit around and learn are no longer being offered positions. This year we have postgrads applying for internship positions (paid), and our incredible intern from 2 years ago who went to Apple is taking a job with us soon.
I can see that. At my medium-sized company the management is taking the position of mostly hiring senior people right now, because we don't have many openings and they feel like they can be picky. I know my company isn't the only one with this mindset. That leaves a lot of arbitrage for people willing to bet on junior staff.
While I do think it is tempting and broadly correct to have the discussion about these layoff rounds being partially social contagion among the C-suite class, needless RTO, and the end of 0% interest rates, we should also keep in mind that Facebook/Meta appears to be egregiously mismanaged.
They burned billions of dollars and years of dev time on a product that was a bad joke at both the implementation and vision level, all while their mainstay products that actually make money are decaying in real time. Facebook is a product fully relegated to regurgitating content from meme pages to 40+ year olds + getting into extremely uninformed political arguments. It is a zombie product with no hope of revival. Instagram is better but is still showing shakiness in its business model and audience retention. And they can't monetize Whatsapp without ruining it. So they had to make a leap, but they chose an area (VR video games) that they had no pre-existing experience in and got nowhere in the 9 years since they bought Oculus. Oculus was the cutting edge in VR, so one must imagine that they also squandered that talent given the state Horizon Worlds is in.
Once again, I imagine the vast fortunes spent on finding, interviewing, more interviewing, MORE interviewing, onboarding and then firing all of these employees.
Shouldn't dozens of high-ranking heads be rolling for such profound mismanagement and gargantuan waste of company resources?
>In April, Meta reported first-quarter revenue rose 3% from $27.91 billion a year earlier, after three straight periods in which it declined.
>Despite the cost cuts, Meta is still investing heavily into the nascent metaverse, and its Reality Labs unit, which is developing virtual reality and augmented reality technologies, logged a $3.99 billion operating loss while generating $339 million in sales in the first quarter.
>Investors have praised Meta’s major cost-cutting, sending the social networking giant’s shares rising 180% to $246.74 since bottoming at under $89 in November.
the company has money, management keeps investing in a dead end product & making workers pay the price for its lack of success, and the soulless ghouls who parts of the company make money off people losing their jobs
Completely obliviating the "human" part of what an employee is, reducing it down to a mere number on a balance sheet, will never sit right with me. In the end, what those companies are ultimately taking a risk on is people's livelihoods.
I wonder if Meta will have a hard time finding quality talent after all these lay offs. Why should we trust Meta going forward? Same with Google
and Amazon. They’re just not companies I trust to look after me as an employee and treat me like a human rather than a number on a balance sheet
I see no tragedy here, everybody who actually cares sees the mission of this company clearly, and they are pretty open about it, so accepting that juicy paycheck comes with some baggage. Just another societal leech making the world worse one step at a time.
Same as some high tech banking positions, you accept morally dubious work and get compensated adequately. I dont see people here complaining when ie Goldman Sachs fires 10% of the workforce either, rather some childish schadenfreude is not uncommon.
Look at it this way - maybe those brilliant people will grok the life lesson and tune down their greed a bit and try to make the world a bit better place instead. Or go on. In any case, hardly something to get agitated about (unless folks write about themselves but then all above still stands)
Agreed. High-risk, high-reward is common in tech. But in better times, the high pay becomes more expected, and is seen less as a hedge against job loss.
Grinding the worker into a fine paste for profit has been the American way since at least the 60s. FDR made a few steps towards a sustainable life as a worker and business interests WENT TO WAR.
Eventually we got a president who fired every air traffic controller in the country instead of trying to make a literal safety critical job reasonable and well compensated, and a huge amount of people lauded him for his anti-worker action.
Meanwhile "liberal" groups basically did coke and nothing else for several decades, losing any support they ever had with a lot of working class people.
So yeah. We have an entire generation of management that knows nothing more than quarterly profits, stock buy backs, and executive bonuses to the point that the rewards from a doubling in American productivity all went to about 100 people at the top of the food chain, and they bought all the newspapers and convinced half the nation that thinking this is wrong is treason and socialism.
This was their actions after they failed to overthrow FDR in the business plot. They wanted fascism in the 30s.
I definitely feel for the people getting laid off...
But hear me out, I think this is going to be a good thing for those people and the economy.
The achievers that are getting laid off now have the opportunity, or are forced, to take that risk to start their own thing and create tremendously more value to the world than they would have at Meta. Alternatively, they could take their tremendous skills to industries and sectors that could really use them and make transformative changes there.
