Don't worry, small-to-medium software companies do exactly the same.

Well, at least Germany is at the brink of a recession. And the signs are there to see for quite a while now. Companies restructering and preparing for an expected economic downturn can be hardly called bad management. Also, not eveything is driven by Big Tech, nor does everyone just copy ehat FANG is doing.

If Germany had committed resources to the war earlier, it's possible that the Ukraine conflict would have already ended, and they could have avoided recession.

While I agree that Germany can and should do more, it is worth pointing out that France, Spain, and Italy are all contributing less than Germany. And Switzerland's level of aid is frankly appalling (too much money to be made in laundering Russian money apparently).

https://www.ifw-kiel.de/topics/war-against-ukraine/ukraine-s...

Plus, I don't get it why everybody thinks that it was Germany's, or any other single NATo countries, decision what ang how much aid Ukraine was getting when. First was a bunch former Warsaw pact gear, then NATO decided to send top notch hardware, namely Abrams Leopard and Challenger 2s.

So far, the whole miltary NATO aid for Ukraine, which started years before the actual invasion, seems to work out rather well.

Nothing of that has anything to do with layoffs, that economic crisis was bound to happen after COVID and decades of free money.

True. They also have smaller economies and are arguably less responsible for Russia's strengthening. They are also less vulnerable in case of military escalation.

Don't pay heed to the commenter above you. They have been guilt tripping Germany since decades. Germany would have been better off if it had kept it's own interest first, by drawing redlines around American intentions of taking out nordstream.

And I'm not even German, rather an American. But I do keep my eyes and mind open and realize what's going on. Why don't Germans do the same? Hard to think this is the civilization of great thinkers.

You use English the way only a German ever does. Better not to lie at all than to prove so incompetent in the attempt.

What do I gain by lying? I could say I'm a german who stands against American Imperialism, and it would only make my argument stronger.

What do you gain by lying?

Chances are that if Russia was taking a good beating, it would have used nukes. It signaled that plenty of times. The strategy with Russia is to arm Ukraine so that the ultimate Russian defeat comes little by little, akin to the proverbial boiling of a frog.

Separately, the actual leadership of Nato is on the other side of the Atlantic. Everything that Germany, or France or the UK, or any other Nato member does, needs to be sanctioned in Washington. If Germany was perceived to be slow, at least part of the reason for that lies in Washington.

Germany and the rest of the EU have been "at the brink of a recession" for well over a year. (Remember the gas price increases started in October-November 2021, before the war.) Compared to a year ago, a recession seems almost unlikely by now, and if any, seems like it would be small. The US also seems to have avoided a recession. So this is strange timing to me.

I also don't see any companies outside tech doing massive layoffs.

All these layoffs we’re seeing were planned well over six months ago. It’s not coordinated or copy-cat. However, it may be that all the bean counters learned the same lessons in the same schools. So, given certain scenarios, their best answer is: layoff people.

> All these layoffs we’re seeing were planned well over six months ago

Source? Most of the layoffs I've seen have been poorly planned and hastily implemented.

To add to this, there's a massive difference between discussing the possibility due to other tech layoffs that occurred last year and actually planning a layoff.

I agree

My sources are folks who have been in these layoff discussions for six months. I should have said “some” or “many” instead of “all” since I don’t have sources in “all” these places.

It's definitely not like Ericsson went on a hiring spree during covid, like most other companies that are now laying people off. Their employee numbers have barely changed since 2019.

People in tech need to stop thinking that tech is special industry that was just invented in last 10 years.

Layoffs in response to an economic uncertainty/slowdown were not invented by Amazon/Google/Meta/Musk. They're as old as economy is.

Except that in the « old » economy, you would be hard pressed to be allowed to fire thousands of people with a P&L showing billions in profit (at least in France).

Easy: Close the ehole division or site and move it abroad. The lay offs will be more expensive so, sure.

Yeah not in the US, if anything the past decade has been very good for programmers when compared to other industries. There are lots of industries in the US that are more ruthless than big tech.

Note - I'm not making a statement on the current layoff, as I know nothing about Ericsson.

That logic is flawed. Past performance is not indicative of future results. If you see big slowdown coming, isn't it better to prepare for it early? Do you have to wait till you're losing money?

Google had $60B in net income last year. Meta had $23B in net income last year. Amazon had -$2.7B in net income last year. The year before they had $33.3B. Tesla had $12.5B in net income last year. Ericsson had $1.8B in net income last year. Apple (who didn't do layoffs) had $95.2B in net income last year.

Sure, they can't achieve those record profits for four years in a row, but none are losing money soon.

I don't understand what net income has to do with anything. Profit, not income, is the only thing that matters.

net income is another word for profit (confusing I know)

That logic is also flawed. If you see a big slowdown coming, why would you continue making large acquisitions? Why sweep thousands of various ranks rather than tighten your ship carefully where it matters?

Because employees are primarily a cost vs output equation for public companies in particular (and that's even more true with gigantic firms). Acquisitions are broadly viewed as expanding shareholder value (whether accurate or not in a given situation).

The stock market tanked thanks to the Fed rate hikes. It's believed shareholders will respond positively to cost optimizations. So they'll try to hold the line on growth while boosting margins re cost centers.

It's quite straight-forward thinking as it pertains to getting a positive reaction from shareholders.

The question for that context is: are your cost centers well optimized, or can you trim staff (real-estate holdings, inventory, whatever)? That's a very common question that would be pushed at public companies by large institutional shareholders.

Big tech is extraordinarily bloated with labor. They frequently grow at almost comical rates in terms of adding unnecessary employees (they do it just because they can afford to hoover up the talent to keep it from their competition; one common path forward in the hierarchy for managers is to grow their staff count and expand their footprint), and pretty much everyone knows it. It happens with every fast growth era in tech.

