The great Tech decline?

There is an obvious slowdown, while the energy companies have hoovered up all the cash, less has been spent elsewhere. However the job cutting is just greed plain and simple. The tech companies are still making healthy profits, just not as much, so rather than just accept good rather than great profits they are making people unemployed.

I think there's a plateau in tech.

Computers used to outcompete their previous years equivalent in speed and capabilities. Now there's plenty of people working on 10yearold computers perfectly happily.

Phones just seem to be adding gimmicks, yet another camera, folding lengthways folding width ways.

Where the business model is over charging and doing so every year that's quite a big drop in income if people decide not to queue for the latest release this year.

Many over-recruited/expanded during the pandemic. They seem to be using the slow down as an excuse to correct that.

Google and Meta rely on revenue from advertising, but as businesses are finding it’s not that effective and the sheer volume of junk means that your carefully polished and targeted message is getting lost - FB and Insta you are just scrolling through loads and loads of rubbish.

Technology-wise, we’ve reach a plateau where the latest mega-pixel-orama camera feature is un-noticeable to the naked eye - besides, who wants Gb-size files clogging up memory and data consumption.

The markets are simply pricing in earnings based on readjusted projections

Fuel and food inflation is taking up more of people's pay cheques, leaving less for everything else.

That's the basic equation

The FAANGs had over-inflated share prices and over-recruited to prevent people going to the competition, even though they didn't really have a need for them. As the economy slows/contracts and their share prices tumble they don't have that luxury anymore and need to bit more fiscally responsible - at least in the short-medium term

Google and Meta rely on revenue from advertising, but as businesses are finding it’s not that effective and the sheer volume of junk means that your carefully polished and targeted message is getting lost – FB and Insta you are just scrolling through loads and loads of rubbish.

I'm not sure this is true, the targeting on platforms like Google and Facebook is very effective. However in times when funding is squeezed, advertising budgets are the first to go, and a lot of big tech is driven by advertising.

I'm not yet convinced there's decline, outside of a correction post-Covid, which was a bit of a weird period where many big tech companies received an unnexpected boost and expanded rapidly. Not yet anyway, there's a lot of economic uncertainty.

However the job cutting is just greed plain and simple.

I don't think you understand how private companies work, they are not there to provide jobs, they exist to maximise the return to their shareholders. If they can do the productive work with fewer people they are duty bound to do so. Obviously many companies see treating their workforce well and retaining well skilled and loyal people as vitally important it's still all part of maximising the return to the shareholders.

Any current downsizing is a response to the overheated recruitment post Covid along with the bubble bursting in the social media sphere. Recruiting good tech people is still difficult so I imagine there are still jobs out there.

and a lot of big tech is driven by advertising.

And more particularly - by lots and lots of small-spend advertisers. What googles and Facebook advertising has done is made effective advertising available to businesses who probably didn't used to advertise at all. Its not about losing the $8bn Proctor and Gamble account, its the billions of small advertisers

There's loads of tech jobs out there still - the "tech" industry is not purely made up of google,meta,apple and amazon - despite what the media would lead you to believe.

All of the above plus...concerns the meta verse is a bad bet, growth of TikTok, increased regulatory pressure and concerns about market dominance, Apple pricing is now best described as 'aspirational'.
Wall St is more likeky to be concerned about long term direction of travel than short term performance.
As to your employer's '..sudden efficiency drive', was it really that sudden?
Were revenues, profits, market penetration/share, sales conversion rates in line with forecasts?
Unless you're part of the exec team it's unlikely the reasons for and timing of the 'efficiency drive' would be shared with you.

To the above point, we had a delayed “kickoff” event yesterday where the more focused company strategy was communicated with rare - in my experience - clarity. This included a member of the board from the PE who explained exactly what a PE does - use returns from its investment in company to maximise investors profit from growth in return for mentoring an experience to accelerate their interest.

It was pretty clear to all the staff what they are involved in. Glad to see it’s not just us. I think overall yes there was a bigger investment in people across tech that was more than necessary, but also large profit margins are being targeted to either pay back Pandemic losses or replicate some companies strong gains in that period.

A lot of people had ridiculous gains during the pandemic and it “looks bad” to have lesser growth in ‘22/23

was it really that sudden?

Only at the staff end of things. Those of us that have been around the PE block before knew there wasn’t going to be no action.

I don’t think you understand how private companies work,

I understand exactly how private companies work, In fact your "clarification" was exactly the same as what I said, just with more corporate spin, I just don't rationalize it as healthy for society as a whole

This included a member of the board from the PE who explained exactly what a PE does

Did they start by telling you what a PE is ?

Isn't the point of "raising interest rates to curb inflation" exactly aimed at stopping people from buying new laptops/phones/bikes every 5 minutes?

global recessions an excuse to slim the workforce, get rid of deadwood, bring new people in, our company is forever restructuring.

Having a warm roof over our heads and food in our bellies is eating up paychecks, especially for the "drones" on lower pay.

Isn’t the point of “raising interest rates to curb inflation” exactly aimed at stopping people from buying new laptops/phones/bikes every 5 minutes?

Yes, but it assumes that inflation is driven by demand, which it currently isn't.

I understand exactly how private companies work, In fact your “clarification” was exactly the same as what I said, just with more corporate spin, I just don’t rationalize it as healthy for society as a whole

What is your socialist solution then? Companies employ people they don't need?

Don't bother dropping your CV in for that CEO tech position....

This is a great read.

It summarises the reasons why pretty much every online platform (eg Amazon, eBay, Facebook, Google, Instagram, TikTok etc) is eventually guaranteed to crap.

'Enshittification' as they have termed it.