> I think this is going to be a good thing for those people
I want to see you say "You losing your job is actually freaking great!" to the face of one of to those 10k employees who now have to figure out how to pay the next couple of months' mortgage while they try to find a job in a now cautious market overflowing with laid off employees. And please, make sure to tell them it's good for the economy, that should make them even happier.
You cannot seriously be saying you feel for them and tell them them losing their livelihood in this economy is good for them either. Not everyone wants to have a high impact transformative job or change the world. Tons of people - I'd say most - work to pay the bills.
But okay, let's play that game. The 21k employees they laid off were _all_ high comp workers, really? The 150k employees that got laid off since the beginning of the year, just in tech? The slightly smaller amount from last year? All those workers from other industries? Come the F on.
The severance just continues their normal paychecks for several months. Either they were able to pay their mortgages while they were employed or they weren't, but nothing will have changed for the next few months as they job search.
Again, you're assuming quite a whole lot, and ignoring just as much. The 150k people I mentioned were laid off just this year all were obviously not all high compensation/high severance package people[0].
> 1 in 3 laid-off workers received severance pay—worth 16 weeks’ pay, on average
> Only 1 in 3 recently laid-off workers received severance pay, but those who did received 16 weeks’ worth of pay, on average. That far exceeds the current median unemployment duration of about 9 weeks, and may partly explain why unemployment insurance rolls haven’t swelled more substantially in response to recent mass layoffs.
> Workers in financial services (57%), technology (56%), advertising & marketing (49%), and real estate (48%) were the most likely to have received severance.
The market is also saturated with laid off employees, so job search takes time. Companies are actually hiring more H1Bs than last year despite the layoffs, meaning even less roles for citizens/locals[1]. H1Bs touched by layoffs have to find new work inside 60 days. In this economy, tons of companies are on a hiring freeze, so even less opportunities. And I'm only talking about tech in this particular comment, but these layoffs have been happening on a much larger scale in multiple fields (although tech was hit particularly hard).
I don't understand what there is to gain by pretending like everyone's better off that way. The only winners in this whole crap are the companies laying off people, and that minority sliver of employees that happened to have good severance packages.
I was laid off in the Great Financial Crisis and was very early career. Honestly, I was angry at the employer for a few years. Eventually I got over it, and it inspired me to become more resilient & diversified in income. I've had clients, customers, and employers end relationships since, some hard stops and some soft stops. I don't get ruffled anymore by it, and knowing myself without that first layoff in early career I'd not be nearly as able to bounce back after processing.
It's not easy. I wish all the best to the folks who have been laid off -- it sucks, its hard, and really can be nerve wracking.
A few suggestions:
- Register for unemployment right away
- If you have tight constraints on resources (such as low bank account and food/housing affordability) reach out in your network right away -- people, community organizations, food banks, religious organizations if you are an adherent (my biased experience is they tend to be insular with help).
- Junior career or low network cultivation - pound the street, apply to what feels like an uncomfortably crazy number of jobs
- Mid to senior career or high network cultivation - pound the street, connect with what feels like an uncomfortably crazy number of people, even second degree connections
All great advice to make the best of a shitty situation. My comment was more about how tired I'm getting of that same age old "it's better for everyone this way!i!" BS line that doesn't help anyone. The situation is legitimately shitty, tons of people's lives will be, objectively speaking, negatively influenced by this from no fault of their own. Can we just stop pretending like it isn't shitty?
My personal finances are fine, I have decent income and savings, am decently protected in case of a layoff, and I'm not in a situation where I was laid off either. Actually myself had to announce it to 2 people from my team recently. I'm not angry at the employer in particular - don't hate the player, hate the game, blabla. I'm more generally angry at the way we choose to live in having no basis in humanity and no other reality than shareholders' wallets - seriously, who did _not_ know that the hiring rate of the last couple of years would not hold? - but that's another story.
So reward a company by cutting their ability to innovate, over reining in the mismanagement and leadership disaster at the top which put the business into this position in the first place.
I really despise the short-term thinking and lack of vision that the investment class and experts possess (or lack).
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[ 2.6 ms ] story [ 232 ms ] threadFrom what I can tell, the recent wave of startup layoffs seems largely driven by companies bracing for a potential economic downturn and using their own customer data to anticipate seriously bleak scenarios. But if that's the case, are we basically still in the early innings of this crisis? Logically, the domino effect would mean that step two involves companies closing up shop and going belly up, right?
For the bigger public companies their data is available through yearly SEC filings. Just look it up. They’re making record high revenues. Layoffs for them are an optimization not existential. They could’ve been fine laying off fewer people but it protects them from their growing competitors and longer term global trends.