We agree, staff trimming makes far more sense. However, what is happening isn't staff trimming.

Are there any papers regarding the labor bloat specific to tech? Everyone believing in something doesn't make it true so I would love to read more about that beyond the usual memes of "girls on tiktok posting about their day in tech".

Actually, this idea that it's done because of bloat signals something interesting. The reply above claims these layoffs happen because of the future potentially showing massive slowdown - however, why are we trusting what these companies feel about the future when they got their pandemic move completely wrong? They thoroughly believed (apparently, so they say in their layoff emails...) that this growth was going to continue, so obviously they don't have the best grasp on how to make decisions for the future. Entirely negating the above reply that this is due to impending slowdown.

Yeah, but you also wouldn't see 200% YOY headcount growth in larger companies.

The companies that actually grew responsibly (aka not FAANG) are generally doing less/smaller layoffs/none at all.

Ericsson is as far from those as you could be.

I was speaking more broadly of the tech industry but yes in this case you're correct.

What this tells me is that there is a really big slowdown (Depression?) coming that threatens even the huge COH of that these companies currently have.

This new economy was one of extremely low interest rates.

Ericsson is a bit of a bell-weather company with broad exposure globally. It is the Intel of network equipment providers. It is concerning.

Well that's France, where like in Italy and Germany. it's much more difficult to fire any one person, a department, or N% without much advance notification and government approval. For the worker, it's a very good thing.

Americans don't know how bad they have it and don't remember the mass layoffs of the 1980's and 1990's. A time when jobs became scarce because nearly every company was following suit and REAL unemployment, including those who stopped looking for jobs, rose considerably. The REAL labor participation rate in the US is more like 55% rather than 62% due to the rosy and flawed methodology used to count U-1 through U-6. There are millions fewer middle-aged workers now than there were historically. Ageism, discrimination, and other factors discourage workers from seeking to reenter the workforce. Low skill workers have it worst, cannot always move great distances, and cannot always retrain into magical hypothetical jobs that don't exist. Many underemployed people become Uber and Lyft drivers, where there is the perception of freedom but there is net underpayment and abuse (no help with capitalization, depreciation, and maintenance of a vehicle make their effective pay well below that of taxi drivers).

The global situation is the US Fed's fault for giving out free money for years and then suddenly being a Grinch because they don't like "excess consumption" when there have been shortages and supply chain disruptions. US trucking is still a mess.

You can absolutely fire people in France and many companies have done it by the thousands. They just did not happen to have billions in profits at the same time.

No doubt helped by the modern neoliberalism* wave of Macron.

And raising the retirement age.. and more austerity too?

* For anyone unfamiliar with the term: think corporate "Liberal" (conservative lite) inspired by the American Clinton dynasty including Obama and Biden who are pro-neocolonialism, anti-union, anti-worker, and "tough on crime". Macron's type is sometimes seen as a "palatable compromise" compared to the regressive fascist nationalists like Le Pen.

> Americans don't know how bad they have it

a lot of us are pretty aware... just powerless to change things en masse.

That outlook has a name: "learned helplessness". It's the belief of lacking power that is the problem. There is plenty of power that can be had when workers organize. Don't cross taxi unions in France or they'll burn shit down. Cross French farmers and they will clog the highways and streets of Paris.

As a global perspective: American employees tend to lack testicular fortitude because they lack hope, knowledge, and self-worth.

yeah you can't compare france and the entirety of the us. france is the size of one state in america. the power to change things en masse in america lies in the congress which is outsized controlled by smaller states that want the country to go back to the 1600s. you simply can't understand the power of corporations, common law, and the incredibly conservative supreme court the last 40 years. you know nothing of the scale of america.

Or hoarding talent simply to take them off the market and keep them from potential competitors. I feel like this is a relatively new development, at this scale at least.

Few things here: first there's very few big techs in the country, which mean layoffs in the thousands are unlikely. The second thing is that big companies (even the software ones) use an army of external consultants precisely to go around law governing work. They can then go let off people without technically firing anyone.

except the tech industry has been immune to layoffs because it would represent such bad PR to be the one company downsizing in the midst of a bull market. Fortunately for the tech industry, the market is now bearish and they're finally allowed to trim the fat that they've been accruing for over a decade, which is why when someone finally blinked first then the rest followed (and continue to follow).

If there was so much fat to trim, why have they been relentlessly growing headcount for the last 2 years?

The view of laying off in a bull market being bad PR implies those companies wanted to lay people off in the first place.

During the bull market they were fighting with each other to hire more, which is the opposite signal.

Sure the bear market allows them to layoff, but I don’t think they wanted to lay anyone off up until 6 months ago.

Tech / IT is of course special, because it was seen (correctly) as an engine of indeterminately large growth: software scales really well, and integrated circuits are almost as good, currently limited by production capacity, not market demand.

For this tech received very special treatment, colossal P/E, a shower of investment, all in an attempt to grab a slice of this wildly growing pie.

But almost every exponent in reality is a bottom part of an S-curve. The growth was indeterminate, not infinite. As growth stalled or reversed, the special treatment did not exactly stop, but its extent contracted severely. Questions about actual profitability started to arise, for instance.

We don't, I already went through this several times since the first .com wave.

And seeing the support we got in several times via the union fellows in the European countries I have worked on, is also a reason why I am quite supportive of them.

Ericsson has been firing like this previously, it's not new. For example in 2015, and several times before.

That was the end of the last deployment cycle (at least in the US), when the wave of 3G to LTE deployments stopped.

Probably people were "wishing" for the economies not to plateau or go into recession. Remember how they were saying, well, that's not the official definition, claiming the working definition used was not relevant. I think many belied that rhetoric and are now in a situation where they are confronting reality.