I'm glad the article posts about visa sponsorship changes, as an immigrant to the US/EU this is the biggest falloff I've seen. Over the years I've seen relocation as a perk slide:
2013: Was flown to EU country for an interview, accepted, they handled the immigration paperwork (mostly) and helped me find a place and get settled. Plane trip was at my discretion.
2015: Immigrated to US with same company, they handled the visa and gave me help to find a place and get settled. Plane trip was at my discretion.
2018: Accepted new job in US, visa was handled however plane trip was 3am in the morning out of Gatwick.
2021: Accepted new job in US (after leaving the US for 3 years), visa was handled but I had to pay for my own plane trip. No help with finding apartments or any relocation expenses.
2022: Accepted new job in US at FAANG, work permit was handled however visa was not, all expenses to get the visa came out of my pocket (plane tickets, hotel accommodation, embassy appointment). No relocation help or expenses.
2023: Accepted new job in US, all work permit/visa issues came out of my pocket including the fee paid to the lawyers for handling the visa application. No relocation help or expenses.
not directly related but strikes a similar chord, here in my country a lot of kids take up nursing so they can eventually get a job overseas. Once they graduate they need work experience before they can apply for jobs overseas so they work at local hospitals that give meager pay. Factoring in commute and meal expenses, they earn less than their living expenses. In a way, they are "paying" for this privilege of getting the experience necessary to move on and take a shot at a better life outside the country.
You're almost certainly losing out, in terms of salary progression. Climbing from 50k to 200k by swapping every 2 years is typical. It can be done before you're 50 at almost any skill level.
This "greedy algorithm" can have worse long-term results. If you want to grow, you need to stick around longer to get enough know-how and develop relations to actually achieve something big. If you are happy with being Google L5 equivalent permanently then yes it is a good strategy.
At Amazon, after year one, I didn't learn much that was new - just a lot of the same stuff month-over-month. I found the biggest growth was when I switched jobs and learned a new environment, systems, team processes; and that was second to working on open source where I probably learned at about 5x the rate I was compared to professional work.
On each job hop, every 2 to 3 years, the pay increase was 30% to 50% each time. I'm now at year 5 in my current job, I've gotten a 10% pay raise just based on the company giving raises, and got a 20% raise in a counter-offer.
Thus, job hopping, I learned a lot more & was effectively increasing my pay by 10% every year. Now that I'm at the same place for 5 years, my pay effectively increased by less than 5% per year and that number is dropping (I'm at max salary, no raises are forecasted for me).
I think it's largely situational what is better for someone. I've known various "senior" MS or Amzn engineers that had long since been so far removed from coding that they were lousy developers (10 years of the same two years of experience). Thus, I think growth (salary and personal) is largely just what you do with it, IMHO there are likely bigger variables at play compared to job tenure.
I agree that it's definitely nuanced. However, I have also seen many cases of people "failing upwards". They basically do a mediocre job at their current company with middling performance ratings, such that there is no way they would get a promotion (for obv reasons), then jump to another company at L+1, rinse and repeat, until they plateau after 2-3 promotions. It's good for them personally, but terrible for the industry, as these people with actually very mediocre experience and ability are now leads.
The only thing I want to grow is my brokerage account. ymmv. You can be the best, hardest worker and still get tossed out when layoffs come (as Google has shown recently, among others [1]); you'll get a sad LinkedIn post opportunity tagging a bunch of colleagues about "your incredible journey together in the books" that folks will scroll past and move on to your next role. It is important to cultivate opportunities to have meaningful work, certainly, but freedom is more important (imho) than whatever slides you'll put together to communicate some corporate success story that'll be a line item on your resume/CV as soon as you're out the door competing with hundreds of other folks for a new role (if you don't have a network you keep hot).
TLDR Skill and luck are orthogonal. No one is going to look out for you but you.
I always get the most growth when I switch companies. Staying at the same place tends to mean I simply continue to see the same problems again and again.
