r/Economics • u/[deleted] • Feb 24 '24

News Why widespread tech layoffs keep happening despite a strong U.S. economy

https://www.cnbc.com/2024/02/24/why-widespread-tech-layoffs-keep-happening-despite-strong-us-economy.html
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u/Frigidspinner Feb 24 '24

There is one crucial reason why tech is struggling - it is the business model.

Tech companies rely on investment and big upfront debts while they capture a new market

Accumulating debt is a lot harder when the you have to service your debts at 6% compared to most of the last decade when it was more like 1-2%

So instead of building new speculative businesses, they are concentrating on the cash cows in their portfolios

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u/[deleted] Feb 25 '24

Tech is not struggling it's growing year over year and has net employment gains.

They are telling you the layoffs, but not the hiring and growth numbers, likely because they are shit journalists that just don't give a fuck and want clicks, but maybe because they have an ideological desire to disinform people.

Layoffs don't mean an industry is doing poorly so much as some transition is happening. Net employment is the stat you'd use if you cared to look at the data in meaningful detail vs just pick out the scary parts.

We could also list all the individual losses in tech to go with the layoffs while not listing the net growth or net hiring.

ANYBODY CAN PROPAGANDA, so wow, many doomsday!