The strangest part to me about the current trends: why do all these business leaders all do the same things at the same time? E.g. Layoffs + micromanagement + cost focus etc... Is this truly about macroeconomic forces that every business is responding to? Or is it just following the latest fad?
There seems to be significant opportunity to zig as others zag. Imagine the Intel letter saying "we are going to take advantage of the current hiring environment to scoop up talent, and push forward on initiatives."
> why do all these business leaders all do the same things at the same time? E.g. Layoffs + micromanagement + cost focus etc... Is this truly about macroeconomic forces that every business is responding to? Or is it just following the latest fad?
I thought about this a lot over the years.
I saw something that piqued my interest last year though, and kind've helped connect the dots. I was on a cruise, and most of the ship was available to guests. One day, one room was cordoned off to an invite-only meeting. The windows weren't blocked, but on the screen was a presentation about AI investments, number of jobs saved (reduced), and etc.
I found one of the attendants later during the voyage and chatted her up. She was head of HR in some big company, and the meeting was supposed to be private. But it contained a lot more than just spreadsheets about AI investments. There was homework and whatnot, but the attendees weren't all from a single company. It was "direction setting". I don't think it was Intel (topic under discussion) but certainly some loosely related tech industry.
I'm convinced that it was nothing less than business collusion.
So, back to your question:
> why do all these business leaders all do the same things at the same time?
> I'm convinced that it was nothing less than business collusion.
Are you sure you didn't just see a sales meeting?
If you're a farmer in the market for a $200k combine harvester, sales guys will be happy to put you in a $200-a-night hotel so you can attend their invite-only presentation on how their latest models give you 10% more yield with 30% lower labour cost thanks to the new auto-steer mechanism and six-stage threshing mechanism. And they'll hand-hold you through all the calculations to write a business case.
>Are you sure you didn't just see a sales meeting?
Considering how much the sales division of many medium and large companies dictates the direction of the whole company, "sales meeting" and "business collusion" is often the same thing.
I've worked for FAR too many companies that have lost $60million in support and maintenance on a sub-par product that sales managed to sell for $30million gross... and then the sales division (and upper management) leave the company for something better. What a surprise.
Now I'm trying to remember what that tech company (I think pretty small, startup-sized ish but large enough that they would normally have at least one person in sales) that just straight up decided not to have a sales department was
A "sales meeting", intended in a loose sense, can cause involuntary and/or uncoordinated pseudo-collusion because it aligns various parties: a level playing field of information (e.g. convincing important managers of many companies that their strategy needs more AI and less actual experts) leads to similar forecasts and similar decisions.
used to be a sales engineer at an ISP. one you've heard of. we had account execs straight up offer "referral agent fees" to the network managers we were selling to.
bandwith is mostly the same -- 10Gbps here is more or less 10Gbps elsewhere -- so you gotta set yourself apart. and it worked. constantly.
It is, but cui bono. I know that local software companies in my city had meetings coordinating the local software dev wage level. There's no reason to assume something like this isn't going on at a larger scale too.
Nonsense. There's nothing generally illegal about vendor sponsored junkets for private industry attendees. Some companies have policies against their own employees attending such events but that's not a legal issue.
Here's an alternative take, but along similar lines. Many high level business leaders in large established companies loathe taking risks and sticking their necks out. Instead, they hire a management consulting company (think McKinsey) who do a study and make recommendations that said executive can take to the other execs, or to the board. If it works, executive takes credit. If not, it was those darn consultants. The thing is, the consultants are giving companies the same advice. In fact, it is even stronger when "competitor A and B" are already doing "strategy C" and they are ahead of you. I've seen this movie many times...
The Capital Order lays out an argument that austerity measures are ultimately labor suppression, not necessary. Of course, that’s true of many pieces of policy wisdom: they start from an assumed good. In this case, the assumed good is the current winners should remain the winners despite, well, losing.
I agree that this definitely is labor suppression, but it has a real cause: the end of low interest rates and inflation. They can no longer "grow" their way into their 6 month bonuses, so they basically have to trim fat and if they all collude on doing it, it _can_ work. If they dont all collude, someone gets cheap engine for growth.
That real world activity is my underlying belief, but we shouldnt ignore that the free money era ended quickly and for these execs do continue to earn their ungainly bonuses, they have to cut costs. Modern texhnology/capitalism allows them to make the same choices without directing collusion.
Best example is the rental market and the landlords all using the same price setting "algorithm"
High interest rates benefit creditors and hurt debtors. These companies hold a lot of cash equivalent assets (think bonds, etc). Their balance sheets only grew. High interest rates haven't hurt these companies, but instead fattened them up. They are hoarding cash! Imagine earning high interest on that cash.
Either the tax treatment has an effect or it doesn't. If the market doesn't get better we can at the very least say that the whole tax thing was overstated.
I can’t imagine anyone colluding with LBT, unless they told him it was collusion to fool him, and he fell for it.
Doing more with less is warning sign like “curve ahead”.
And the agentic focus is not forward-thinking.
Our present is to a small degree agentic, and that will increase, but that won’t sustain because (1) latency and (2) technological evolution.
It’s more likely that everyone will have their own AI on-board which will have all of the data it needs in local storage that gets regular updates. Evolving to current agentic flows won’t help with that type of processing.
Given the whole Realpage stuff for price fixing, it would not surprise me if there are similar things going on at the csuite layer with various business consultants and backroom discussions. They're all rich assholes, and naturally gravitate to the same venues.
It's all the more reason why labor needs to start being more aggressive and properly work together.
There is no "Realpage stuff for price fixing" that resulted in any price fixing.
That is, it's true that they tried to do it and the software exists. But it doesn't matter, because nobody is actually motivated to join the cartel (defecting is more profitable) and they have no enforcement for it.
im not sure what context youre replying in, but plenty of building managers joined the real page cartel, and successfully raise prices across the board.