The "ZIRP" meme is way overdone by now. ZIRP doesn't explain much. Interest rates had been rock bottom since the 2008 crisis, were already quite low since the 1990s, and are still not very high today.
IMO the "vibecession" meme explains what's going on within tech a bit better. Tech CEOs and VCs have decided that the tech industry had to shrink, notwithstanding that the wider economy was and is doing fine.
Tech CEOs and VPs found that they're out of ideas on how to grow the pie. So to achieve their personal goals (which is always more), they had to increase their share.
The fear, uncertainty and doubt over the economy serves to make everybody else fear that the pie could disappear completely. And so they're happy they still get scraps, leaving enough for those CEOs - for now.
Lately I keep thinking about Mr Buffett's remark about class warfare...
> Interest rates had been rock bottom since the 2008 crisis
Exactly. So we had ~14ish years of effectively 0% interest rates. That's never happened before in history. Now that we're going back to normal rates, we're discovering that some things we did when rates were 0 aren't actually feasible anymore.
That's what ZIRP is. It's a decade and a half of 0% coming to an end.
I think it's absurd to compare the tech sector in 2023/2024 to the tech sector in 2010/2011. Unemployment is lower today, and several capital intensive industries (ML hardware acceleration for one) are significantly hotter than anything we had then.
Having been in both time periods, a distinct difference in 2021 was a sense of unreality - a company/org/large team could survive provided that they had someone important who believed that it would be useful some day. Ultimately, I suspect this is because important people had access to effectively infinite dollars for a time. Provided that they did not have to mark down a loss.
This time period is coming to an end, we're once again looking at real metrics and seeing that some sectors of tech had none. In the end, this will probably be good for the industry - but it will be an unpleasant transition.
I didn't compare the tech sector now to the tech sector in 2010. Not sure where that came from.
I'm saying that having 0% rates for 10+ years resulted in a lot of behavior that is largely impossible in a normal non-zero environment and we're just beginning to fully discover what those behaviors were.
People seem to forget that the dot com boom happened under very similar interest rates as today, and the tech companies that are announcing layoffs for the first time ever like Google are the least sensitive to interest rate shifts because they have their own massive treasuries.
What we are really seeing is massive extrapolations from 2020 and 2021 being completely off and companies having to manage more realistic growth expectations.
Mark Zuckerberg is not laying people off because "higher interest rates => no one wants to invest in Meta any more". He's laying people off because he has found the excuses he needed. Rightly or wrongly, he simply wants to follow Elon in building a much leaner organisation.
> Interest rates had been rock bottom since the 2008 crisis, were already quite low since the 1990s, and are still not very high today.
Interest rates dropped from previous highs in 1990 and have stayed down. The current interest rate is about equal to the mean and median for the 90s, and is near the peak of interest rates we've seen in that time.
45% of the US population is age 34 or younger. So for nearly half of the country's population, interest rates are nearly as high as they've ever been.
So calling it "not very high" is misleading; you're comparing now to back before nearly half the country was born.
I just disagree with the characterization of current interest rates as "not very high" when higher interest rates happened so long ago nearly half of us weren't alive. It's important to contextualize when we use the past as a learning tool.
For example, this article is thinking about how low interest rates affected the tech sector. When interest rates were much higher than they are now, the internet did not yet exist.
I don't think tech shrinkage is vibecession (though its part of the reason for the broader vibecession), tech saw countercyclical high demand during the pandemic slowdown and took advantage of that and easy money due to stimulus-oriented monetary policy to expand; the demand boost ebbed and monetary policy aimed at controlling inflation took easy money away, so there had to be some correction. You don't see it elsewhere because the countercyclical demand wasn't elsewhere; procyclical demand shifts are buffered by reactive monetary policy rather than magnified the way countercyclical ones are.