Doomsaying will always be popular but is often misguided. You’re basically relying on a broken clock being right twice a day.
Things aren’t good, or bad.
But all economic signals point to it potentially turning very bad, quickly.
Source: a little bird told me some companies do such rehiring, and for many H1B holders it is an offer they can’t refuse.
It never is. If anything, tech corporations that have been hot startups two decades ago are shedding their larval teletubby skin and transform from sheltered colorful environments suited for men-children into... well, just your average run-of-the-mill ruthless capitalist businesses your boomer parents/grandparents know and loathe.
The thing is, if they mention they are people-driven casually, they likely know the notion — you can expect some respect for employee rights (provided you do your own homework, can haggle like a used car salesperson, and can tell decision makers from HR personnel); if they emphasise it so much it reminds you of a cult, or if they don't mention it at all, but are instead brimming with descriptions of the company's grandeur, run — if you have anywhere to run these days.
We've all been experiencing recession since last year, when food and gas prices started to increase. While some regions are more impacted than others, the price of everything has increased.
For those who make over a certain amount (i.e., $100K/year) it's less noticeable than for those making under that. Because budgeting.
Bezos himself warned of this back in November 2022: https://www.msn.com/en-us/news/technology/why-jeff-bezos-is-.... When ultra-rich tell you it's going to be bad, probably best to plan for that. Also, where is the government in all this? Why are ultra-rich still not paying taxes? It's quite an alarming and vulnerable position for majority of people in the United States right now.
With larger companies like Meta, their multiples are also based on growth. So even though large tech shows no signs of being financially insolvent, they will have to still deliver growth in profit with flat to declining revenue. So the focus then is to decrease expenditures in lieu of revenue. There was a ton of hiring the last few year along with the tail wind of tons of money out there. Now it needs to rebalance.
While hiking yesterday I was talking with a friend about history, and how all great empires turn to “looting” as their influence wanes. There is plenty of data for this point of view: USA, England, France, Middle Ages powers, Romans, etc.
Just as elites in a declining power will naturally “loot” as much as they can to ensure the long term economic well being of their family, doesn’t it make sense that corporate leaders will cut staff, and generally extract as much profit as they can short term?
What's the data? Be interested to read about this correlation.
Anyway, thanks for challenging my opinion - I am likely changing my mind on this.
Also it's hard to make the same kind of analogy with 'corporate leaders' as they are typically employees rather than owners. Employees already loot a much as possible!
See these other videos by PragerU /s
I'd love to know what Volcker thinks about our current situation.
They'll just bring back out their bazooka and lower rates again and cause more inequality.
Tale as old as time.
Volcker is dead.[0]
[0]: https://en.m.wikipedia.org/wiki/Paul_Volcker
I am surprised they have not come up with better models given the technology and data available.
It doesn't seem to be working, for very obvious reasons: demand for energy and food (main cause of inflation) isn't that elastic. Further, there's no unemployment, so people spending and will spend only more because of inflation itself.
The one thing that could motivate people to stop spending, raising bank savings interest rates to something meaningful, is oddly not in the playbook.
In other words, the combo of layoffs and corporate buybacks is about profit taking (while they can).
Every business, market, etc, has a lifecycle.
Social media, and Meta in particular, has definitely entered the Computer Associates phase of its lifecycle. So now it's time to cut to the bone, extract as much blood as possible.
Such is life. It was a fun grift while it lasted.
Hopefully, adjacent malignancies such as digital advertising and freemium will plateau as well. That'll be a relief. They can join informercials, shopping networks, and supplements in the backwaters of human culture.
You only focused on a small part of the person’s comment. The comment also said when stock is going down, lay offs help. They likely aren’t talking in absolutes anyway
Were there hiring surges for companies whose valuations were not going up?
"So far techies themselves have been mostly spared, observes Tim Herbert of the Computing Technology Industry Association, a trade body. Instead, the axe has fallen mainly on business functions such as sales and recruitment. These had grown steadily as a share of technology-industry employment in recent years, a telltale sign of bloat." https://www.economist.com/business/2023/03/27/where-have-all...
The reality is that noone knows whether there's going to be normal growth, stagnation, or a recession, but one thing is for sure: The tech boom of the pandemic has ended along with the pandemic.
So these companies don't have proprietary magic insights and can reliably forecast a recession (as was your question), they're simply responding to the end of the boom and rising interest rates.
An unrelated point would be that layoffs usually target the lowest-performing segment of the workforce and offer legal protection to the company against unlawful termination. Of course not all laid off workers are poor performers but there is obviously a correlation here.