That's demand going up with fixed supply because the US made it illegal to build anything. In a market where supply goes up instead (Austin or Minneapolis) their algorithm is going to tell them to lower prices instead.
The claim is that by not renting out some of your properties you can raise rent on the rest. But the way you make money from properties is by renting them, so if everyone else is refusing to do it then you get the rents from anyone who shows up.
That and if you don't rent out a property for long and leave it unused, it'll literally rot because nobody is there to notice squatters or water leaks or etc.
You never have to let any properties rot, you intentionally delay filling them to achieve the desired number of vacancies at any given time. And yes in principle competition is king but in practice it's for suckers.
Management consulting is a big one. It's illegal for companies to all tell each other their prices and costs. What isn't illegal? Apparently each firm hiring McKinsey who will tell you what your competitors costs and prices are because they have "industry knowledge". They'll then share your information too and then everyone can largely figure out how they can set prices above their marginal costs with some nice padding. It's probably still illegal, but it's what these firms do.
> Wonder if it’s “not illegal” if it’s done in international waters.
I didn't ask. As I understand it, it's less about legality and more about plausible deniability; on a "party boat" with plenty of other public people to make it cheaper than renting a whole boat, plus the week for the cruise and time to relax -- seems plausible that these people "just happened" to book the same boat at the same time at peak tourist season and decide to throw a "private party". I should have asked more questions, but there were plenty of other people to chat up.
No, because jurisdiction of the competition authority will still be based on the market activity (or place of registration etc.) of the companies colluding, not on the physical location of the colluding/anti-competitive activity itself.
While such conspirative theatre may decrease the risks of discovery, collusions usually come to light by one participant notifying the authority in exchange for immunity or decreased fines.
As someone else said, it was probably a sales meeting or other corporate training. You’re off in conspiracy theory land.
No conspiracy theories are needed. Boards are incestious, most board members aren’t all that bright or forward looking, they have a lot of imposter syndrome about it, they worry about getting important trends wrong, and so they follow the herd. CEOs follow the board, companies follow the CEO, voila, everybody does the same thing at the same time.
And yes, I think there is an opportunity to zig while everyone else is zagging.
Also: major institutional investors (such as VCs) demand a seat on the board and then send their B team to actually sit through the board meetings of their less key investments. Those board members follow the investor company’s line, spreading it to lots of companies at once.
Yes, it's most likely they saw some kind of sales meeting, but collusion also happens often. I watched a documentary not long ago about how smart they are about it now. For groceries the major chains just all report each product's price to the same company which then tells them how much they can mark up their products without being undercut. Is it illegal, almost assuredly yes. Is there anybody enforcing this anymore? No.
Lol. When I was a kid I worked at a gas station. My job was to arrive before the station opemed, drive around the neighborhood, and make a note of the gas price at our competitors.
We then informed corporate of the numbers, and someone would quickly is how to price the gas that day.
I thought it was about keeping the price competitive. No, I was told, it’s the exact opposite.
We would gladly sell the gas at cost, if not less, because the real money came from coffee and other merch.
But the state had a minimum mark up law. We had to charge the customers more.
The idea was to protect small gas stations from corporate chains, but gas is a commodity. Everyone pays about the same.
I later found out that the reason I was reason I was recording the competitors prices was to make sure they were following the minimum markup laws, so we could sue them if they werent.
They were probably having you do this so that they could price the gas as high as possible while still in line with the neighborhood going price. Why sell at 200 while the best next price nearby is 260? Sell at 250.
> They were worried about suing and being sued. In the place and time, gas stations simply did not make money off gas.
> They made money by selling coffee, which costs less than a cent, for five bucks.
True. That's no reason to "leave money on the table" as they may have seen it, and being substantially cheaper than the alternative, when they could have been barely cheaper and attracting the same amount of people.
Or at least save such remark for when somebody actually makes the statement. Don't just assume that people on this forum are too stupid to understand the difference.
The capitalist class has always conspired to keep labor down.
Meanwhile, a lot of laborers in our profession have fallen for their propaganda of markets and so-called meritocracy, not realizing they have more in common with the fruit picker than their common exploiter.
Class warfare is real. It's time tech workers wake up to that fact and start fighting back instead of letting oligarchs walk over them.
I’d say this applies to a far broader group; I’ll never forget when a professor asked for a show of hands on the first day of class: “how many of you will have more than 10 million?”
More than half raised their hands immediately. It was a Philosophy 101 class.
$10 million sounds like peanuts in an information environment where discussion is dominated by talk of billionnaires. When I was growing up, I remember Bill Gates and Warren Buffett's wealth being touted as a measly $40 billion or something. Today the numbers tossed around for Bezos, Musk etc are minds numbingly massive, 200 to 300 billion.
Meanwhile most people in "rich" countries will have to reach mid-career status to even reach $100k.
Unions are counterweight for HR. You want coops to get at least some pooled capital. Otherwise you need investors or debt and end up in the same place you started.
Business leaders operate in overlapping networks. Conferences, advisory boards, private equity connections, etc. When McKinsey or Bain gives similar advice to 50 companies, you get synchronized behavior that looks coordinated.
Labor categorization can be thought of in a more useful framework --
Category 1: Builders who don't know it yet. These people have the cognitive capability, work ethic, and problem-solving skills to create value independently, but they've been socialized to believe employment is the only viable path, or have yet to take the leap of starting "their own thing". They're retained and developed because they're essentially entrepreneurs who haven't discovered their own agency yet.
Category 2: Consumers masquerading as producers. They extract more value than they create - through entitlement, minimal effort, or misaligned incentives. They're often the loudest about "worker rights" precisely because they have the most to lose from merit-based evaluation.
The pattern you're seeing (layoffs + micromanagement + cost focus) targets Category 2 while trying to retain Category 1. The economy can no longer subsidize low-value labor.