The "by any metric" statements seems false. A "not doing fine" does not have 54-year low unemployment rate @ 3.4% [1]
US GDP growth for since 2022 Q3 has been in the 5% range (very strong) [2]
Median individual income is at an all time high, poverty rate is at a 10 year low (2% decrease from 2014 to now, not huge percentage wise, but that is still 6 million people)
On the flip side - yes, home sales are at a low. Increased interest rates and a real estate market that saw a price correction in 2011 and 2020 with the corresponding economic recessions, has not made housing any more affordable at all.
> Tech CEOs don't control the interest rates. The interest rate effects their ability to get free and cheap money.
True, though that free & cheap money means more people can start companies, grow their companies faster - and that in turn creates bottom-up economics where more people have more disposable income and can then buy homes.
My second mortgage is now absurdly expensive.. But yeah, we are seeing the result of the Fed policy to try and _cool_ the economy as much as they can. One of the big levers they have - interest rates. The Fed intentionally made mortgages more expensive.
Further yet though, housing inventory is a big factor, which you then need to look at local governments and zoning restrictions for why there is not more housing built.
In sum, the wider economy IS doing fine by several metrics. Inflation AFAIK was not really a factor for home prices to increase. That was caused by the Fed, a a deep pandemic-induced recession, and all of the same forces that have caused housing prices to increase since essentially the 70s & 80s [4].
So the average working person is in fact worse now economically than they were 2-3 years ago. It's not just a subjective feeling, and the other positive metrics don't change that.
Though, I was responding to specifically: "by any metric", and the presence of one poor metric does not justify that statement.
> So the average working person is in fact worse now economically than they were 2-3 years ago.
I don't think that logic holds. Real wages is not _the_ one measure of economic health. I would agree that it is likely a significant portion. I would posit that whether you are employed or not is another significant measure, as would be things like net household wealth (which are back to early 2022 levels) [1]
> It's not just a subjective feeling
To some extent, the metrics do not show that to be an objective feeling. For example, real wages are back to 2020 levels, would we expect consumer confidence to be at the same level? If real wages and economic health strongly correlate, I would suspect consumer confidence would as well.
The data shows we're a good bit under 2020 and are at confidence levels of 2017 [2]
On the other hand, economic sentiment _is_ subjective. For example, if you and everyone in your town is in the 30th percentile of the economy, it's not going to feel like things are going well. Which is to say, no one person can easily get enough anecdotal experience for it to be statistically significant.
What's more, economic health is hard to measure. $30/hour might be great if you live with parents & have no debt, but it could be crushing if you have children and rent. Which is to say, I'm quite sure you can't therefore accurately say 'in fact worse now economically' based on one measure.
Absolutely - I did my best business during and after the big 2008 meltdown -companies threw out the good with the bad in order to save money (on payroll) and then realized they still needed stuff done - but many departments in many companies weren't (yet) allowed to start hiring back FT employees - it was a golden opp. for consultants, especially if you didn't charge obscene rates (good rates, just not obscene), i.e. rates high enough to make real money, but not so high they needed special approval by several layers of management.
I started freelancing in '08 alongside my full-time job and by '12 had a sizeable down payment for my first home and a very healthy savings account. I didn't overcharge anyone and I leaned hard into former clients to find new work. I walked away from it around '13 because the well dried up. It hadn't occurred to me quite yet that a similar situation may be occuring right now but it makes perfect sense.
I've said this on here before, but I think we're about to see an explosion of "cloud exits" and a healthy consulting demand for companies who want help doing so.
Cloud was a ZIRP, unless they drastically change pricing and billing.
Network. Figure out what your network wants. I’ll still consult on dev stuff but there’s a lot of aging SMBs and retired execs who need a smart person on retainer to help them figure out… everything.
Squarespace costs $300/year. Sell it for $3000/year with 4 seasonal updates or something.
> Job market realities. It’s tougher than it’s been in a decade, with fewer jobs, and more qualified candidates. This is great if you’re hiring, but harder for applicants.
Is this true? Layoffs make the headlines, but the unemployment rate for software engineers seems to be low, at least in the most recent numbers I can find.
The rest of the items ("Compensation changes", "Negotiating offers", etc.) just follow from that premise.
