Excuse is only half the story. I don't fully understand why they are doing it though. Companies hire people to make money, not as an act of social conformance.

Global economy doesn't look that terrible. Nor is the AI story that believable. Is it just the CEO Zeitgeist? All the guys at Aspen talking about what fraction they cut, just as 5 years ago they bragged how bloated their org chart is?

TBH the "ZIRP overhiring" seems like the most likely real reason. I could never understand how all these companies could hire so many people for so much money, only to have them work on later-to-be-canned open source projects.

But if that's really it, no idea.

▲ nicoburns 13 hours ago | parent | next [-]

> Global economy doesn't look that terrible.

It doesn't? I was born in the 90s (so admittedly 2008 was before I started working), but the economy is looking the worst it's been in my lifetime to me.

▲ ryandrake 12 hours ago | parent | next [-]

The economy is currently great if your income is from your investments rather than from your labor. The relative comfort and power of the capital class vs. labor class has never been farther apart in my lifetime.

▲ rich_sasha 11 hours ago | parent | prev | next [-]

US real GDP is racing ahead: https://fred.stlouisfed.org/series/GDPC1 . Inflation is fine, even if you don't fully believe the official numbers: https://fred.stlouisfed.org/series/FPCPITOTLZGUSA . Unemployment is increasing but below long term mean: https://fred.stlouisfed.org/series/UNRATE . Interest rates are at a reasonably business-friendly level.

This is all the USofA. Elsewhere, China is allegedly also printing GDP growth like crazy. Europe is maybe a little stagnant but also not, on the whole, awful.

At the face of it, it's at least a C+ if not better. So if you'd claim it's terrible, there's some explaining to do.

▲ didibus 11 hours ago | parent | next [-]

> So if you'd claim it's terrible, there's some explaining to do

Here's the explaining:

  - Unemployment has increased.
  - Long-Term unemployment has increased.
  - Number of gig workers is at an all time high.
  - Layoffs have continued.
  - Personal household dept is at an all time high.
  - Polls show most people have financial anxiety and feel squeezed.
  - Inflation is not under control.
  - Buy now pay later usage is up as much as consumer spending is.
  - Income and wealth inequality are near records high.
  - GDP and consumer spending were also seen peaking before the last 5 recessions as well...

We're all talking predictions, I don't think either of us should pretend to know the future, but there are counterpoints and so the data does not all look rosy.

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marcosdumay 8 minutes ago | parent | next [-]

Yep. It's the "K" shaped economy making your numbers and the GPs real at the same time.

(Well, at least the GPs 1st number. The 2nd ends in 2024, and the 3rd has questionable precision after September.)

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rich_sasha 10 hours ago | parent | prev [-]

I'd say these are symptoms (and I'm not denying them) rather than causes. My point is that it's hard to find hard data that would say the economy is doing poorly. Even unemployment, which is your top line, seems... fine?

I just don't understand where the squeeze is coming from. Either companies figured out how to do more with less people, or they started the cycle with too many people, or they don't know what they are doing. Undoubtedly they are laying people off, especially in tech. But I he symptoms you list don't explain it to me.