The interesting dynamic: Category 2 workers are often most vocal about collective action because individual performance evaluation threatens their position. Category 1 workers are more likely to focus on skill development and value creation, and frankly are the most to benefit from the evolution of AI tooling.
"Labor solidarity" messaging often fails to resonate with the most effective and productive workers.
> The interesting dynamic: Category 2 workers are often most vocal about collective action because individual performance evaluation threatens their position. Category 1 workers are more likely to focus on skill development and value creation, and frankly are the most to benefit from the evolution of AI tooling.
> "Labor solidarity" messaging often fails to resonate with the most effective and productive workers.
That's what the rentier class wants you to think. It's convenient if everyone is a temporarily embarrassed CEO, makes them much happier to act against their own class interests.
The "rentier class" framing assumes all value extraction happens at the top, but /r/overemployed will demonstrate that is false.
Low-performers extract value from high-performers at every organizational level. A developer carrying three mediocre teammates isn't being manipulated by "the rentier class" when they prefer merit-based evaluation.
Your argument requires believing that productive workers can't accurately assess their own interests.
> A developer carrying three mediocre teammates isn't being manipulated by "the rentier class" when they prefer merit-based evaluation.
What happens when they get their wish? Do they start getting paid something close to the combined salary of the team they were carrying? Or do they get an attaboy and a pizza, and a precedent for "merit-based" layoffs that will be turned against them soon enough? I know which way I've seen it play out.
> Your argument requires believing that productive workers can't accurately assess their own interests.
Is it so implausible that people skilled in a specific field might be bad at cooperating (perhaps because they're bad at communicating with each other, at least relative to another class) and politically naive? If you think workers have a good understanding of their own interests then why has the labour share of income kept dropping?
> The economy can no longer subsidize low-value labor
Every year we get wealthier and wealthier as a society, so that means we are capable of less and labor has to take the haircut while capital keeps on as is.
We could subsidize 10s of thousands to hundreds of thousands of people to do literally nothing and not be any worse off than we were 15 years ago
Intel’s situation in 2025 is not comparable to the rest of big tech. They have lost technical leadership, bled market share, and started losing a ton of money in a hugely capital-intensive business. They are actually in need of major triage to survive, not just hopping on a belt-tightening trend among still-massively-profitable software companies.
One would hope HN commenters would be able to comprehend a microchip seller not having compelling products to sell means it needs to shrink its business, rather than jump to childish “CEO bad guy” sentiments.
Shrinking the business is a hard decision to reverse, and one should definitely read into the word "needs" from "needs to shrink" before doing it. People tend to take any claim that a gigantic company "needs" to downsize with a gigantic grain of salt, because we were born with pattern recognition.
The business had already shrunk 10+ years ago when it was evident mobile devices were the future and Intel had no product offering for them.
It was do or die a decade or two ago to catch up in that market, but they didn’t bother paying sufficient salaries and focusing on the growing markets, so here they are.
> On June 27, 2006, the sale of Intel's XScale PXA mobile processor assets was announced. Intel agreed to sell the XScale PXA business to Marvell Technology Group for an estimated $600 million in cash and the assumption of unspecified liabilities. The move was intended to permit Intel to focus its resources on its core x86 and server businesses.
So they got out of the world’s biggest new market 1 year before iphone came out.
> 2007 - Apple launches the iPhone, helping kick off a mobile phone boom that Intel mostly missed. Under CEO Paul Otellini, Intel turned down a deal to make iPhone processors because it did not stand to profit enough from the arrangement. Instead, Apple used chips based on designs from Arm Holdings , whose tech now dominates the mobile market.
The leaders from 20 years ago made the bed that Intel now has to sleep in.
This is just one example. No one is making the argument that Intel would not be failing now had they retained XScale.
Intel has one trick (x86 and a process lead) and actively sabotages all other endeavors. Oh there other trick, because they streamlined certain aspects of production, is that they have a SKU explosion.
It's almost as if CEOs aren't really that smart or creative, got to their position through mostly politics, and look externally for clues about what to do.
CEOs like to brag about how AI is going to replace skilled workers. Yet, it should be obvious to anyone having experience in LLMs that top executives are the jobs that are most likely replaceable by AI.
Just keep smooth talking everyone into cost reductions and make arbitrary decisions to make it feel like you're actually in charge.
They make that claim because what CEOs write down could easily be written by a Markov Model, nevermind an LLM. If that was the primary value a CEO brought to the company they'd be right.
The most important thing a CEO brings is relationships. LLMs can't do that (yet).
Post script: there's still a chance that LLMs replace CEOs due to LLMs being easier for the board to influence/control.
because 95% of the time it's "follow the herd" BS + always defer to the lowest cost. the rest is schmoozing, making people feel comfortable, sounding confident, and working the soft skills.
chatGPT always sounds confident, and it's not hard for it to calculate the lowest possible option and take it.
Wouldn't that be funny to see an AI bot replace the CEO of something like Boeing, and then see the company turn around in positive moves? Feed an LLM all of the business data that a CEO would have and then ask it to make the same decisions the CEO would be expected to make. Since layoffs would be the trend online for LLMs to train on, would they come up with slop that looks like they too follow the trends? If companies are willing to replace dev with AI, why are boards not looking at all of the C-suite offices with the same mindset?
Because the agonizing is part of their job. That's called "animal spirits" / managing expectations. The expectation of future interest rates is nearly as important as what they actually are.
Wallstreet would be screwed by this. You can't take away the gambling aspect and big wins because then you are left with a pre-80s style market where dividends and steady income matter over 'line goes up next quarter'. The current market would HATE that.
Many economists point out that the Fed's policies serve the 1% above all.
Heck you can get a Nobel Prize based on your Fed chairmanship, then tank the economy.
One pundit observes that the Fed is an example of "burn the village to save the village" as (rarely) an underemployed firefighter-turned-arsonist will do. Extreme perspective for sure.