Of course, everything could tank tomorrow, but it's probably not smart to get into a defensive crouch earlier than you have to.
It is definitely true in my experience, and for those seeking 100% remote or with only 0-3 years of real experience (not school) it is even worse.
I have posted this comment before on HN, but ~8-9 months ago we posted a job for a lead engineer at my company - we got 3 applicants (this was for a fortune 50 company, and comp, while not FAANG, was very respectable with good benefits and decent bonus and stock options to boot).
~5-6 months after that we added another exact same position, and advertised it in the exact same places and got over 300 applicants - many ex-FAANG which we never used to get.
So based on my personal experience, there are a lot more people looking and applying for jobs and a lot less jobs to choose from - and like I said, if you are dead-set on being remote, it is even harder - my most recent employer (100k+ employees) will no longer allow hiring managers to interview people who state they are only looking for remote (they don't have to, plenty of people are willing to show up at the office because they have rent/mortgage and bills to pay).
> Is this true? Layoffs make the headlines, but the unemployment rate for software engineers seems to be low, at least in the most recent numbers I can find.
Absolutely true. It's the worst I've seen. I'm looking to fill 5 positions at our place and the scene is just sad. People out of work since feb-june of last year, highly senior engineers unable to land interviews because they want fully remote, leads having their work outsourced, heads unable to find head positions and having to settle for senior roles.
The worst ones hit are the ones that have spent a decade working in ibm/oracle/vmware stacks, now, due to layoffs, entering this new k8s dominated ecosystem, where they're finding their skillset to be undesired, even by big institutions as those have too begun migrating to k8s/cloud.
My anecdata says it's true. Where before I didn't get a single rejection (so applying was sending out four applications and getting four interviews) in this round suddenly some even did not invite me for interviews, they just declined. Strange experience! And I only applied to more positions this month because a position that seemed a safe bet did not materialize at the end of last year, the project evaporated when the (one would think unrelated) automotive market catered, the linked agency instead scrambled to find projects for their existing devs.
Just like the dating markets, a small shift at the margins can influence the culture quite a lot.
You would not think that there would be much difference between a city with a 50-50 gender ratio and 52-48 (theoretically). But if you assumed that 80% of people are in relationships (1-1), and 20% are looking, suddenly that 4% difference turns into 33% more of one gender than another (hypothetically with 100 people, it would be 12 of one vs 8 of the other). So the culture between those two similar looking cities will be completely different.
A similar thing happens with jobs. Going from 99% employed to 98% employed without changing number of jobs available can completely change the employment market dynamics overnight.
Roughly, we poured ungodly amounts of capital into building out internet infrastructure for nearly fifteen years (fibre optics, data centres, and yes smartphones count as infrastructure).
Just like railway boom and others before, there is a ton of railways going to wrong place, or too much to same place.
Businesses will pay good money to
a. Find out what they actually have running where
b. Move the core in house where it’s cheaper
c. Have sensible ways to scale up if needed (that month end report run etc)
The work is still there. But demonstrating how much is currently spent on what and how that can be better spent is the real win here.
We are in a downward cycle for Software right now. Are higher interest rates a precipitating factor at the moment? Sure, but there are others as well including the COVID bubble etc.. Our industry was bound for a correction. That said, interest rates alone do not predict a tough market for software engineers since the majority of the .com bubble in the 90's saw 5% percent interest rates.
The difference is, the 5% interest rates in the 90's seemed low, because we had been on a steady slide for 10-15 years from rates much higher, so they seemed low at the time.
Now a 5% interest rate seems high, since people were used to the ZIRP.
I think people are overly attributing the end of low interest rates to the current job market in tech.
The truth is over last 10-20 years we've gone through a huge technological boom which has driven the job market in tech. In the mid 2000s almost no one knew how to code. Software engineering was more a hobby than a career choice back then. Yet, from 2005-2015 we had innovation after innovation which demanded people with coding skills.
