Why Tech Jobs Are Vaporizing

Nearly every major tech company has faced a series of cuts, even though most are making good profits. Most people have never seen such a breakthrough, so the real question is why did this happen? Is it fashion, fatigue, or something more trivial to blame? You can't avoid fashion by hanging out with it.

Because there is a logical overlap between many technology companies, especially those that collect user data and sell it to advertisers, each wants to cut costs to remain competitive in the eyes of shareholders. So you see companies investing 10% of their workforce—up to about 200,000 in technology—in people who are probably less productive.

But how did these people become relatively ineffective? Two ways: gradually and all at once.

During the pandemic, many tech companies have gone on a hiring spree, hoping we'll shift to a new way of working. Often these new hires receive inadequate training and guidance from distant superiors, and many never realize it. This is the step by step part.

Everything happened at once when we decided that the epidemic was over. Well, we weren't done yet, but as patients we were running out of patience - and had to get back to the office. We learned that working from anywhere is not what it was made for.

So while remote work is still an option, management wants to look at built housing in buildings that pay big bucks. If you don't stay long in the office, you are useless.

distributed

However, I saw a more secular explanation, and that's fine. Every great invention has several important components. The first is the visible element of creativity, and the second is what experts call diffusion.

Spreading new ideas in society is very expensive because many people have to do the work. The new transportation and communications networks of the 19th century required more people to lay railroads, lay cables, construct bridges, construct buildings, and open harbors for larger ships. This is a long list and only an example.

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The technological revolution of the 20th century also required massive infrastructure development. Of course, companies run the cables in their buildings, and other companies build computers, routers, server pools, and eventually the cloud infrastructure. But this construction is real and it took decades.

The most recent shifts have shown signs of spreading as the pandemic spreads, sending people back to their home offices. This industry has employed many people to support development. But halfway through, everyone said wait a minute. The current massive strike (linked to massive pensions) is partly a sign of massive indifference on the part of the government.

We don't deal with inventory systems, so additions don't necessarily cover all layoffs. Sellers can search for jobs that best fit their exit strategy, and we see the results.

Failure

It is an exact science as can be seen from the nice round numbers advertised by the sellers. Part of the thinking, of course, is for the company to see what will happen in the coming months, and a lot to think about failure.

However, there were economic downturns and failures.

The classic failure occurs when inventory builds up and companies must clear their inventory at a discount. Today, companies need fewer people to stock warehouses.

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But the tech world didn't see a classic recession. Many do things that are usually not saved; They are not objective; It's a service, so the problem is less demand, more production capacity means turning the knob

The reason is ancient, the company needs to reduce its production capacity. One way or another, many have come to the conclusion that at least their current infrastructure is being built as needed.

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Instead of growing en masse, many are discovering what it means to grow organically -- or crowdsource. For example, take a look at Facebook or Meta Parent.

Facebook started to weaken; Despite making a lot of money, strong user growth is high. In the United States, it may lose users over the age of 25. His new augmented reality product isn't impressing anyone who isn't named Zuckerberg.

As I mentioned a few weeks ago, Apple hasn't put out anything new in years. And now it's at the forefront of what some economists call rent-seeking, a movement in which companies try to make more money from existing investments (their data) than from new products.

Market saturation

In short, the global slowdown is a big problem for technology and business. No, technology is not going away; Now it is woven into the fabric of our lives. But it has reached a saturation point where it is facing severe commodity and price pressures, making real growth difficult.

Metalworking technology was in the same place as it is today. In the 19th century, many products were made from steel, including trains and steamships, but also modern high-rise buildings and new automobiles.

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We still use iron and we use it more than that. But now everyone makes iron. The market is flooded with manufactured goods, some of which are sold for less than the cost of production.

Also, other products such as aluminum, plastic and carbon fiber are either lighter and stronger or better suited for this purpose, so why not use them?

My two bits

I believe technology is moving in the same direction. It takes time, but recent AI innovations that write passable prose and produce odd but engaging images speed up the process.

There will be life after technology, just like there will be life after the ironclads and mail and the 19th century. It's important to note that there is still a lot of tech work to be done, so don't panic. However, the latest round of layoffs is a cautionary tale.

What else can we do with our technological know-how? Let's all ask ourselves this question.

Dennis Pombriant is a leading CRM industry analyst, strategist, author, and speaker. His new book , Customer Loyalty You Can't Buy, You Can Earn, is now available on Amazon. His 2015 book The Customer Solution is also available there. Denis e-mail.

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