In the era of Big Data, can't real-time data and policy co-exist?
It seems to me that a large percentage of jobs exist just to exist, and that they use their continued existence to justify their continued existence. I wonder how much the world would keep spinning if 90% of people were laid off. Maybe we'll find out if AI is adopted widely enough...
If data was reliable, instant, and comprehensive, this might work. Of course, under those circumstances socialism or communism would probably work out even better.
It is precisely because data comes out murkily, with a lag - and the effects of changes have a lag as well- that managing the Federal Reserve can't by reduced to a simple process. It is an art done by humans- one where 'general trust in the institution' is the single most important variable of the last 40 years.
Interest rates work with different lags in different parts of the economy. The current hiking cycle basically only just has taken its full effect (think when people refinance debt and when they delay this.)
I don't think this is entirely fair. One analogy I like is boat racing. In boat races if you follow someone you're almost always going to do just as well as them. Take a dfferent path and you could get lucky, but just as likley you're going to hit a bad current and throw the whole race. So you follow the crowd and wait for oppritunities to take the lead instead of rolling dices. I don't think they're nessesarily doing anything wrong just because they don't want to do something super aggresive.
The letter seemed contradictory: be a factory, but innovate on AI. Is AI actually smart? Human brains use the power of a dim incandescent light bulb, why does AI require so much power, that the processing chips overheat?
Sure, selected tasks can be done orders of magnitude faster, but do we, for example, really need that kind of output, like pi to a trillion digits? Or AI controlling stock market trading? How much liquidity is necessary for traders other than huge funds?
it helps to be able to type at 70wpm. My high school typing class in the 70s actually did wonders for my career as keyboards and screens took over. As far as processors go- that's a subject best discussed offline with a beer in hand.
Its merely a personality contest, a sociological phenomenon. Humans band around (and more easily listen to) individuals bearing certain personality traits. These traits have very little to do with actual problem solving, and finding the most ideal path forward for an organization. Alot of times they go hand and hand but I'd wager, from the CEOs ive personally met, there are alot of them with just the charismatic set.
That's what AI does. Makes power and politics have even more of a premium vs say learning, intelligence and hard work. Connections, wealth and power. It is almost ironic that our industry is inventing the thing that empowers the people that techies often find useless (as per the above comments) and dis-empowering themselves often shutting the door behind them.
Yes an AI will come up with more insight than many management people as many people state in this thread that a LLM can do their job. Its a mistake to assume that's what they are paid for however.
Because it's driven by investor/market sentiment. That's literally all. If your investors have ask you why you've not laid off 10% of your workforce due to AI efficiencies, when that's the prevailing sentiment, then you look incompetent. If in the middle of COVID the sentiment is remote work will drive more tech adoption/usage and money is very cheap then you have to start hiring as many engineers as possible otherwise you look like you're not a growth company or lack confidence. It doesn't matter if it doesn't increase your development cadence, that is not the point. The point is that "the market" is largely vibe based. Right now the vibe is AI companies are hot so as say the meta CEO you start burning a trillion dollars on GPUs, without anyone stopping to question why Facebook needs any more AI, or how it will make it ROI.
Remember that executives answer to the board of directors. The board's job is to make sure execs do things that make the company money, or in practical terms, "things the board thinks will make the company money".
A sensible, sober CEO would still need a lot of political capital to push back against a boardroom that's hounding them to jump on the latest hype train. You certainly won't get that from a CEO who just took that position a few months ago.
A sensible, sober boardroom that doesn't push their execs to jump on the hype train would need to answer to angry shareholders. It's almost certain that >50% will support the latest fad and would vote out a board that they perceive as being behind the times.
That's where startups and privately owned companies get their natural advantage of being able to go against the grain.
> There seems to be significant opportunity to zig as others zag. Imagine the Intel letter saying "we are going to take advantage of the current hiring environment to scoop up talent, and push forward on initiatives."
I've pitched that a couple times in my career. The difficulty is that, in a lot of cases, your future business prospects are genuinely correlated with the future prospects of other businesses.
Intel is going to sell fewer CPUs in the next 3 years if other businesses aren't hiring and expanding as quickly as they did during COVID. And I think there's a pretty good reason to think that Intel's revenues will actually shrink as a result.
That limits how much zig they can do while others zag.
> There seems to be significant opportunity to zig as others zag.
Historically Apple has done this - Steve Jobs noted at one point that the absolute last thing they were going to do during a recession was to cut R&D, because that was what was going to let them capitalize once the recession was over.
Left as an exercise for the reader is assessing Apple’s financial performance as relates to the rest of the industry, with extra credit for comparing that to the ongoing guidance from the finance industry set.
You only need to look at board membership overlap between all companies (all companies, not just tech)
You'll find the same names appearing over and over again.
The reason all companies seem to do the same thing at the same time is that their boards are all the same people giving the same order to all their companies' ceo's at the same time.
There are CEOs and there are CEOs. My hunch is, most of them are just managers pushed out by investors, who have interests in multiple companies, maybe even multiple industries. That’s why they coordinated so easily.
But there are CEOs who define an industry. Those are not easily swayed by big capital.
Competition. If all your competitors are doing something that you want to do but know will piss off your employees, you can safely do it too and know that they don't have anywhere else to go. Most of these big tech companies operate in markets with huge barriers to entry and very differentiated skillsets; a new competitor isn't going to spring up overnight without some form of warning.
Most hired executives play not to lose rather than playing to win; the nature of their compensation packages incentivizes it, where big wins accrue largely to diffuse shareholders while big losses mean they lose their fat executive pay package. It takes a founder-CEO to play to win, but if the hired CEO had that skillset and that inclination, they'd be a founder rather than a CEO.
