Ben Scharfstein
@scharf
I don't think big tech layoffs are because the companies got bloated, it's because rates went up. If the ROI (including opportunity cost of capital) on a marginal hire is positive they should be hired. As rates increase the opportunity cost of capital increases so this calculation changes.
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christopher
@christopher
Good analysis. It does seem like backwards logic, though: companies should be spending to accumulate talent during the bad times to heavily reinvest back into the product; consequently, they should spend free dollars for marketing the product during the good times.
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Sam Jain
@sambhavjaineth
What do you think @scharf about cutting down salaries by x% instead of laying off x% workforce which will achieve the same economic savings but arguably higher net productivity?
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Tyler
@tylerbenmark
anecdotally, i found google becoming bloated by the time I left two years ago after a 5 year stint there. (still love the company)
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Nico.cast🐱
@n
What do you think of Elon's approach?
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Nat Emodi
@emodi
do you think any big tech co approached and measured hiring this way?
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Alex Miller
@alexlmiller
Right, both are true. Companies bloated themselves by making “luxury” hires in a time of cheap money (both investment and customer dollars) Now that customers and investors are spending less, a lot of those folks look unnecessary at best, and like a drag on performance at worst.
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