Weeksy, I goggled it for you: https://en.wikipedia.org/wiki/Private_equity

Different but similar reasons... they were massively overvalued, the improvements aren't significant enough to drive very high growth levels, pullback a bit on advertising. Also a lot of tech is effectively a service to another company, and within that company the main mission with any service contract is to reduce how much you spend/waste on it

What is your socialist solution then? Companies employ people they don’t need?

Don’t bother dropping your CV in for that CEO tech position….

Greater employment protection laws that make it harder for companies to dump people just so that a small percentage of the population can horde even more money. It isn't that difficult and it doesn't need a communist revolution to push capitalism to work for the majority rather than the 1%ers.

That tech ceo position is not a realistic option for 99.99999999999...... percent of people anyway, it is an idiotic argument to suggest that those few "aspirational" positions should  drive economic and social thinking and policy. But I guess that unfortunately propaganda is still working.

the targeting on platforms like Google and Facebook is very effective.

I dunno, Facebook seems to be convinced that I like golf.

I work in tech, specificaly tech that underpins segments of the energy retail industry.

Last year we were losing staff regularly because the market rate had increased massively - the the company could not compete due to the state of the energy retail industry meaning no funds were available.

This year, however, recruiting has been much easier. There is not a huge amount more money avaialbe, so it is market conditions meaning we are once again competitive.

Take from that what you will.

I dunno, Facebook seems to be convinced that I like golf.

You better do some searches for mail order brides before anyone notices your golf perversion.

Most growth co’s are not profitable and rely on external funding, as do their customers.

When the interest rate is low and money is cheap it is easy to raise investment and everyone has money to employ more staff, buy technical product and services. As the rate rises there is a crunch and they have to layoff.

Priority for some becomes survival, for others its simply profit after a growth phase.

If your product is not essential or providing real value it's going to get churned. It's going to get worse.

Many co’s are a product of a low interest rate and / or covid environment. They will no longer be viable after taking money at crazy valuations with expectation that their growth would continue to the moon.

What is your socialist solution then? Companies employ people they don’t need?

Just because you can cut staff, it doesn't mean you should. There's plenty of evidence to suggest it doesn't save money in many cases.

Anyway, our smaller tech company are having big problems recruiting. There are more jobs than there are people.

There's a lot of comments above that pertain to the consumer tech market and the most well known brands.  The B2B market is getting a lot tougher driven by the current tightening of belts driven by the broader financial pressures, like energy there is some tech that a company has to keep paying for (eg. security, core business apps, or anything which drives compliance) however there is also a lot of tech investment which can be pushed back until there is less perceived risk in investment, this then has a knock on effect on forecast revenues and changes have to be made to reflect this.  We've cut some roles recently which is more due to a re-org in our go-to-market strategy and alignment with new operating models in parts of the business, I'm pretty sure we'll have grown more over the next 12 months regardless, just the new roles will be in different areas (some will. be redeployed if the skillsets fit).

Alot of the headline tech stories are coming from companies (and their owners) that have spent literally 10s of billions over the last few years of borrowed money buying near worthless startups/smaller firms and all that needs paying for. Even the best of them like Slack have no chance of ever turning enough profit to get anywhere close to the valuation.

This included a member of the board from the PE who explained exactly what a PE does

Did they start by telling you what a PE is ?

I just googled it and the top 10 results all say it's a Pulmonary Embolism. And there was me thinking it was Physical Education. Tchah!

Many over-recruited/expanded during the pandemic. They seem to be using the slow down as an excuse to correct that.

Mainly this, I believe.

Targeted advertising on social media is VERY effective and is a big part of the reason these firms have become such titans.

Yes, it is mainly showing me dining room chairs on FB at the mo, when I already bought some two weeks ago, but we notice the hiccups more than when they get it right.

Many over-recruited/expanded during the pandemic. They seem to be using the slow down as an excuse to correct that.

Anecdotally, the tech sales company next door to me went absolutely bananas during our lockdowns, and are still busy/expanding now!

Also, Meta have bet big on the "Metaverse" and I think it's already becoming clear to them that they have backed the wrong horse.

They will survive obvs, but they'll suffer a bit.

I think there is a contribution to this from tech fatigue/cynicism,  the marketing has worn off and we have realised that tech is not 100% a good thing.
Lockdown made people realise that going outside was a good thing.

If they can do the productive work with fewer people they are duty bound to do so.

Total bollocks. Company directors have a fiduciary duty act within the law and in the companies 'best interest'. They do not have a duty to deliver profit to shareholders. The only reason they want to deliver profit to shareholders is that the shareholders might sack them if they don't, and of course the directors themselves profit too. The decision as to whether to cut staff or not is one that is entirely within their power. Recruiting is difficult and expensive - especially in the tech world - so it's perfectly reasonable to retain staff even though they may not be productive if the costs of firing and then recruiting later are higher than paying their salaries. Also retaining staff provides opportunities for investment and future revenue growth through the development of new products and services. As long as the company remains solvent, they can keep as many staff as they like even if they're losing money.

It's partially a correction and partially a consequence. At the moment there are too many people/too much money chasing too few ideas, so many companies have attempted to do the same things, but with limited success. Another factor has been the chip shortage. Many companies struggled to meet the November/December and that lost revenue will never be recovered. January is about budgeting for the new year whether personally or professionally. A lot of tech is a luxury (both in business and at home) and will take a back seat to other things, especially in the first 3 months of the new year.

Facebook seems to be convinced that I like golf.

Give it time...

This is a great read.

That was interesting yes but - what's the alternative? It is very keen to criticise the companies for making money, but it doesn't mention that these services cost money to provide.