We might be, but more likely is that Meta is facing a reality that all huge companies eventually face: there isn't a play for megagrowth anymore once you are the size of big tech companies. You'll grow a little faster or slower than CAGR. So, since you can't grow the top line, you start looking at the bottom line and becoming more capital efficient. Laying off overpaid people is the start of the process.
It's not just startups though. It's big tech. It's financial services. It's big and small non-tech non-financial companies as well. Everyone has been predicting a recession for well over a year now. We're living in a very unusual economic situation where some parts of the economy are getting crushed and others are doing fine. No one knows the answer to your question, but yes, one possible answer is that this is just the early phase of the downturn and it's just taking longer than usual to move to the next phase.
Pretty sure we are in a slow moving car crash with the knock on effects of rates having gone from 0 to 5% just starting to slowly take effect in the broader economy.
The rapid rise of interest rates is to curve demand, which tames inflation. It's a really nice word for what is effectively targeted economic destruction. Job losses and bankruptcies are the casualties.
And that's not all of it. In my country, aggressive plans to build lots of new homes are imploding. Buyers suddenly face an interest rate 5 times what it was before and opt-out. Builders stop building because nobody is buying.
Right, but there's a time lag effect between when capital dries up and companies go belly up.
Many cash-guzzling companies had 12 months of runway. After layoffs and pivots to profitability, 12 months may get extended to 18-24 months, but ultimately, the traunch of businesses without real business fundamentals will shut down after cash runs out.
The capital constriction really started in Q32022. Here's a graph: https://techcrunch.com/wp-content/uploads/2023/03/Screenshot...
So, my guess is a significant wave of startup bankruptcies will begin Q3 of this year, and peak several quarters later (assuming markets stabilize around current levels).
2nd: When done well, this can lead to more nimble, faster, higher output organizations that get MORE done.
Time will tell
Also if you think Meta is even capable of being nimble, I have quite a few pre-IPO bridges to sell you.
Also, there are very few exceptional leaders and there's some degree of copycatting here.
But what do I know.
Those sound as though they overlap
The productivity of the future (or now) has already been borrowed from, and it has to be delivered on, even if only nominally.
The more people they lay off while keeping that dumpster fire going the more alarm bells go off in my head around the long term viability of their stock. It definitely doesn't belong in a pension.
Its fashionable among herd mentality investors now to do noisy lay-offs, but the smart money is probably quietly hiring these days.
a) it isn't making progress
b) it isn't going away
c) you can count on it
Including towards a potential revenue stream?
I'm perplexed by postings like this, HN should be rejoicing in these right-sizings and the maximization of opportunities for those no longer bound to such inefficiencies.
http://www.paulgraham.com/badeconomy.html
Plus if remote work really takes off, there's no need to crowd all those people into the downtown cores of a few cities anyway. It'd shift housing demand to cheaper, more naturally desirable locations.
What'll happen is that a few firms with ineffective cost structures will go bankrupt, a few major cities will become hollowed-out wastelands the way NYC was in the 1970s or Boston was in the 1950s, and economic growth will pick up in other areas, with new startups and new desirable hubs.
Except in SF or NYC, there aren't that many desirable "different locations" left. Which is why freeing up the poorly used space in city centers can be a net positive for society rather than keeping to maintain these white elephants.
Have you heard of sunk cost fallacy?
WFH is a loss of control. For some leaders, being a "boss" is more important than what's good for the business.
WFH also requires the right culture. I've seen it abused when I worked at Intel, and when Yahoo cracked down on it, the abuses were similar.
I should point out that I've predominately WFH for almost a decade; but it works because I'm trustworthy and I work for people who are managers instead of "bosses." In an environment where the workers aren't trustworthy, or the management structure is more about being a "boss," it won't work.
It's most definitely about money, all the way.
Do you have stats? Or do you even have one good and compelling example?
The "executive class" stand to lose a lot more than the "laptop class" if staff don't return to the office.
Musk has be expressing concern even though it reduces emissions, nominally his primary goal, far more than electric commuting, and he himself heads so many companies that he mostly works remotely at all of them.
He says some contrived argument like that because people who deliver food and work in factories can't work at home, it isn't fair for office workers to so they should suffer as penance to balance out the karma scales. It's like saying if you eat Alaskan crab legs, your little league baseball coach job should be done on a boat in the Bering sea.
He tied the company into a 3 year lease and then sold our company to a multi-national company. Not the company that owned the office just the company using it nice extra little earner for him considering he also set the rent amount as well.
