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They overhired during Covid, the sales in tech is also down during economic uncertainty because no one wants to invest in an expensive technology when no one knows what will happen to economy. Most cfos have been predicting recession for the last 3 years (wars, inflation, supply chain, etc). When that happens, budgets freeze and tech is losing a lot of revenue especially in non critical areas. A lot of them also relied on Europe sales and their economies are weak. Add ai to the mix and no stability in politics where both parties are playing the “we are different” card
PREDICTING recession? Recession is upon us.
Over hiring during COVID and trying to rightsize, offshoring for cheaper markets, and investment in AI.
Chief
No, enshittification will continue. American innovation has stalled. The writing is on the wall and China and India are poised to better compete and win in American markets. Maybe, "American" companies may still exist, but the talent is going to be foreign (mostly, it already is).
https://www.josephbronski.com/p/how-much-do-big-tech-companies-discriminate
Chief
FAANG hires mostly foreign talent whether they live here or not. Their preference for foreign talent means that they pay less and get less. American products are getting worse. At the same time, we are subsidizing India and China tech workers. Their skills are growing and they will soon be able to leapfrog our workforce. Furthermore, a ton of our young talent is quitting. This is going to be a disaster for America and you will see more unamerican values dominate in tech i.e. China's AI controlling the history your kids read. And eventually, the Chinese and Indians will start their own companies and dominate our markets. We'll be working for them within the next 15 years.
IMO, it is the demand from tech workers for remote work. It has proven to employers if you can do this fully remote, they can hire someone outside this country.
I do not agree with web developer 1’s very race-based analysis of IQ etc. That doesn’t even matter because offshoring and outsourcing has been around since the 90s. Why bother looking and numbers for IQ and doing race-based comparison?
What changed is remote work became a norm for tech workers in COVID, and the tools that enabled remote work really boomed in COVID (remember the rise and fall of ZM stocks?). Now, employees were fighting the RTO mandate.
My employer explicitly asks me “can this done remotely?” BEFORE they open a local role. This is all happening even before the role gets posted. I’m sorry: If every new hire is going to fight management on RTO, it only makes sense.
There are a lot of factors, but I think the overarching one is just the economic uncertainty. Companies keep churning workers trying to get the right combination, and they're constantly trying to reset for some new approach. But underlying it all is just the fear that the economy is head for some real chaos this year. For instance, now we're hearing of potentially many thousands of federal workers, many with tech backgrounds and skills, being laid off. Dark events like that will convince the general public to stop spending on anything but essentials, and the ripple effects could be profound.
Uncertainty about conditions and how things are going to play out. Also, while some are spending, there are many that have already spent a lot and need to start making more money. That is why you may see some technology services companies that produce software and provide services and they are only looking for sales people. No engineers. No finance. No HR or other.
There are other factors but I think those may not have been covered in other comments
I've heard it was over-investment in AI research, which has now matured into something that doesn't need so much research and development now, coupled with lost confidence in the dollar amid global supply chain issues a.k.a. supply-side recession.
Overhiring during COVID for sure. Many companies still have more employees than pre-covid but the economic outlook changed so they’re trimming down.
Outsourcing is huge too but I feel like it’s more in relation to any over-cutting done post-COVID. I work with many contractors, a lot of them are not good and create more work. The ones that are great are few and far between.
AI I don’t think is a true reason for layoffs and slow hiring. It’s just not at that point yet. My team has been pushed to include it in more work for political reasons but I haven’t witnessed it take any technical jobs.
Too many H1B visas isn’t helping.