Most of these businesses are feeling the same pressures and experiencing the same problems... in silence. Eventually one of their competitors breaks (because they are forced to due to economic realities, etc) and starts making necessary moves (layoffs, efficiency improvements, etc). The rest follow-suit, breathing a collective sigh of relief that they weren't the first to make all the headlines.
The reason is always a secret coalition with a cool hand sign like the Illuminati.
But speaking of combining forces, Microsoft will be more likely to pick them up in a fire sale now, which I think would be best for all involved. Then you’re a couple of M&As away with first Dell and then Oracle.
Then they will select a champion to fight the Pentavirate at The Meadows!!
It appears that Lip-Bu used an LLM to help write this memo. Also: 15% of staff with an arbitrary 50% management? Boy, he must have been up all night working on that one! Maybe everyone can have an ice cream social when they return- bring your own.
A video went viral a few years ago that showed that the majority of outstanding stock market shares are owned by big equity firms. And those firms, in turn, own large chunks of each other. And if you carry this recursion out a few iterations, the largest equity firm essentially owns everything.
It sounds cliche at this point. It is the focus on the next quarter, next year at best that drives a lot of this due to appeasing the great god of the shareholders.
I think they should do what you say but shareholders are looking for the quickest, best returns now, not in a few years time.
I tend to think all these business leaders are actually business larpers. They dress up as what they see other business people dressing up in, they lay off loads of people because they see other companies doing that, they send stupid letters like this out because they think that's what they're supposed to do while dressed up as a business leader. You get business larpers at every company, sometimes they happen to be good enough at the larping that people put them into actual leadership roles and then this sort of thing happens.
Is this truly about macroeconomic forces that every business is responding to? Or is it just following the latest fad?
Look at it like an economist, who sees everything as market, and the answer to both is: Yes. Fads are just market bubbles. Excess employees are sometimes an asset, regardless of their effectiveness. It gives value to the team manager and sometimes the company itself, and it prevents other companies from having access to those employees. It's not a very efficient tactic, so even a small amount of overemployment can be a bubble that quickly turns from an asset to a liability. What you end up with is employment bubbles at the trailing end of economic rises. They can collapse while the economy is still growing, just because the growth slowed down.
Just like any bubble bursting, that is the best time for any well-positioned company to invest in that market. The problem with Intel is that they are far from well positioned. AMD and nVidia each have about a quarter of the employees that Intel has and TSMC has about half. Intel over-invested in employment so the over-employment bubble bursting will hit them hard. Their best bet is to refocus their current employees, but they might not be the right mix, so they may need to have even larger layoffs, while simultaneously highering new employees in pertinent fields.
I have a recollection that Intel used to do this when Andy Grove was in charge. There was a fair amount of noise about them 'spending through the recession': building FABs and other plant so that when the recession ended they'd be in a great place to take advantage of the increased demand. Sadly, I can't recall exactly which depression this was about.
Looking at Andy Grove's wikpedia page it could be that the above reflects his focus on "strategic inflection points"
When the economy slows down, people and companies spend less. Less spending means fewer sales, which means less work and less money to pay staff. Since salaries are a big cost, companies cut jobs.
Before the downturn, spending was up, sales were up, and companies hired more people. Now they see they hired too many or inefficiently, so they cut headcount not only because demand is down, but also to fix those inefficiencies.
And about the argument of investing now to scoop up talent and push initiatives forward: downturns often come with higher interest rates. That makes it more expensive to raise money to invest. So why would companies do that now?
One theory that I saw earlier was that the industry is bloated, big tech companies executives knew that but they continued to hire anyway to make sure that the people they don't hire don't start competitors when there was funding, there is less funding now so that risk is no longer there so companies can reduce their size to their actual needs, but maybe that does not apply to intel since they seem to be really in a bad situation now.
All the layoffs and such have been going on for a bit and there's been more and more leading up to the end of the R&D tax credit. Their headcount has been planned for years.
AI was a wonderful scapegoat. If it wasn't AI it'd be the economy or some other excuse. No one wants to admit mismanagement and overspending, but of course a business is going to take advantage of a discount. It's just a shame that wasn't a discount on property or hardware, it was on people.
Some other smaller companies are swept up in this because they follow moves from the larger companies. Everyone is trying to copy the leader, right? Everyone is asking "what's that big successful company do? That's what we need to do." So you have this absolutely horrible job hiring process in tech too as a result of that. You have excess and toxicity because people are trying to make something work that doesn't make sense for their business.
What do you think the whole $100 million bonuses for these AI people (which so far have been rumors) is going to do? It'll cause idiots elsewhere to go overpay and over hire because of FOMO...and once again more layoffs in the future.
It's a herd mentality for both. AI may be the next big thing. And the old things need realignment.
So the "market" demands sacrifice basically and there is cover when everyone else is doing it. You can be contrarian but your stock may get punished. Intel may not have a good plan anyway. The reason the market demands sacrifice is likely because of predicted unfavorable economic headwinds (etc... so signs of recession or what not). These predictions could be wrong though. Companies do constantly realign though, product initiatives fail etc...
My personal theory is that it is ultimately the same reason you see things like software engineers blindly using the same tech stacks, because most people, most of the time, aren't working off first principles.
They're just trying to get the job done and copying your partner's homework can save time, even if your partner didn't get the right answer or also just copied their partner.
CEOs, on average, don't know what they're doing any more than anyone in most other professions. They just happen to be born part of the ruling class.
> why do all these business leaders all do the same things at the same time
It's like fashion, humans follow trends, almost always, and in the case of big companies, the CEOs are quite wealthy and that means the people they hangout with, the parties they attend, and the general circles they are part of, is pretty small (not that many people at that level of wealth), and so they're all mostly part of the same "clicks" that talk about and share the same ideas.
For counter argument sake, if a highly regarded company says: “we’re going in a hiring spree”, all of that available talent adds 50% to their comp ask.