Companies like Meta were all gung ho about remote work in 2021, when they hadn't seen the long term impact of it. The push inside Meta for WFH not being as effective for new employees started coming up in 2023 after the performance evaluations were done and they noticed a trend. You might argue that the data analysis might have been incorrect, but that's another question. The same company is also heavily cutting on office space.
I know people in tech are pro remote but let us not come up with these wild unsubstantiated theories to support what we like.
Remote work might not be as effective for every company on the same level, maybe it is the culture, maybe it is role dependent, but it is simplistically not just about some shadowy real estate moguls.
Tech workers have been warned about this all through the latest tech boom. It might be too late. Any union formed now will be broke and desperate at any negotiation. It's like trying to buy flood insurance while you're on the roof waiting for rescue.
I imagine if we do see tech collective action it'll probably be done quietly in the form of silently exploding technical debt, with documentation that misleads more than it informs and products that collapse under the weight of their own unmaintainability.
Work to rule would kill any tech company. Imagine your biggest contract having to wait 2 weeks before you can fix the bug that is crashing their business.
Imagine zero tech support because unpaid after hours tech support is horse shit.
Off the top of my head, paths to explore would include:
- no full-time/paid positions as union officials
- term limits on union officials
- limited budget
Perhaps I’m naive, but the last item seems especially appealing. I don’t quite see why unions need big budgets, as it seems to me their activities should more or less revolve around the kind of collective discussions that can take place on Zoom or a forum. As such, expenses would be more or less limited to operational expenses for these tools.
I’d actually consider joining a union that was sufficiently restricted in scope, and narrow in its focus.
The trickier question is how to avoid the failure mode of unions defending known-bad employees. Having worked a few union jobs in the past, there were more than a handful of colleagues I sincerely wished would get fired, but for whom the union afforded undue protection.
I might be wrong, but I don't think the average employee salary would be nearly as high as they are, given unionisation costs quite a lot of money, that drives up the cost per-employee massively. You might say now is the best moment ever to do this, but I don't see why that would be true.
In what made up reality is that even remotely true?
Everyone I know in a union pays a couple hundred bucks tops. Is it really not worth an xbox to help your fellow worker be happy, healthy, and sustainable?
WFH means work-from-anywhere, which dooms the leverage of a union
30 years after first trying to replace all of us, they have still been unable to do so because it just doesn't work that well, even with a hybrid WHF company.
You don't go from worker to owner until you buy three properties to rent out or start your own business.
A mere millionaire is a lot less rich today b/c inflation (though probably still at least petit bourgeois.)
understood the theory isn't all about that. I reflect on work because I think so much of liberation can begin with freeing peoples time/regaining 'real' control of their time
Not to mention the fact that unions often support politicians I would never vote for, let alone donate to or organize for.
As George Carlin said: "They are getting fcked by a system that threw them overboard 30 fcking years ago."
100% agree when it comes to the 2008 crisis, and the bailouts, and the zero percent interest rates for 20 years.
But what has this got to do with layoffs at meta? Did they get a government bailout?
Can we stop saying this? Many taxes are paid before profits exist. Taxes are the sure thing; profits might happen, or you might go bust and investors lose all the money. That's not socialised losses. That's privatised risk, losses, then socialised taxes, then whatever's left is "privatised profits" - i.e. people actually getting a return on a risky investment.
While you're arguing class warfare, I think it is worth asking whether the "serfs" (dictionary: "an agricultural laborer bound under the feudal system to work on their lord's estate") at Meta are working on things that improve society... Isn't the typical developer at Meta making hundreds of thousands of dollars a year making systems that are destructive to the social fabric and cohesion of society?
So far, the arguments against that I’ve seen have been hypotheticals and boogeymen.
Tons of farmers supplied the compost that Haber-Bosch used to perfect their way of making amonia, later used to make hydrogen cyanide (a pesticide later used in late 30s germany for non farming purposes)
You can be a serf and be a necesary cog in a machine for destructive purposes.
The hundreds of thousands of dollars a year still keeps those devs much closer to a homeless person than to any single Billionaire. A rich serf, is still a serf.
I hate to be argumentative, but you really need to educate yourself on serfdom https://en.wikipedia.org/wiki/Serfdom
You aren't, thats a nitpick not an argument
> you really need to educate yourself on serfdom
Sure, I could make a long explanation about middle engalnd feudal titles and how despite our modern conception of most poor people as serfs, a middle class of Franklin existed, that comprised the kind of freemason associations that now still exist in the City of London as Guilds, although most are currently NGOs and charities some still work on their original mission.
Or I could use serf as "non ruling class" following the comment I replied to, because that is how OP used it. Although technically he probably meant peasant as that was the class which no land whether serf or just labourers, I understood what he meant and replied tongue in cheekly about how some farming chemist aided the nazis, I say tongue in cheek because I made the farming connection to serfs
Hopefully the analogy works for you now that is being laid out.
