Re:Twilio is firing 17% of workforce
by dragonwriter on Monday February 13, 2023 @04:49PM
(#34781186)
> But I’ve lost track of the number of non-answer answers, both public and private, to why companies apparently overhired. We hired more than we meant to. How does that happen?
Overhiring isn’t “hiring more than we meant to”, its “hiring more at time X than is appropriate for the market conditions at X+Y”.
It’s what normal, capital-controlled firms do in times of easy money, the hire more when throwing more stuff at the wall to see what sticks is cheap, and then when a contraction occurs, they cut and milk the stuff that is already working. Its normal business-cycle things. When there is talk of cooling inflation by tightening monetary policy, one of the core mechanisms that that works by is causing firms to cut employees in roles that don’t contribute to short-term returns as much, reducing consumer demand and constraining price increases.
(“Overhiring” is something of a misnomer from any perspective other than the perspective of the time after the hiring when market situations have tightened.)
Overhiring isn’t “hiring more than we meant to”, its “hiring more at time X than is appropriate for the market conditions at X+Y”.
It’s what normal, capital-controlled firms do in times of easy money, the hire more when throwing more stuff at the wall to see what sticks is cheap, and then when a contraction occurs, they cut and milk the stuff that is already working. Its normal business-cycle things. When there is talk of cooling inflation by tightening monetary policy, one of the core mechanisms that that works by is causing firms to cut employees in roles that don’t contribute to short-term returns as much, reducing consumer demand and constraining price increases.
(“Overhiring” is something of a misnomer from any perspective other than the perspective of the time after the hiring when market situations have tightened.)