At NPR Lauren Warmsley echoes what I’ve been saying about the layoffs in the technology sector:
More than 24,000 tech workers across 72 companies have been laid off this month, adding to a total of 120,000 tech jobs lost this year, according to layoffs.fyi, which tracks job cuts in the tech industry. It’s safe to say a reckoning is underway, even as each company is grappling with its own challenges. (See: Twitter.)
Many of the companies making public statements have cited at least one of two primary causes:
First, they hired a lot of employees during the pandemic, when people were extremely online. Now, the internet boom has faded, offline life has picked up, and those new employees seem too expensive.
Second, broader economic wobbles have made brands more reluctant to spend on digital ads–a source of revenue for many tech companies. High interest rates have put an end to the cheap-money era of venture capital.
It’s hard for me to imagine that these layoffs will not have an impact on salaries in technology and on people studying computer sciences at the college level. Nowadays people go to college for a job. Getting a starting job that pays decently in computer has just gotten harder.
Yes, technology is having a bubble pop.
But it isn’t going to be confined to technology.
High interest rates hasn’t just killed cheap-money venture capital. Its killing new housing and soon every area of the economy that uses financing (which is a lot more than one assumes).
Mortgages at 7%, car loans at 5% — if housing and autos suffer a major recession, is it possible for the rest of the economy to have a soft landing?