But, looking at this another way, when you make an example of a highly compensated, in demand worker (like a senior SW engineer), what message does that send to everyone else without the same qualifications?
How come serfs are richer than the capital class?
Chris Rock explained the difference well when he said, “Shaq is rich, but the white man that signs his check is wealthy.”
https://dqydj.com/income-percentile-calculator/
300K puts someone at 97 percentile (top 3%). Nice, but nowhere near top 0.01%
It doesn't have the resolution to go into fractions of percent. Found this older (2018) article which says that 0.01% top income would be an income of $35 million a year. But that's 2018, so should be quite a bit more today.
So, it's safe to say that there are a hanful few people at Meta in the top 0.01%, but not many.
So I would assume your quoted numbers means top 3% of the US, whereas I've argued world?
I have been searching for some time now without success, even ChatGPT tells me there is no such number, because many countries don't have the statistics, different taxation systems exist etc.
Some numbers I have found are around the 0.1% percentile for $300k yearly income compared to the world.
With both members of the household working at Meta/in the valley and and household income of 600k/y we get below 0.1%, because in many countries even households with high income do not have double-earners with that kind of income.
The upper class has no skills other than dealing with money. Their power is the value we assign to money.
If we all decided tomorrow to use another currency and exclude the upper class from using it, in 1 week they would be starving.
The idea that facebook developers are “the working class” engaged in a class struggle to overcome oppression is just.. wow way out there! The struggle exists but it’s not at Meta engineering.
EDIT: I’m not saying layoffs aren’t mean/stupid/preventable. I’m only saying that it’s not oppression or class struggle. I can’t understand that people can write this stuff on HN while living in a country where it’s legal to pay restaurant staff below minimum wage cause hey tips amirite. There’s plenty class struggle in America, let alone the world, but not a whole lot of it at Meta.
Context: I live in $NOT_BAY_AREA and the amount of money you folks make while complaining as if you’re an Amazon warehouse worker really rubs me the wrong way. It seems to me that Bay Area tech people (or at least the ones in this thread) lost all sense of reality.
I get that getting fired is stressful but if your skillset is in such high demand as tech skills are in SFBA, it’s not class struggle.
I don’t disagree that layoffs like these are stupid, preventable and maybe even mean, I merely disagree that it’s oppression. It hurts the people who do get oppressed and not paid a living wage.
All people who sell their labor are in the worker class, period. Pretending that being paid a token amount to feel special and make them see fellow workers as not in the same boat is unhelpful.
The serf analogy makes sense for low-income Americans who essentially have to pay more to the capital class: payday loans, cannot afford bulk discounts due to low cash reserves, rent vs buy, crippling debt, etc
FB white collar workers are literally the capital class, eg, paid in RSUs and LI profiles advertising as angel investors
The only reason I am writing this is it's super disheartening to start the day with seeing engineers not understanding how historically lucky they are, and much more importantly, how rotten the situation is for their neighbors. "Tell me you and your family have never struggled without.."
As a historical note, most Americans are taught enough empathy to not joke about slavery. But guess what: serfdom was happening around the same time, has a lot of violent similarities, and also has descendants who are not thrilled by it. But don't let this distract from my primary point about misunderstanding that technologists are the gentry here, not the serfs, in this terrible analogy.
Contrast this with a person with many millions or billions in wealth. That person literally does not ever need another paycheck to live. In other words, they do not need to work to live, unlike a typical worker making wages.
What does that mean?
The 300K is the paycheck (annualized). It's what they use to pay expenses to live. If the paycheck goes away you no longer can pay those expenses.
i.e. of course they need the paycheck to live.
Are you suggesting someone who made 300K once can now retire instantly and never again need a paycheck? It doesn't feel like the above quote is fully thought through.
Now, sure, if they've been making 300K for a couple decades, hopefully they've stashed away enough to eventually retire. But that's a very different statement.
I don't think it's really surprising that most of tech thinks wealth inequality is not about them while being in the 1%.
Or moving and driving up prices in places with much lower median incomes so they can have a better quality of living.
It's the amorphous, abstract, system you see, not them. They are not part of the problem.
What is happening now seems to be a claim of not being rich at all, which is honestly just weird.
>the average one percent household in the larger San Francisco-San Mateo-Redwood City region makes a whopping $3.5 million plus.
You can also use the average instead of the median, and get a much higher required income for the top 1% :)
The median household (ie entire family) income in the US is 70k. Even in california it's ~100k.