	▲	davidgay a minute ago \| parent \| next [-]
		> Even unemployment, which is your top line, seems... fine? The unemployment one is interesting because if you look at that graph, the universal pre-2022 pattern is basically a spike of unemployment during recessions followed by a gradual drop. The recent pattern is a gradual increase. I'm not a big fan of "numerical only / shape of graphs" analyses, but this does seem strange. Of course, the 2020 Covid spike is also unusual, so...
	▲	didibus 5 hours ago \| parent \| prev \| next [-]
		I don't think they're a symptom or a cause. Just indicators the economy may not be doing well. > Even unemployment, which is your top line, seems... fine My lines were in no particular order. The issue with unemployment data is it counts gig workers as "employed." What doesn't add up is that there are fewer job openings, mass layoffs, and rising long-term unemployment (people who can't find work past 6 months). > I just don't understand where the squeeze is coming from. Nobody really knows. It's hard to model the economy and identify cause and effect. But likely candidates are low competition, businesses with coercive leverage on pricing/pay since buyers and workers have no alternatives. Essentials like housing, health, and food have skyrocketed, and we haven't scaled them as demand grew. Companies have abandoned stakeholders, they only care about shareholders. They're squeezing record profits, sustained because buyers are supplementing with gig work, have all adults working, are taking on more debt (and there are more ways to get credit than before), or are abandoning their savings (YOLO). > Undoubtedly they are laying people off, especially in tech. But the symptoms you list don't explain it to me. My list wasn't about layoffs, just signals the economy may be doing poorly. One reason for layoffs is companies believe the economy is at risk. They're avoiding hyper-growth and cutting fat. In tech specifically, I think a lot of it is undoing the mess of Covid, such as ventures that didn't profit, hiring before knowing what to use people for, workers distributed across too many places. Even if one part is growing, redistributing is hard. Easier to lay off and rehire where needed. There's probably some offshoring too. But in general, cost-cutting happens when companies feel they need to be conservative.
	▲	nicoburns 6 hours ago \| parent \| prev \| next [-]
		Cause wise, we probably shouldn't ignore the delayed hangover from covid. But also the longer term trends towards an economy that is extractive rather than productive, and increasingly unequal, neither of which are sustainable.
	▲	chairmansteve 4 hours ago \| parent \| prev [-]
		They are laying people off so they can spend the money on AI data centers.

▲ no_wizard 11 hours ago | parent | prev | next [-]

I'm going to set aside GDP for a moment, which is hardly the full story but instead I want to zoom in on inflation.

The Federal Reserve of St. Louis is using the CPI numbers, as most government agencies do. I would contend those numbers in and of themselves lie. The ALICE index, which is based on more comprehensive data[0][1] and closer to what CPI used to represent before the major adjustments in the 1990s, tells a different story[2]

Inflation against the ALICE index is much higher than the 3% reported in by the Federal Reserve, running at a stark 5.9% YoY change. This honestly lines up much closer to the reality I see in my day to day life than the CPI numbers reported by the Federal Reserve do.

[0]: https://www.unitedforalice.org/methodology

[1]: I recommend downloading the PDF here: https://www.unitedforalice.org/Attachments/Methodology/ALICE...

[1]: https://www.unitedforalice.org/essentials-index

▲ snowwrestler 2 hours ago | parent | prev | next [-]

U.S. tariffs created inflationary pressure that has so far been mostly absorbed by producers and retailers, but they can’t do that forever. In fact the Amazon CEO said a week ago that they will have to raise prices this year due to tariffs.

▲ TheOtherHobbes 11 hours ago | parent | prev [-]

It always takes 6 to 12 months for the graphs to match the reality on the ground. Because that's how long it takes most people to run out of money and credit.

▲ kindatrue 12 hours ago | parent | prev | next [-]

There were points in 2008 where there were bank runs.

https://www.latimes.com/archives/la-xpm-2008-jul-12-fi-indym...

https://www.theguardian.com/business/2009/oct/11/banking-cri...

Italy had to buy 3% of Parmigiano Reggiano production.

https://www.the-independent.com/news/world/europe/rome-stage...

▲ loeg 12 hours ago | parent | prev | next [-]

2008 was a lot worse.

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int_19h 3 hours ago | parent | next [-]

Once the dust settled, sure.

We're still on our way to hit the bottom for this round, and by all accounts it's likely to be much bigger when we finally do.

	▲	loeg 2 hours ago \| parent [-]
		If you say so.

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cmrdporcupine 12 hours ago | parent | prev [-]

2008 didn't really impact tech sector much though. Companies continued to hire through it, and in fact those that didn't often had a headcount deficit afterwards.

And also the worst of 2008 was confined to the US.

What we have now is more like 2001.

Also most of these big companies were completely dysfunctional on their hiring through 21/22, just going completely apeshit. Now they're making everyone suffer for it.