Broadly speaking though, I think you’re experiencing confirmation bias to some degree. If you only look at companies that are on the struggle bus, then you only see a limited number of levers that management has (RIF, delay CapEx, etc). Other struggling companies that don’t take evasive maneuvers go out of business and we don’t hear the story.
Most CEOs follow trends so as to not get criticized and fired. It’s the same in American football. The “book” says you do certain things under certain circumstances- 4th down and 5, you punt. Everyone drafting linemen, you do too. If you zig and others zag you get criticized on ESPN (CNBC For CEOs) and if it doesn’t work you get fired. Better to have a few years of 8-8 performance than risk it for a 14-2 season.
I think there's a lot of "monkey see, monkey do" going on in the corporate world.
Also, shareholders and all that.
Intel doesn't have a meme-stock/vibe-stock thing going on at the moment (think Elon and getting to Mars by 2030, or robotaxis everywhere by the end of 2025 etc).
So I guess downsizing seems to be the only potential appeal for them right now.
I think if it's not a collusion then it's concentration of wealth. CEOs are basically employees to the board, and the board is or is representing pretty much the same people in most major companies.
American markets have largely consolidated into oligopolies, where just a handful of very large companies operate. It's extremely easy for them to wink at each other and then raise prices/layoff workers, etc.
These companies are members of WEF and owned by major investment funds. That's the likely source of these shenanigans. The rich just want to be richer and to hell with normal folks.
Cliché corporate leader herd mentality. In absence of leadership direction, do what everyone else is doing (and what the consultants recommend) including many rounds of layoffs and reorgs to simulate progress and achievement.
The problem is that multiple layoffs are terrible for morale and basically obliterate the motivation and mood of the remaining workers.
Reorgs are another common pattern of incompetent management that introduce chaos without bringing net positive value.
This is similar shit that happened in the '80's, '90's, and '00s and was captured culturally by Dilbert and Office Space.
Those who ignore the lessons of the past will make history rhyme once again.
Why does everyone hire McKinsey? So they keep their job. If you are CEO and go the board with a cost savings plan and layoffs you keep your job. You may not if you say we are going where the puck is. Lifestyle creep probably makes it very hard to envision taking this kind or risk.
eh it’s bc you’re never fired for making the same mistakes as everyone else
imagine this approach fails and you have to go to your board? They’re going to flat you alive and call you an idiot who should’ve done what everyone else was doing since it was obvious
but if you do what everyone else is doing? Well the macro changed obviously!
EDIT: I’ve worked at big tech companies where this was a meme, where the execs would do whatever meta/google did but six months later
As far as I can tell, the flow of cheap money stopped when inflation started. This means all their portfolios of free stocks inflating the market stopped. These people all live in a world of 6 months to profit, and thus the market forces at work mean for them to demonstrate anything for their next fleecing of shareholder value, they need to trim budgets.
Prior to this, they could just get low interest loans to do whatever financial engineering they wanted to demonstrate growth and get their bag. That is over, now the only way to get the bag is firing people.
So, it's not just that they're all in a capitalist polycule, but is is that they all just live in the same bubble of irrational short term reasoning.
"If everyone is doing {unpopular thing} then we can do {unpopular thing} and not get bad PR from it."
Layoffs and cost focus are two of those. There's also additional pressure from major shareholders (institutional) to reduce opex, even if the better strategy would sometimes be to stretch for some strategic goal when everyone else is contracting. Your stock is going to take a hit in the short term.
Lastly, some is just the "yell harder" mentality kicking in for management that doesn't actually know what to do.
While we often praise leadership for their decision making ability, the reality is most leaders aren't leaders, they're followers.
Particularly in tech and tech adjacent, there's a belief that doing what everyone else is doing is safe. It's the "nobody ever got fired for buying IBM" approach but for corporate decision making.
If other companies return to office, you return to office. They're successful, so they must have good reasons - no need to investigate or come up with your own reasons. If other companies eliminate QA, you eliminate QA.
Most tech companies are just following what the big dogs are doing, but worse and stupider. When it backfires, nobody cares.
It makes no sense to scapegoat Wall Street, when the SP500 was a rocketship (does Wall Street not get the blame for that, if they are apparently responsible for Intel’s demise?)
Various shareholders, or fund managers on behalf of shareholders. What difference does it make? It is still inconsistent to blame “Wall Street” for one company when the SP500 has plenty of examples of success.
Wall Street has more examples of failure than success. It's just that the returns from the successes outweigh the losses from the failures. They could be making decisions that are good for the SP500 but bad for Intel.
People complain about lack of US manufacturing, and short term thinking and its all heavily tied to a couple fundamental truths about companies in the USA.
Corporate raiding and looting is a core part of the fiance sector. There are a half dozen methods of asset stripping used against literally all successful businesses here. Much of this 'short term thinking' is either the business trying to make itself look less appealing, or the actual act of handing the money over directly via stock buybacks or dividends (which are at least taxed) rather than investing in the company.
'Investors' in the USA have absolutely zero interest in the actual companies they are investing in, because it is to easy to divest of those investments or sell/merge the resulting companies. The goal largely seems to be to create the illusion of success at any cost. If that means destroying the company to get a 10% return next month, then that's fine, because they will then turn around and sell it before it collapses.
At least some of this could be solve via strong incentives against short term investing. Say an actual value tax (rather than a capital gains tax) that penalizes holdings less than a couple years. A 25% value tax applied for holdings less than a year that decreases to 0 over some longer time-frame, say 5 years. Yes this would completely destroy the business model of quite a number of wall street firms, and maybe even make it hard for businesses to raise capital. But, it would put a lot more focus on buying businesses that actually have long term prospects, allow those businesses to invest in capital intensive manufacturing operations and a laundry list of other things most people agree is a good idea. It would also likely return stock prices to realistic future return numbers because investing in companies with obviously inflated market caps would become a lot more risky.
