Many of you might know that layoffs are happening since the last few months, but do you know the reason behind it? Yes, there’s a recession but is that the only thing why companies are cutting headcounts so rapidly? Well, yes and no! Let’s take a look at the two answers!
In a video by tldview, he explains why this is happening.
At the start of the video, we see that the guy is playing double roles and asks why these layoffs are happening.
The 2nd guy starts explaining, “People are spending less. For two reasons. One, they’re not locked at home online shopping all day. And two, there is a recession.”
Then he says, “We’re gonna put a question mark beside that because we’re not clear for its recession because no one’s calling it that. But let’s all agree that the market is acting super weird, OK?”
So, what does that even mean, right? To explain that, we need to know how most of these companies make money. For tech companies, the primary source is ad revenue.
This means since companies are making less money, then they’re spending less money advertising. So, it’s a major problem for tech companies.
There are also companies that make money through online commerce, like Shopify and Stripe. he says, “They don’t sell you anything, but when you’re buying online, they’re making money.”
But why the layoffs, though, for these companies? He says, “Well, companies grew really fast. They called it then they had to pay all their employees expensive salaries. How do you reduce costs? Stop paying salaries.”
Now, you might ask why right now then. The guy also answers that. He adds, “November is a fantastic time to lay people off because then their salaries are not on your books. Come next year Q1. The second thing is if you wait any longer, it will be too close to Christmas, and it’s too much of a d**k move to do it then.”
Okay, so the first guy now asks what the short answer to all this is. To which he replies, ‘Capitalism‘. All in all, they are laying off people because they can. No one can do anything about it.
Watch the video here:
@tldv.io This is obviously VERY simplified and not true for all tech companies. But hope this helps! #workfromhome #tech #layoff #recession #techindustry #whatis #corporatehumor
One of the viewers left a comment on the video, which made a lot of sense. He wrote, “any system based on endless growth within a confined planet is unsustainable.”
What are your thoughts on why these layoffs are happening? And do you think that capitalism is the answer? Let us know in the comment below. And, if you found our content informative, share it with your family and friends.
Also Read: Amazon now wants employees to leave voluntarily after mass layoffs.