This article mentions things like the launch of the iPhone and AWS, but there was so much more than just that. The switch from dial-up to broadband meant people were more frequently using the internet, and using it for more than just web browsing – now they were downloading music, watching videos and chatting to their friends. Then the launch of the iPhone and 3G shortly after meant suddenly the internet was now everywhere all the time, and this spawned businesses like Facebook and Uber who enabled companies like Twilio. And now that everyone was online eCommerce started to boom too which enable companies like Saleforce, Shopify and Stripe.
And I could go on here, but our lives are so different today and this shift fundamentally required a large number of software engineers during a time when software engineers were in very short supply.
While progress will continue, it seems unlikely we're going to see a repeat what we've seen over the last ~20 years. AI might change our lives significantly, but it's hard to see how AI would make software engineers more valuable given they fundamentally make knowledge and intelligence more accessible.
Additionally, today software engineering is a career kids actively pursue, and even if they don't pursue it most kids will still end up doing some basic coding at school.
Meanwhile things are getting easier to build all the time. When I was learning to code building anything was a technical challenge. For one, Youtube and Stack Overflow didn't exist. There was no cloud hosting, and no free tier hosting. Programming languages themselves sucked – if you think Java sucks today then try using it 15 years ago. But the biggest changes have been in SaaS where today literally anyone can start an eCommerce store or take payments online in minutes.
The things I do as a software engineer today are becoming increasingly niche and a lot of it is just plumbing services together which doesn't take much intellect. And even this can increasingly be done with AI tools.
I think tech as an industry is going to do great over the next decade, but they won't need as many software engineers.
I'm actually thinking we will need a lot more (competent) engineers soon when someone needs to start fixing the immeasurable piles of garbage that no-code AI crap produces. This is a good time to really level up on the ability to solve complex problems. But yeah, your average React.js developer will most likely go out of business.
If those no-code AI crap host production service well enough, then I think a bulk of industries running software via that will handle it fine. Obviously the first major production incident caused by it might shift the scales. But functional-ish code minus SWE egos and pay demands? That is appealing to the money and ops people who run and own companies.
Agree with a lot of what you say except that software engineering was most definitely not a "hobby" in the mid 2000s! We were already past the dot com crash. There were lots of professional software engineers.
The biggest thing that companies need to optimize on - which they don't seem to have caught on to yet - are management processes which create unprofitable overhead.
While "overhead" is an overloaded term, in practice it looks like:
1. Too much documentation, blog posts, spreadsheets (designed for management optics). Every one of these artifacts takes dev time.
2. Excessive stages in CI pipelines, internal tools, saas tools usage (designed for engineering promos). Every one of these takes dev time.
3. Excessive features (designed for IC and management promos)
4. Excessive amount of time spent in promotions, stack ranking, and performance reviews (designed to make management useful)
5. Excessive time on making agile work such as time on Jira story points, backlog grooming, retros, meeting minutes, agendas, scrums (designed to again, make management appear like they are doing something).
6. Excessive number of management layers (manager, sr manager, director, sr director, sr sr director, associate vp, vp, svp). Every person on this ladder is overhead*365 days a year.
All of these are entirely a problem of management layer overhead.
The only and only thing that works in a tough environment is few "skilled" managers who are still very technical and can align people and teams work towards specific goals.
As much as I agree with the high-level message, I disagree with the specific list.
The list makes sense from the bottom, where the goal is to get stuff done. The list makes no sense from the top, where the goal is to make sure the right stuff gets done. Without a lot of those, you end up either with:
- 1000 employees moving in 1000 directions
- 1000 employees working from home doing nothing
... or similar pathologies.
Organizational alignment is hard. I would have written a similar list to yours two decades ago, but right now, I see just how much effort it takes to make sure things don't go in the _wrong_ direction.
The good stuff on your list to eliminate are management layers, excessive features, and promotions / performance reviews / stack ranking.
