Pluralistic: Mass tech worker layoffs and the soft landing (21 Mar 2023)

Today's links

A group of firefighters holding a safety net under a building from which a man is falling; he is supine and has his hands behind his head. The sky has a faint, greyscale version of the 'Matrix Waterfall' effect. The building bears a Google logo.

Mass tech worker layoffs and the soft landing (permalink)

As tech giants reach terminal enshittification, hollowed out to the point where they are barely able to keep their end-users or business customers locked in, the capital classes are ready for the final rug-pull, where all the value is transfered from people who make things for a living to people who own things for a living.

"Activist investors" have triggered massive waves of tech layoffs, firing so many tech workers so quickly that it's hard to even come up with an accurate count. The total is somewhere around 280,000 workers:

These layoffs have nothing to do with "trimming the fat" or correcting the hiring excesses of the lockdown. They're a project to transfer value from workers, customers and users to shareholders. Google's layoff of 12,000 workers followed fast on the heels of gargantuan stock buyback where the company pissed away enough money to pay those 12,000 salaries…for the next 27 years.

The equation is simple: the more companies invest in maintenance, research, development, moderation, anti-fraud, customer service and all the other essential functions of the business, the less money there is to remit to people who do nothing and own everything.

The tech sector has grown and grown since the first days of the PC – which were also the first days of neoliberalism (literally: the Apple ][+ went on sale the same year Ronald Reagan hit the campaign trail). But despite a long-run tight labor market for tech workers, there have been two other periods of mass layoffs – the 2001 dotcom collapse and the Great Financial Crisis of 2008.

Both of those were mass extinction events for startups and the workers who depended on them. The mass dislocations of those times were traumatic, and each one had its own aftermath. The dotcom collapse freed up tons of workers, servers, offices and furniture, and a massive surge in useful, user-centric technologies. The Great Financial Crisis created the gig economy and a series of exploitative, scammy "bro" startups, from cryptocurrency grifts to services like Airbnb, bent on converting the world's housing stock into unlicensed hotel rooms filled with hidden cameras.

Likewise, the post-lockdown layoffs have their own character: as Eira May writes on StackOverflow, many in the vast cohort of laid-off tech workers is finding it relatively easy to find new tech jobs, outside of the tech sector:

May cites a Ziprecruiter analysis that claims that 80% of laid-off tech workers found tech jobs within 3 months, and that there are 375,000 open tech roles in American firms today (and that figure is growing):

There are plenty of tech jobs – just not in tech companies. They're in "energy and climate technology, healthcare, retail, finance, agriculture, and more" – firms with intensely technical needs and no technical staff. Historically, many of these firms would have outsourced their technological back-ends to the Big Tech firms that just destroyed so many jobs to further enrich the richest people on Earth. Now, those companies are hiring ex-Big Tech employees to run their own services.

The Big Tech firms are locked in a race to see who can eat their seed corn the fastest. Spreading tech expertise out of the tech firms is a good thing, on balance. Big Tech's vast profits come from smaller businesses in the real economy who couldn't outbid the tech giants for tech talent – until now.

These mass layoff speak volumes about the ethos of Silicon Valley. The same investors who rent their garments demanding a bailout for Silicon Valley Bank to "help the everyday workers" are also the loudest voices for mass layoffs and transfers to shareholders. The self-styled "angel investor" who spent the weekend of SVB's collapse all-caps tweeting dire warnings about the impact on "the middle class" and "Main Street" also gleefully DM'ed Elon Musk in the runup to his takeover of Twitter:

Day zero

Sharpen your blades boys 🔪

2 day a week Office requirement = 20% voluntary departures.

For many technologists, the allure of digital tools is the possibility of emancipation, a world where we can collaborate to make things without bosses or masters. But for the bosses and masters, automation's allure is the possibility of getting rid of workers, shattering their power, and replacing them with meeker, cheaper, more easily replaced labor.

That means that workers who go from tech firms to firms in the real economy might be getting lucky – escaping the grasp of bosses who dream of a world where technology lets them pit workers against each other in a race to the bottom on wages, benefits and working conditions, to employers who are glad to have them as partners in their drive to escape Big Tech's grasp.

Hey look at this (permalink)

A Wayback Machine banner.

This day in history (permalink)

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#1yrago To make Big Tech better, make it smaller

Colophon (permalink)

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