The point was clear - Tech is very wealthy, and believes they are just the random common person.
The senior software engineer at Meta has far more in common with a blue collar guy living paycheck to paycheck than he has with a CEO whose wealth grows faster than his or her ability to spend it.
I've said this before but the way I see it, almost all of us are N missed paychecks away from bankruptcy. For a lot of people, that N is 1, for some, it's 2 or 3, or even higher if you managed to save wisely. But we all have some number N. And the fact that we have that number should unite us against the few people on the far side of the derivative curve whose N is infinite. Tech workers had their relatively brief moment in the sun where their N was maybe 10-20, it got to our heads a little, and we started thinking we were "very different than a blue-collar worker".
The nice explanation is that if you’re doing well, you may be happy to pay lots of taxes so others can do well too.
The selfish explanation is that you want to live in a community with low crime and high trust, which requires a certain baseline living standard for everybody.
Only with the, in my experience uniquely American, idea that people can’t possibly be in against a policy or situation if they’re not immediately short-term personally hurt by it do you need this doublethink that tech staff at Meta are being oppressed.
No. The senior software engineer at Meta and the CEO can both afford a comfortable lifestyle. Yes the CEO can afford a more comfortable lifestyle, but they're still limited by things like health. The blue collar worker earning $30k a year is in a different position entirely.
I know both people who are very rich and people who are poor. The very rich and the senior-engineer types both live comfortable lives. Yes the very rich can have more luxuries if they so desire, but who cares? Not even they do...
The poor live a different life: Freezing winters without heating, 8°C inside their home. No access to warm water. Calculating cost vs calories for food they buy so they get the calories while spending as little as possible.
[0] https://news.yahoo.com/former-meta-recruiter-paid-200-144500...
When you get fired from Facebook and then try to save money by canceling Netflix, then Netflix isn't going to be very happy about that, whilst they very much are capitalist. Most companies depend on customers having disposable income.
https://www.macrotrends.net/stocks/charts/META/meta-platform...
“The PE of 9 is low which is unusual for these companies. Apple is 24 and so is Microsoft”
“Forward earnings suggests a P/E in the 20s in 2023”
https://news.ycombinator.com/item?id=33366322
When is our industry going to finally come to the realization the people running these companies don't actually seem to know what they're doing? Meta isn't hemorrhaging money because of a 'challenging economy' and 'weakened digital advertising market', Zuckerberg personally drove Meta into the ground with his misguided Metaverse pipe dream nobody really wanted to begin with.
Ugh...I hate sounding like a Meta/Zuck apologist but Meta is worth hundreds of billions of $$ and makes billions of $$ in profit every year...surely they know something about what they're doing..
https://www.forbes.com/sites/dereksaul/2022/11/03/meta-is-th...
It seems like the kids with no skills being offered ~200k to sit around and learn are no longer being offered positions. This year we have postgrads applying for internship positions (paid), and our incredible intern from 2 years ago who went to Apple is taking a job with us soon.
They burned billions of dollars and years of dev time on a product that was a bad joke at both the implementation and vision level, all while their mainstay products that actually make money are decaying in real time. Facebook is a product fully relegated to regurgitating content from meme pages to 40+ year olds + getting into extremely uninformed political arguments. It is a zombie product with no hope of revival. Instagram is better but is still showing shakiness in its business model and audience retention. And they can't monetize Whatsapp without ruining it. So they had to make a leap, but they chose an area (VR video games) that they had no pre-existing experience in and got nowhere in the 9 years since they bought Oculus. Oculus was the cutting edge in VR, so one must imagine that they also squandered that talent given the state Horizon Worlds is in.
Shouldn't dozens of high-ranking heads be rolling for such profound mismanagement and gargantuan waste of company resources?
>Despite the cost cuts, Meta is still investing heavily into the nascent metaverse, and its Reality Labs unit, which is developing virtual reality and augmented reality technologies, logged a $3.99 billion operating loss while generating $339 million in sales in the first quarter.
>Investors have praised Meta’s major cost-cutting, sending the social networking giant’s shares rising 180% to $246.74 since bottoming at under $89 in November.
the company has money, management keeps investing in a dead end product & making workers pay the price for its lack of success, and the soulless ghouls who parts of the company make money off people losing their jobs
this seems wrong
Same as some high tech banking positions, you accept morally dubious work and get compensated adequately. I dont see people here complaining when ie Goldman Sachs fires 10% of the workforce either, rather some childish schadenfreude is not uncommon.