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loeg 5 hours ago | parent [-]

Much less severe than 2001, where tech lost 250,000 jobs peak to trough (~18.5% from 2001 to 2003). Current downturn from peak (2022) is about 80,000 jobs (~3.2%). The timeframe for this period is longer and the magnitude is much lower.

https://fred.stlouisfed.org/series/CES6054150001

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cmrdporcupine 3 hours ago | parent [-]

Interesting. I guess I'm surprised, because having lived through both, this somehow feels worse.

	▲	acdha 2 hours ago \| parent [-]
		In 2001, there were a ton of non-dotcom jobs where big companies, non-profits, governments, etc. wanted to move online for the real benefits it offered but had struggled to lure people away from bubble money. The people I knew who were laid off got jobs pretty quickly once they were looking outside of SF startups—not always the same money, but sometimes better and never much worse, and still building relevant career experience. The market is mature now, and most sectors of the economy are getting hammered at the same time: tariffs have most industries cautious about new commitments if they aren’t already cutting, academia is reeling from grants being rescinded, large chunks of federal spending are gone or frozen, and state/local governments are getting less federal funding at the same time everything else is affecting tax revenue and increasing demand for social services. With so much uncertainty affecting the entire economy, you hear from people who have hundreds of interviews because even established companies in stable industries are unsure what tomorrow will look like after the next whim of an unstable octogenarian.

▲ bdamm 12 hours ago | parent | prev | next [-]

2008/09 was the worst this xennial ever saw so I think you're as qualified as most of us.

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hajile 12 hours ago | parent [-]

Everyone was trying to pretend the bottom of the market back in 2007 right up until they couldn't keep up the farce and everything collapsed.

I believe that's what we have today. The economic indicators are all worse than they were in 2008. Our economy is Wile E Coyote running at full speed in midair until he realizes the truth then falls.

	▲	JohnnyMarcone 8 hours ago \| parent [-]
		The fed was taking action by increasing rates up until the housing market collapsed, so at least some were taking the issues seriously. I don't have the full context of what the thinking was back then since I was in highschool.

▲ paxys 12 hours ago | parent | prev | next [-]

By what metrics?

▲ jeffbee 12 hours ago | parent | prev [-]

Yeah, that's one perspective :-) Objectively, the global labor market is the hottest it has been in modern history.

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loeg 12 hours ago | parent | next [-]

Well. Maybe not quite as hot as 2022. But by any standard from a year before 2020, yeah.

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eli_gottlieb 12 hours ago | parent | prev [-]

Which is why governments and firms in the capitalist core are trying to cool it down?

	▲	jeffbee 12 hours ago \| parent [-]
		There is a case to be made that wage spirals are bad, actually.

▲ ceejayoz 13 hours ago | parent | prev | next [-]

> I could never understand how all these companies could hire so many people for so much money, only to have them work on later-to-be-cannes open source projects.

Given how much of these companies runs on such projects, it really shouldn't be surprising. It's a numbers game for them; Facebook doesn't mind if 300 little OSS initiatives fail if it gets them React.

▲ pibaker 10 hours ago | parent | prev | next [-]

It is an open secret among the ownership class that the labor market got too good for the workers around 2021-2022 especially for tech. What you are seeing now is a possibly colluded squeeze on tech employment to keep the workers on their toes and stay docile and servile.

▲ culi 13 hours ago | parent | prev | next [-]

> Companies hire people to make money, not as an act of social conformance.

I think you also underestimate how much hiring gives these large companies political leverage. A town can be completely destroyed when one of these companies threatens to move a factory or office

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rich_sasha 11 hours ago | parent | next [-]

Right - true.

So hiring people is ditching this political leverage. If that was the original driver, what's changes to make it not worth it anymore?

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DiggyJohnson 12 hours ago | parent | prev [-]

how does that relate to the comment you're replying to?