Its just capitalism, only 10 people are the top pyramid of owning everything.
Now why all the countries start just warring and killing all at the same time... now that is weird. I guess the best bet is same people who own all the business, stop paying all the bribes at once or something and all the power people go nuts
Conspiracy theory: business leaders don't do as much as they should, so they imitate each others moves to justify their existence on the position. With a side effect of cluelessly influencing lives of thousands, but that's a repeated scheme in the overall history of civilization
It’s not just the same things - they do the same things to similar degrees. They are reading from the same playbook (and have, mostly, the same investors).
> why do all these business leaders all do the same
Simple. These companies need enough 'fitness' in order to survive and thrive. No one has the power to fight against the Nature’s Wille—survival of the fittest. They have to obey, especially when faced with the ruthless, life-and-death competition of the commercial world.
P.S. Hoping this comment doesn’t get downvoted too much and end up dead, not surviving.
These companies include the most valuable companies making record profits. They aren't struggling to survive. They are bowing to institutional investor demands to eek out another penny because the alternative is they get replaced by the board.
Fitness is a relative thing, especially when competing for limited resources, like institutional investor money. Everyone has to be prepared before it’s too late.
By the way, standing as workers, I wish they wouldn't resort to layoffs as the usual route when facing challenges, but sadly, excel competence is required to make it happen, and not many have it.
The top of the market will go GPU and the bottom will go ARM, and the middle will be an ever shrinking x86 market share. The few places that will need heavy CPU resources will be the same people who can apply pressure to Intel's margins.
The process of chip making will look very similar in the future, but the brand of the CPU will matter less every year. Intel's not "dead in five years", but Intel will definitely cross the point of no return in that timeframe. Shifting a big company's focus is more difficult than growing another company who already has the right focus.
We can certainly imagine a limiting factor based on our prior development. Imagine a world where large amounts of coal or oil never formed, or formed in a manner that made it inaccessible to a pre-industrial revolution society. Without easily accessible chemical energy, the technical progress made during the industrial revolution probably takes 1000 years instead of 100.
The age of discovery was a similar scenario. Imagine a different world where 2/3rds of the continents are uninhabitable desert/tundra/arctic, and there was no economic benefit to better ships, clocks, astronomy, cartography. Delays social development of joint stock corporations etc...
Organized crime would be more... organized. There would be servers, infrastructure and documentation. Designed to say exactly the right thing to whoever was looking.
This is garden variety, SMB fraud.
"We trust Tim, and never had a problem so we don't need to invest in all these controls. Tim is really vehement that the controls are useless and he's refusing to participate. No we won't make him comply. No we don't see any conflict here. Please continue to fix the problem anyway."
They paid $13 billion in fines for their role in underwriting fraudulent securities[0][1] as it was coming to light. In a brief that was never filed as part of the settlement (JP Morgan Chase really didn't want this to be filed and made it a contingency for the settlement), made public after the settlement and summarized in the statement of fact released along side the settlement itself[2], the government had enough evidence that it was going to file a lawsuit, the core of which was related to this:
>for a fraudulent and deceptive scheme to package and sell residential mortgage-backed securities that the bank knew contained a material amount of materially defective loans.
If that's not enough, if we want to look just beyond 2008, they pulled a scam to manipulate the part of the settlement which was suppose to 4 billion in loan relief for home owners[3] by forgiving phony mortgages.
I have more, if so desired, but I didn't want this to turn into a hundred link dump of information that would be very dense to read.
As long as you have the money in your coffers to pay for any wrongdoing you'll never get charged. These fraudulent securities in 08' were also somewhat removed from depositors so it's hard to see too many similarities to this case of a local bank.
Robosigning, directing employees to sign fake names on contracts and repeatedly submitting fraudulent statements to the courts, among other things, in a largely successful effort to steal people's homes on a mass scale.
>Reuters has found that some of the biggest U.S. banks and other "loan servicers" continue to file questionable foreclosure documents with courts and county clerks. They are using tactics that late last year triggered an outcry, multiple investigations and temporary moratoriums on foreclosures.
>In recent months, servicers have filed thousands of documents that appear to have been fabricated or improperly altered, or have sworn to false facts.
Reuters also identified at least six "robo-signers," individuals who in recent months have each signed thousands of mortgage assignments -- legal documents which pinpoint ownership of a property. These same individuals have been identified -- in depositions, court testimony or court rulings -- as previously having signed vast numbers of foreclosure documents that they never read or checked.
> But then you have to ask if the institutions doing the application verifications were criminally negligent.
That wasn't negligent. It was intentional.
Not by the institution, but by the officers acting against the interests of the institution.
A tiny example out of so many: it is against the interest of a secured lender to inflate appraised value or allow them to be inflated.
Yet, starting at 2004, appraisers across the country started reporting that they were being pressured to inflate appraisals and blacklisted when they refused.
This is clear indication of fraud against the institution and regulators. There is simply no honest reason to inflate appraisals.
> Not by the institution, but by the officers acting against the interests of the institution.
The institution made a bunch of money. In the ghoulish way banks behave, the institutions interests are only making money. The officers were acting in the interest of the institution the way they understand them.
I believe a similar concept exists in finance, as part of fiduciary duty. It's called duty of care in that context.
"The American Law Institute’s Principles of Corporate Governance defines the duty of care as the duty by which a corporate director or officer is required to perform their functions in good faith; in a manner that they reasonably believe to be in the best interests of the corporation; and with the care that an ordinarily prudent person would reasonably be expected to exercise in a like position and under similar circumstances (negligence standard)."
Again, that's a civil issue not criminal. In theory some lenders might have been able to file civil lawsuits against some of their own employees to claw back part of their bonuses or whatever, but that would have been pointless.
You're right, it's civil rather than criminal, but in the case of some investment companies, like those that sold mortgage-backed securities, it can be enforced by the SEC.
