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After ChatGPT disruption, Stack Overflow lays off 28 percent of staff
(arstechnica.com)
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this post was submitted on 17 Oct 2023
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I've seen so far on Leemy today that a bunch of people have been laid off from Bandcamp, Stack Overflow and Linked In. What the shit. Did the industry just decide to shrink today or something
Q3 just ended. These layoffs are because the books are not looking good. Everyone is hurting with inflation and higher interest, tech being particularly vulnerable to high interest rates.
I can only hope the execs cut correctly. A second round of layoffs at a company can destroy morale enough to sink the company. Who wants to continue working at a place that fired your close peers, wondering if you're next?
Why is tech particular vulnerable to high interest rates?
Tech has been in aggressive growth mode since 2008 because the Fed was handing out free money (interest rate lower than inflation). That allowed investors to dump money into tech businesses in hope of rapid business expansion, which in turn makes the business more valuable.
The free money dried up. Now these tech businesses are going to find out if they're sustainable.