	▲	culi 12 hours ago \| parent [-]
		as a response to "Companies hire people to make money, not as an act of social conformance.". I've edited the comment to make it clear, thanks

▲ 11 hours ago | parent | prev | next [-]

[deleted]

▲ computerphage 13 hours ago | parent | prev | next [-]

Why isn't the AI story believable? It seems to me that AI is getting more and more productive

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mrwaffle 12 hours ago | parent | next [-]

Sure but the lower hanging fruit is mostly squeezed, so what else is driving the idea of _job replacement_ if the next branch up of the tree is 3-5 years out? I've seen very little to indicate beyond tooling empowering existing employees a major jump in productivity but nothing close to job replacement (for technical roles). Often times it's still accruing various forms of technical debt/other debts or complexities. Unless these are 1% of nontechnical roles it doesn't make much sense other than their own internal projection for this year in terms of the broader economy. Maybe because they have such a larger ship to turn that they need to actually plan 2-3 years out? I don't get it, I still see people hire technical writers on a daily basis, even. So what's getting cut there?

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bopbopbop7 13 hours ago | parent | prev | next [-]

Is there any quantitative evidence for AI increasing productivity? Other than AI influencer blog posts and pre-IPO marketing from AI companies?

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medvezhenok 12 hours ago | parent | next [-]

What exactly would that evidence look like, for you?

It definitely increases some types of productivity (Opus one-shot a visualization that would have likely taken me at least a day to write before, for work) - although I would have never written this visualization before LLMs (because the effort was not worth it). So I guess it's Jevons Paradox in action somewhat.

In order to observe the productivity increases you need a good scale where the productivity would really matter (the same way that when a benchmark is saturated, like the AIME, it stops telling us anything useful about model improvement)

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bwestergard 11 hours ago | parent | next [-]

"What exactly would that evidence look like, for you?"

https://fred.stlouisfed.org/series/MFPPBS https://fred.stlouisfed.org/series/OPHNFB

Productivity is by definition real output (usually inflation adjusted dollars) per unit of input. That could be per hour worked, or per representative unit of capital + labor mix.

I would accept an increase in the slope of either of these lines as evidence of a net productivity increase due to artificial intelligence (unless there were some other plausible cause of productivity growth speed up, which at present there is not).

	▲	no_wizard 10 hours ago \| parent [-]
		There are two sides to this that I see: First, I'd expect the trajectory of any new technology that purports to be the next big revolution in computing to follow a distribution pattern of that similar to the expansive use of desktop computing and productivity increases, such as the 1995-2005 period[0]. There has not been any indication of such an increase since 2022[1] or 2023[2]. Even the most generous estimation, which Anthropic itself estimated in 2025 the following >Extrapolating these estimates out suggests current-generation AI models could increase US labor productivity growth by 1.8% annually over the next decade[3] Which not only assumes the best case scenarios, but would fail to eclipse the height of the computer adoption in productivity gains over a similar period, 1995-2005 with around 2-2.5% annual gain. Second is cost. The actual cost of these tools is multiples more expensive than it was to adopt computing en masse, especially since 1995. So any increase in productivity they are having is not driving overall costs down relative to the gains, in large part because you aren't seeing any substantial YoY productivity growth after adopting these AI tools. Computing had a different trend, as not only did it get cheaper over time, the relative cost was outweighed by the YoY increase of productivity. [0]: https://www.cbo.gov/sites/default/files/110th-congress-2007-... [1]: First year where mass market LLM tools started to show up, particularly in the software field (in fact, GitHub Copilot launched in 2021, for instance) [2]: First year where ChatGPT 4 showed up and really blew up the awareness of LLMs [3]: https://www.anthropic.com/research/estimating-productivity-g...

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bopbopbop7 12 hours ago | parent | prev [-]

Well you would think if there is increased productivity there would be at least a couple studies, some clear artifacts, or increased quality of software being shipped.

Except all we have is "trust me bro, I'm 100x more productive" twitter/blog posts, blant pre-IPO AI company marketing disguised as blog posts, studies that show AI decreases productivity, increased outages, more CVEs, anecdotes without proof, and not a whole lot of shipping software.