That's just one example. I expect that, had they wanted to, the government could have found many applicable laws to go after those responsible for the financial crisis.
Should I understand that you think accountability for the fraudulent loan applicants was just a form of efficient markets under a broken institutional system?
They shopped around to different ratings agencies and only hired those that provided the better results.
You would need to classify everything from consumer reports to industry awards to not inviting influencers who give negative reviews to events as stealing as well.
Yeah, no. Credit agencies weren’t hapless victims of market forces.
> Another email between colleagues at Standard & Poor's written before the bubble burst, suggests awareness of what would happen to the securities they were giving top ratings to: "Rating agencies continue to create and [sic] even bigger monster--the CDO market. Let's hope we are all wealthy and retired by the time this house of cards falters."
They were willing participants precisely because they were making huge fees to look the other way.
> One study of "6,500 structured debt ratings" produced by Standard & Poor's, Moody's and Fitch, found ratings by agencies "biased in favour of issuer clients that provide the agencies with more rating business. This result points to a powerful conflict of interest, which goes beyond the occasional disagreement among employees."
These kinds of things are deals negotiated at the highest level of the companies involved. Credit agencies were paid to give the crime the banks were doing a veneer of respectability.
> These kinds of things are deals negotiated at the highest level of the companies involved
To me it just seems a more or less natural outcome of the major structural flaws in the whole business model. I’m not sure you need an explicit conspiracy for credit agencies to begin behaving in such a way that maximizes their revenue, it was mostly just a natural outcome of competition and extremely useless and inefficient regulation. If anyone deserves to go to prison it’s the people who were supposed to be regulating the banking industry.
Obviously the Federal government had zero interest in doing that but if they only went after the bankers it would have quickly become obvious that they are not the only ones to blame.
“You don’t need an explicit conspiracy for pig butchering. It’s a natural outcome of competition in the black market and extremely poor security and training.”
If you can actually draw a distinction between what scammers do and what companies do other than “we explicitly have laws on the books to treat it as a crime” I’d love to hear it. There’s a lot of similarities between corporations and criminal organizational - it’s just groups of people who are trying to make money.
And as for who deserves to go to prison, the ratings agencies refused to pay market rates to retain talent being poached by the banks. The same happens in government. So basically the banks continually poach the best people and create incentives to keep the status quo and for regulators to turn a blind eye so that they can land at the bank later. You can go after the regulators but I don’t think that’s going to be an effective strategy to solve the problem.
> You don’t need an explicit conspiracy for pig butchering
Yeah but IMO the scam part is mostly tangential. It hardly matters what did the CEO do with the stolen money, he could have gambled it away at a casino or bought a yacht with it, at the end of the day he still stole it and that’s the crime we’re discussing here.
> You can go after the regulators but I don’t think that’s going to be an effective strategy to solve the problem.
Yes, but going after the bankers would have exposed the extreme incompetence by the regulators and if you started unwinding the whole thing it would have affected a lot of high level people in government. So it’s rather obvious that that they had very little desire to prosecute anyone.
And it hardly matters who deserves what since you can’t send anyone who was just exploiting loopholes and didn’t clearly brake any laws regardless how immoral or unethical their actions were.
Not outright bribes. Just the implicit knowledge among all parties that the rating agency that gives bad grades get fewer customers. Result is the same but not exactly "bribing".
Yea, probably there was invidual cases of bribing like in all industries. But overall the issue wasn't oughtright bribes.
It wasn’t just implicit. There was explicit acknowledgment of the problem and turning a blind eye precisely because they were getting paid by the banks. I don’t know how else to categorize that except as bribery - you’re literally paying money to influence the outcome which is the very definition of bribery.
IIRC, SCOTUS recently ruled that only an explicit quid pro quo is considered a bribe. So laundering monies thru multiple parties is a-okay and mutual backscratching, such as a gifting someone an RV and then coincidentally getting preferential lucrative judgements, is reciprocal altruism. Or something. Because vibes.
I know, I know. Requiring conspirators to say "this is a bribe" for there to be legal jeopardy is sort of nuts.
No problem at all with the concept of price discrimination. The economics make sense. In any scenario where unit costs are low, but development costs are high, the ideal situation is where everyone gets the benefit of having the product at a price they are willing to pay. Maximizes total value to all parties.
The problem with the SSO tax is that it wedges itself into the pre-existing cracks in most organizations. Security practitioners are already in conflict with other departments. What happens when a department head has pitched a new SaaS as being 1x price, but then it becomes 2x price after the security team's requirements are added? It is not seen as the [application is expensive], it seen as [security team's requirements have doubled the price]. Conversely a price discrimination strategy which locks specific user facing features behind a specific tiers means that the same person championing the software, would also advocate for the appropriate payment tier.
Price discrimination is a valid strategy. Responding to organizations who are actively making the security practitioners job more difficult is also valid.
>If you look at a state like Colorado, the energy usage is vastly different than Florida or Texas with lots of heat and humidity.
Electricity usage yes. Energy usage no. Household energy usage is lower in the warmer states, and higher in colder states. I would expect that CO household energy consumption would be higher than FL or TX.
Yes whoops. I should have made that distinction. The parent comment was talking about electricity, and that’s what I meant.
I would argue that the USA as a whole generally has more climate variability than the UK in addition to larger housing to account for the overall energy usage as well.
The connection not drawn here is about capability and flexibility.
You can make a drill without the clutch/torque adjustment, and it will be simpler to use but less capable. Or using the car example, knowing how to manually select gears gives a greater level of control over the vehicle, but most modern drivers don't know/care enough to learn.
The trend is moving decisions/control away from the user. Precisely because it's easier to allow Apple or Google to make all the decisions, rather than learn, manage and maintain things. Users don't understand a CLI any more than they understand a manual transmission. If we want these things to exist, education must be in the mix.
