It’s not that we’re not making profit, it’s that we’re not making ENOUGH profit.
A.K.A Capitalism.
This. I’ll be the last one to defend any of these megacorps but folks calling it greed are being reductive. These are publicly traded companies which means their loyalty is to their shareholders and their #1 goal is to make them more money than they made them last quarter. So it’s more than greed, it’s their job within this capitalist system. They have to do that every quarter for as long as they exist. The only ways to do it are to increase revenue or decrease costs. If they can’t make enough money they have to fire people. That’s the world we’ve built.
But it’s not only about making more profit than last quarter, but also the amount the profits increased by has to be higher than the amount they increased by the quarter before last. That’s how you end up with companies seeing record profits and still laying people off. They made more than last quarter, but only 2% more. The quarter before they made 3% more so now people have to go. It’s insane.
It will never be enough…
pure corporate greed.
i think its the stock market. it creates this false reality where things need to keep climbing.
if you have a company where everyone gets paid, and the customer is very satisfied and you have no profit you are somehow a complete failure. because we all just cant be.
the stock market is humanities downfall… human greed distilled, authorized and removed from all responsibility.
There’s some off-base comments here that ignore why the industry is being hit particularly hard. Note that when it comes to companies like Microsoft, you’re right it’s pure greed. They don’t need to shed those jobs, but that will make shareholders money, so bye-bye livelihood. Fuck Microsoft in particular on this round of layoffs, money for a 65 billion purchase but nothing else, pricks.
But for most of the job losses, it really comes down to high interest rates. High interest rates disincentivizes investing. And the past decade or so has been highly investment based.
A lot of the traditional big publishers like EA and Activision went entirely in-house, so any studio outside of those big ones needed to find funding somewhere. They turned to investment companies.
This works whilst investing is cheap, but when it’s hard to come by, suddenly you have to make payroll and can’t. This is why Embracer has failed, for example.
Why were people laid off by Microsoft? Were they redundant after the acquisition? Were they part of departments that were cut? Like 90% of acquisitions lead to layoffs.
But Microsoft told the FTC they specifically were not gonna do that after the merger, which is why the FTC is angry at them. https://www.polygon.com/24065269/ftc-microsoft-activision-deal-layoffs-appeal
Very true, and Microsoft in particular could have just shouldered the cost of those employees and likely found more work for a lot of them. Some of what I’ve heard from Jeff Grubb in the past week or two is that ABK expanded by 3000 employees in the past two years while interest rates were cheap, so it was unlikely they did so sustainably; and hundreds of those who were laid off were basically the entirety of Microsoft’s physical distribution department, which we’ll probably hear in this upcoming business update no longer exists for Xbox going forward.
Plenty of profit to go around. The issue is shareholders expect infinite growth, which is impossible.
Capitalism (when it works best) basically requires occasional market crashes that can “reset” the wealth distribution. But for obvious reasons, nobody wants that.
So every year, shareholders get richer and expect bigger growth next year, but eventually the profits will plateau. And one can only guess what happens then.
When the profits plateau, you look for the next thing the market wants. Sometimes those bets are right, and sometimes they’re wrong. In the meantime, people were paid salaries out of investors’ pockets while they worked on providing the next potential answer. That’s what happened here.
I had a shower thought this morning:
At a certain point in capitalism, a wealthy person can get enough money to live comfortably the rest of your life. If you decide to continue to grow your wealth from there, you’re essentially not just making money for yourself, but so others can’t have it.
I have a feeling that number is well below a billion, but I’m no economist.
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if they have to do that to enough people we would have inequality solved
There was a study from 2010 that said that the happiness already plateaus somewhere around 75k annually. But more recent studies suggest that for some people, more money means more happiness well beyond that, and for some it doesn’t. Basically, if you’re generall an unhappy person, money doesn’t help much. https://penntoday.upenn.edu/news/does-more-money-correlate-greater-happiness-Penn-Princeton-research
But I agree that owning more than 1 billion (or even 100 million) is just useless hoarding, since no one can spend that much money in a lifetime (at least without decadent spending for spending’s sake).
But you miss that having the money isn’t necessarily the point they have power and control over resources people and machines as well as influence in government
I would argue that all those things are even more likely to not make you happy.
Unless you already have a tendency towards psychopathic behaviors, the they probably
(not a psychologist)
Also not a psychologist, but attended a four hour lecture on psychopaths recently (out of interest). I don’t think happiness as a concept exists for actual psychopaths, because they don’t really feel emotions the same way.
Nearly all social animals would be punished in some way for hoarding resources from the group. Between loss of social status all the way to being killed. Our closest relatives like apes straight up murder individuals that do this.
It’s a mental illness. We’ll probably find out it was caused by lead or micro plastics if our species survives this time.
For now. I believe the correct call to action involves guillotines. We can dial it back if things get better.
It’s to keep score.
It’s super gross.
Also power.
If you decide to continue to grow your wealth from there, you’re essentially not just making money for yourself, but so others can’t have it.
This is a zero-sum fallacy. The size of the economy isn’t fixed. It continues to grow each year. The hyper productive people you’re referring to are disproportionately responsible for that growth, and they are disproportionately the recipients of that growth. My father was one of those people. Working 18 hours every day for 30 years. It led to a divorce and our family falling apart, but fuck did he generate a lot of economic value for the world, his company, and himself. He didn’t steal it from you. He created it.
I’m sorry your dad cared more about money than family, that must have been really hard on all of you.
Thanks man, it did suck :( We still have a strained relationship many years later.
While true, the growth of the economy has been wildly outpaced by the rate of hoarding at the top. After all that extra work, how much better off was your dad after everyone above him benefitted?
I agree that the distribution should be adjusted.
Line need go up more
Where u get MBA?
You don’t need an MBA to know that the goal of a large business is to deliver profit to its investors and that this can be accomplished by cutting costs.
The line went up but not as high as expected so now Riot games owner of the most popular videogame League of Legends need to fire 500 people.
…because capitalism.
Might sound like a bit of a conspiracy theorist here, but if all of the big tech companies lay off people at the same time, why could they not hire their recently laid off competitors for a fraction of the cost?
Obviously it drives down the cost of the salaries and lowers the average hiring rate. Huge wins for all these massive companies.
And to prove that they all did this “together” when they all did it a few weeks apart will be rather difficult too.
Maybe that’s just me thinking from both corporations and employees side at the same time, though…
Why would it? I usually get a pay raise when I get a new job.
What’s actually going on is they’re massaging the numbers a bit to get investors to invest more. Salaries aren’t the concern here, it’s just a game of staying on the investing trends to get the most investor capital they can. Employees are just caught in the crossfire.
Have you done this from a position of not having a job in tech though? Having thousands of other employees also vie-ing for that same position with equivalent experience or better?
If you have obligations any job is better than no job from a position of no job, no pay.
Yup. I lost my job at the start of COVID in tech and found a new one with a better salary. I had a house, wife and kids, and I was the sole bread winner. It took several months, but I had cash reserves and found a good position at a good company (I was a bit picky).
I wasn’t part of a huge layoff, but a lot of people were looking for jobs at the same time due to shifting markets. My old company was downsizing due to market shifts, and the new company was expanding due to unrelated, company-specific reasons.
As another poster said, those of us in tech generally get a significant pay bump, significant. Hell, that goes for most people with skills and experience.
I’ve preached before on here, move on, keep moving on.
That’s illegal.
Because they would like to be the $360bn games industry.
Capitalism.
Greed
Same reason as every other tech company
Greed.
