The Layoff Lollapalooza

We tend to frame these layoff discussions around “what’s happening in tech,” because that seems to be the only thing that people who “do business journalism” for a living understand. Here’s Axios talking about tech layoffs , and here’s Yahoo focusing on Meta and Salesforce. (Maybe a tad ironic that Yahoo is writing detailed articles about layoffs.)

If you get beyond the deification of tech companies , it all does make some sense: tech companies have been seen for about 15 years now as places with big salaries and relatively continuous growth. We mostly ignore the fact that a lot of that growth came with horrible societal repercussions (not all tech, but platform tech) and we also conveniently ignore that a lot of the investor boom in tech came when money was essentially free in terms of interest rates. We can gloss all that over though. It makes sense why we fascinate ourselves with tech.

In reality, though, drive to the Charlotte Airport tomorrow and I bet there’s some small tile company on the feeder road, and they’ve probably had to lay off 10–12 people. And those layoffs mean a lot more in the grand scheme of life than some Meta account manager, who will probably land on their feet and quite possibly has an undergraduate degree from Dartmouth or some bolded name place. The repercussions are starker further down the economic ladder, but again, we conveniently ignore this a lot, unless we’re quoting Raj Chetty research at a cocktail party.

What is a bit distressing about all the current Elon fascination, though, is that if Twitter is successful — and that admittedly seems like a very big “if” right now — but if it happens, it will have happened with headcount going from seemingly 7,500 to maybe 500. If investors are getting returns at that level, they will be happy — and those same investors, who probably invest in other companies, will start whispering to other CEOs and founders that fat needs to be trimmed at their spots.

I think we all generally understand that bureaucracy is not productive , many companies have tremendous bloat, you can find hundreds of people in a big company who do nothing all day, and middle managers probably rob the global economy of multiple trillions of dollars per year.

All that is true, and less bloat would be nice.

However, so many first-world nations are set up around:

• Consumer Behavior, i.e. people buying stuff
• Taxation, i.e. the government hitting you up for money to “fix the roads”

If less and less people have access to higher-paying jobs, those two bullet points begin to fray.

We were already seeing the very beginnings of this trend with automation + greed’s intersection and automation + fertility’s intersection.

Less good jobs = less consumers.

Less people = less consumers and less of a tax base.

Less consumers and less of a tax base = we need to shift some models.

We need to shift some models = we’re not good at this and it typically becomes an ideological brawl.

Most people don’t think about this stuff and their only focus is their job (does it exist?), their family unit (are they happy/healthy?), their community (if they even belong to one), their ability to earn and save money (is that still happening?), and their notions of relevance and success.

But, writ large, it seems like we’re cannonballing towards a new model of … something.

Takes?