> I can understand it if you have brought on a lot of fat and you want to lean out your team and need an excuse but outside of that rather narrow situation
This doesn't really seem to be a rather narrow situation. The tech companies were hiring like crazy for the past two years. Quick googling shows that DigitalOcean increased headcount by 31% last year.
And contrary to the popular opinion here, for me this does sound like the right move for the time. The logic, on the growing market, was "let's hire people now for 200k TC and give 50k raise after a year, because year later they'll be asking for 500k TC upfront". Now it's clear the salaries won't be going to the moon in the nearest future, so it makes sense to cut the fat.
This is a commonly overlooked point. Most of these companies doing layoffs will still have much larger employee counts than they did two years ago.
Hiring in 2021 and 2022 was really out of control at many companies. There was a feeling that companies had to keep even the underperforming engineers earning $200K TC because it was so hard to hire replacements. That has changed, so it makes sense to start cutting the employees who were hired into roles they couldn’t handle.
My company had layoffs late last year. It has only made things more efficient. We lost some good people, but there were too many people assigned to every project. Half of our time was spent dividing up work and coordinating across teams for things that should have been handled by a single team. There was just too much hiring in 2021 when money was cheap.
One other factor in all of this is how companies used debt to sail through the pandemic. They took out loans, and now the bills are coming due. If you can't grow revenues to match interest payments, you often have to cut OpEx, and that seems to be what some companies are doing.
Still sucks if you're on the receiving end, though.
Stating that these companies hired a lot last year as an explanation for doing layoffs this year sounds like a total non-sequitur to me. Nobody gets hired to just sit around and do nothing. They were hired because there was work to do. Have tech companies now decided that they're just... not going to do that work anymore?
In every good company there is always more work to do than workers, sometimes significantly so. Technical debt, features that may or may not be useful, features that are useful but deprioritized in favor of even more useful stuff.
So yes, they're just going to put some things in the backlog again, it's totally normal.
This doesn't really seem to be a rather narrow situation. The tech companies were hiring like crazy for the past two years. Quick googling shows that DigitalOcean increased headcount by 31% last year.
And contrary to the popular opinion here, for me this does sound like the right move for the time. The logic, on the growing market, was "let's hire people now for 200k TC and give 50k raise after a year, because year later they'll be asking for 500k TC upfront". Now it's clear the salaries won't be going to the moon in the nearest future, so it makes sense to cut the fat.