Look at it this way - maybe those brilliant people will grok the life lesson and tune down their greed a bit and try to make the world a bit better place instead. Or go on. In any case, hardly something to get agitated about (unless folks write about themselves but then all above still stands)
0. Assuming for a moment yhat such a thing exists.
Eventually we got a president who fired every air traffic controller in the country instead of trying to make a literal safety critical job reasonable and well compensated, and a huge amount of people lauded him for his anti-worker action.
Meanwhile "liberal" groups basically did coke and nothing else for several decades, losing any support they ever had with a lot of working class people.
So yeah. We have an entire generation of management that knows nothing more than quarterly profits, stock buy backs, and executive bonuses to the point that the rewards from a doubling in American productivity all went to about 100 people at the top of the food chain, and they bought all the newspapers and convinced half the nation that thinking this is wrong is treason and socialism.
This was their actions after they failed to overthrow FDR in the business plot. They wanted fascism in the 30s.
Do you have other sources that support this assertion about the 30s?
Used to be called "Personnel" - dry but definitely about human beings. Now it is "Human Resources" with the emphasis on the faceless resources part.
But hear me out, I think this is going to be a good thing for those people and the economy.
The achievers that are getting laid off now have the opportunity, or are forced, to take that risk to start their own thing and create tremendously more value to the world than they would have at Meta. Alternatively, they could take their tremendous skills to industries and sectors that could really use them and make transformative changes there.
I want to see you say "You losing your job is actually freaking great!" to the face of one of to those 10k employees who now have to figure out how to pay the next couple of months' mortgage while they try to find a job in a now cautious market overflowing with laid off employees. And please, make sure to tell them it's good for the economy, that should make them even happier.
You cannot seriously be saying you feel for them and tell them them losing their livelihood in this economy is good for them either. Not everyone wants to have a high impact transformative job or change the world. Tons of people - I'd say most - work to pay the bills.
If I had to guess, probably with the surplus of their previous massive compensations and extremely generous severance.
But okay, let's play that game. The 21k employees they laid off were _all_ high comp workers, really? The 150k employees that got laid off since the beginning of the year, just in tech? The slightly smaller amount from last year? All those workers from other industries? Come the F on.
> 1 in 3 laid-off workers received severance pay—worth 16 weeks’ pay, on average > Only 1 in 3 recently laid-off workers received severance pay, but those who did received 16 weeks’ worth of pay, on average. That far exceeds the current median unemployment duration of about 9 weeks, and may partly explain why unemployment insurance rolls haven’t swelled more substantially in response to recent mass layoffs. > Workers in financial services (57%), technology (56%), advertising & marketing (49%), and real estate (48%) were the most likely to have received severance.
The market is also saturated with laid off employees, so job search takes time. Companies are actually hiring more H1Bs than last year despite the layoffs, meaning even less roles for citizens/locals[1]. H1Bs touched by layoffs have to find new work inside 60 days. In this economy, tons of companies are on a hiring freeze, so even less opportunities. And I'm only talking about tech in this particular comment, but these layoffs have been happening on a much larger scale in multiple fields (although tech was hit particularly hard).
I don't understand what there is to gain by pretending like everyone's better off that way. The only winners in this whole crap are the companies laying off people, and that minority sliver of employees that happened to have good severance packages.
[0] https://www.ziprecruiter.com/blog/survey-of-recently-laid-of... [1] https://www.epi.org/blog/tech-and-outsourcing-companies-cont...
It's not easy. I wish all the best to the folks who have been laid off -- it sucks, its hard, and really can be nerve wracking.
A few suggestions:
- Register for unemployment right away
- If you have tight constraints on resources (such as low bank account and food/housing affordability) reach out in your network right away -- people, community organizations, food banks, religious organizations if you are an adherent (my biased experience is they tend to be insular with help).
- Junior career or low network cultivation - pound the street, apply to what feels like an uncomfortably crazy number of jobs
- Mid to senior career or high network cultivation - pound the street, connect with what feels like an uncomfortably crazy number of people, even second degree connections
All the best to yall.
My personal finances are fine, I have decent income and savings, am decently protected in case of a layoff, and I'm not in a situation where I was laid off either. Actually myself had to announce it to 2 people from my team recently. I'm not angry at the employer in particular - don't hate the player, hate the game, blabla. I'm more generally angry at the way we choose to live in having no basis in humanity and no other reality than shareholders' wallets - seriously, who did _not_ know that the hiring rate of the last couple of years would not hold? - but that's another story.
By analogy: the cost of achieving 0 deaths from automobile accidents is probably not worth it. Still, prob best not to mention it at the funerals.
I really despise the short-term thinking and lack of vision that the investment class and experts possess (or lack).