Despite Booming Economy And Record Profits Google, Amazon, Microsoft And More Lay Off Over 42,000 So Far In 2024::Despite a booming U.S. economy and significant advancements in the tech sector, including a robust performance by companies like Nvidia Corp. and a thriving artificial intelligence (AI) industry, tech companies have continued to lay off workers at an alarming rate in 2024. The tech-heavy Nasdaq index has shown an impressive uptick and the U.S. economy added 353,000 jobs in January, outpacing economists’ forecasts. However, this overall economic strength masks a wave of layoffs in the tech sector
Now compare those numbers to how much they hired during Covid and it no longer looks that bleak.
They overhired like crazy, vacuuming up all the talent so smaller companies and competitors couldn’t get any. Now the interest rates are up (no more ‘free’ money) and they have to cut the fat.
What do you mean over hiring during Covid cause I remember them laying people off at least in my country
All those companies still have more employees than they did before the pandemic: https://steve-taplin.medium.com/big-tech-employee-numbers-before-and-after-the-pandemic-tells-the-real-story-bc67779c3cc8
So including the recent firings they are more on a headcount level of 2021 or so.
While you’re not wrong, no company is calling it out like this. If I were to make a catastrophic hiring mistake, I’d probably be fired. The CEO’s that looked at the pandemic, saw their profit rising, and decided “it’s because we’re so awesome, let’s hire everyone” should bear the blame.
To take Amazon as an example, if you were to take how much they paid for MGM and on Rings of Power, Amazon could have paid salaries to everyone they let go for a full year. It’s a dereliction of duty at leadership level, and the high stock price is the only reason they aren’t out on the street.
Because the economy is so great. /S. Please ignore the fact that we just went through nearly 20% inflation and that now, small and mid-sized banks will begin crashing like dominos, because of their exposure to commercial real estate, when everybody wants to work from home. Mild recessions are necessary. Not severe ones, for sure, but some is necessary.
And this can all be laid at the feet of the Federal Reserve, which is not Federal, and has no reserves, and counterfeits money with the blessing of the government.
Maybe it’s due to over hiring, maybe due to the fact that some those people had jobs that were replaced by AI bots, it does not really matter, right now the market is fucked and good luck finding a job if you were laid off.
Whew! We dodged a bullet! Imagine what would have happened if we Raised Their Taxes or the Minimum Wage!
I think a big reason these companies are laying people off is because we actually did increase their taxes. The Tax Cuts and Jobs Act of 2017 (Trump’s only major legislation passed) changed the rules on R&D deductions after 2022 to balance the other cuts and allow Senate Republicans to pass the bill without a supermajority (through Reconciliation). This was meant to be a poison pill that everyone expected would get repealed before it went into effect, but efforts to repeal it fell apart.
Required R&D cost amortization
Under I.R.C. §174, a current deduction is allowed for research and experimental expenditures paid or incurred in tax years beginning before 2022. The TCJA amended I.R.C. §174 such that, beginning in 2022, firms that invest in R&D are no longer able to currently deduct their R&D expenses. Rather, they must amortize their costs over five years, starting with the midpoint of the taxable year in which the expense is paid or incurred. For costs attributable to research conducted outside the U.S., such costs must be amortized over 15 years. This will be the first time since 1954 that companies will have to amortize their R&D costs, rather than immediately deduct those expenses.
https://pro.bloombergtax.com/brief/rd-tax-credit-and-deducting-rd-expenditures/
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The US economy is booming?
