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Why widespread tech layoffs keep happening despite a strong U.S. economy (www.cnbc.com)

submitted 10 months ago by MicroWave to c/economics

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The tech sector is having a big 2024. Nvidia just crushed earnings expectations. The artificial intelligence boom remains in full swing. The tech-heavy Nasdaq index is up more than 8 percent year to date.

The U.S. economy is also doing surprisingly well, adding 353,000 jobs in January, well ahead of economists’ forecasts. Hotter-than-expected inflation data may also keep the Fed from cutting rates as soon as the market expects, a sign that the economy remains strong enough to support tighter monetary policy for longer.

It’s a different story for tech workers, though. 

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[–] [email protected] 17 points 10 months ago (1 children)

I disagree that tech is overpaid and overrated. Every single business has tech needs, and those needs are simultaneously varied and specific, far beyond what a college degree can teach. Hiring an employee who has the specific skill set for an organization's needs is therefore costly.

For example, I started with a generic IT degree, focused on virtualization for a decade, then shifted into cloud computing. There are no degrees for either of those specializations, and the amount of work to truly understand the systems and architecture takes years. My company couldn't hire someone straight out of college and pay them $50k to do what I do - the knowledge just isn't there.

[–] [email protected] -4 points 10 months ago (1 children)

I didn't say it's useless, I said overrated and overpaid. Those are very different words.

There is absolutely no reason to pay entry level engineers six figures in the Valley, for example. And there is also no reason to hire giant swarms of developers to develop pretty basic functionality.

Just look at Spotify, for example. They had over 8000 employees in 2022. For what? A basic app that didn't really change in the last 10 years? Yes, it's not all developers, but even assuming just 10% are, that's over 800 people. Very well paid people. For which business value?

[–] eskimofry 3 points 10 months ago (1 children)

Tell me you don't understand software in greater than 100 words.

[–] [email protected] -2 points 10 months ago

I'm a software developer....