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10 hours ago | parent | prev [-]

[deleted]

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chankstein38 12 hours ago | parent | prev | next [-]

If that's the case I feel like you couldn't actually be using them or paying attention. I'm a big proponent and use LLMs for code and hardware projects constantly but Gemini Pro and ChatGPT 5.2 are both probably the worst state we've seen. 6 months ago I was worried but at this point I have started finding other ways to find answers to things. Going back to the stone tablets of googling and looking at Stackoverflow or reddit.

I still use them but find that more of the time is spent arguing with it and correcting problems with it than actually getting any useful product.

	▲	moshegramovsky 6 hours ago \| parent [-]
		> I still use them but find that more of the time is spent arguing with it and correcting problems with it than actually getting any useful product. I feel the same. They're better at some things yes, but also worse at other things. And for me, they're worse at my really important use cases. I could spend a month typing prompts into Codex or AntiGravity and still be left holding the bag. Just yesterday I had a fresh prompt and Geminin bombed super hard on some basic work. Insisting the problem was X when it wasn't. I don't know. I was super bullish but now I'm feeling far from sold on it.

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miltonlost 12 hours ago | parent | prev [-]

Ai is definitely able to sling out more and more lines of code, yes. Whether those LOC are productive...?

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chankstein38 12 hours ago | parent [-]

Tomorrow's Calc app will have 30mil lines of code and 1000 npm dependencies!

	▲	chasd00 7 hours ago \| parent [-]
		and 2+2 will output 4 almost all the time.. just like a human would.

▲ paxys 11 hours ago | parent | prev | next [-]

The reason is the same as always - they want to cut costs and increase profits. And there are no laws in America that prevent them from indiscriminate firing.

▲ aprilthird2021 5 hours ago | parent | prev | next [-]

The US economy is struggling heavily. Population shrank for the first time in a long time that will reduce economic demand. The USD has gotten a lot weaker in the past few years. The regulatory environment is unpredictable and so risk being priced in is high. Every company is chasing scarcer and scarcer energy and chip resources. And then add on top irrational and constantly changing tariffs.

This causes companies to constantly review costs and look for ways to trim, which they're doing.

▲ antonvs 12 hours ago | parent | prev | next [-]

> Is it just the CEO Zeitgeist?

This is quite likely a big part of it. There's a lot of herd behavior in the financial markets. A few companies fire a bunch of people, stock price goes up, others follow suit.

Also, in many cases, this isn't something that anyone pays attention to on an ongoing basis, because very few execs have the mandate to do it at a large scale, and their attention is scarce. So in practice, it tends to be done at intervals, and doing it when other companies are also doing it gives cover.

▲ John23832 9 hours ago | parent | prev | next [-]

> TBH the "ZIRP overhiring" seems like the most likely real reason. I could never understand how all these companies could hire so many people for so much money, only to have them work on later-to-be-cannes open source projects.

The same way they hire so many people for so much money to work on AI projects and build datacenter which haven't produced actual revenue for any customers (corporate or otherwise). I'd rather light money on fire to employ people tbh.

I say this as someone who has the 200 dollar Claude sub.

▲ oblio 7 hours ago | parent | prev | next [-]

Your comment is wildly out of context.

This specific company is now the 5th most profitable company on the planet and its FOSS projects are pitiful and 99% fully self serving.

▲ rob74 13 hours ago | parent | prev | next [-]

...or 2 years ago they agreed that employees should return to the office for at least 3 days per week, of course only as a temporary measure before full RTO?

▲ JeremyNT 11 hours ago | parent | prev | next [-]

I agree this is the root cause, also a big reason for inflation are all these do-nothing white collar management/tech jobs subsidized by the post-pandemic money printer with fat paychecks burning holes in their pockets. Of course these companies tried to use the free money to grow when they could, now they want to fix the balance sheets. And AI is a great excuse, especially if you're in the business of selling AI products!

It's why Trump wants to turn the money printer back on, inflation be damned, because mass unemployment due to belt tightening would be politically even worse than inflation.

▲ themafia 8 hours ago | parent | prev [-]

The value of money halved in the past 5 years.

Salaries did not double in that same time.

That's why they're doing this. They can. Laissez-faire is the current regime of capitalism we live in.