Most of the things designed to provide communications, alignment, and transparency (e.g. documentation, spreadsheets, blog posts, many types of internal tooling / dashboards, backlogs, retrospectives, minutes, agendas) are very much necessary evils. There might be better ways to accomplish some of those same goals, but if you just cut them, organizations break, and break very badly.
You definitely can (and should) do without those at 1-5 people, and possibly up to 30. It's worth noting "people" here often includes external stakeholders, such as investors.
> 5. Excessive time on making agile work such as time on Jira story points, backlog grooming, retros, meeting minutes, agendas, scrums (designed to again, make management appear like they are doing something)
I lose so very much time to not just the ceremonies, but to wrestling-with/losing-things-in all these bafflingly complex tools like Jira or Asana or "Azure Devops" and such.
Most places I've been use Github or Gitlab. The issue trackers there are fine. They're close to the code, and in a site I'm already using. They're easy to have conversations in. They work well with built-in review processes, and with pull/merge requests. They don't permit enough strict structure that one worries about smashing some PM's carefully-constructed sandcastle by just trying to use them, but have enough filters and tagging and such that you can apply every bit as much logical structure as I've ever seen in Jira and friends, if you want to, it just won't also make it horrible to use when you do.
I wonder sometimes what % of productivity companies are losing by letting PMs pick where tickets & communication about tickets live. Plus the extra cost of the tools themselves.
My previous team is getting into a fight with a new project manager who doesn't want to acknowledge the logistical issues of trying to fit a new agile framework into "Azure DevOps", and the team doesn't want to admit that their current workflow is suboptimal because of the change that will entail.
And of course, the politics of using anything besides ADO will take years.
7. Excessive componentization. Microservices. Many many source control repos. Many many artifacts. Many many highly encapsulated classes/modules/services/entities. All creating a conceptual and practical trail of complexity and usually shipping the org chart instead of a product.
The siloeing is driving me crazy. Everybody works in their own little box doing their own thing without any regard to how things fit together. Microservices, separate repos for some trivial all lead to enormous integration efforts.
This is a direct result of engineering teams being let loose and becoming risk disconnected from the wider org. This leads to risk evaluations at a macro level which absolutely destroys efficiency.
Sit down with your risk or compliance officer for a couple of hours and thoroughly explain the ins and outs of your complex CI/CD pipeline to them. Your whole team will be up shit creek by end of the week.
Agile is an adjective, not a noun. The opposite of agile are words like clumsy, apathetic, depressed, dispirited, down, dull, ignorant, inactive, lazy, lethargic, lifeless, rigid, slow, sluggish, stiff, stupid, brittle, etc. That's why being agile caught on because none of the opposites sound like a good thing to admit to.
That's why agile is a bit vague and waffly as well. Because world+dog now calls themselves agile. And then you get all these pedantic types telling others they are doing it wrong, aren't pure enough, etc. They are the priests of agile. And they get hired by big companies for lots of money to help them become agile. Of course that requires some compromise and they adapt their definitions and standards until it's all agile and wonderful. Because the alternative would be admitting failure, which isn't mutually beneficial. You are kind of doing waterfall in an agile way For example, you plan 20 scrum sprints ahead and then act surprised reality has different plans. It's still as dumb as waterfall ever was.
Most of these companies of course deliver software just fine. They don't do it particularly fast. Or well. Also they aren't that flexible. Or particularly quick to adapt to changing circumstances. I.e. all of the things one would associate with being agile (in the adjective sense). But it's good enough to call themselves agile and still feel good about it.
People were doing awesome software long before agile development became a thing. That was never conditional on being agile (whatever that means). I've been around long enough to have seen the before and after the post-it shufflers came in and made our walls all colorful. And I can tell you that the average software project is just about the same level of a disgraceful mess as it was thirty years ago. We do a bit more of it and a bit differently. And we got some nice tools that remove some bottlenecks from our process (like automated tests and CI) and make us more productive That's not agile, it's using better tools and it helps. The tools definitely improved massively in thirty years.
"And can you update the detailed plan now that we've decided to change a fundamental decision that invalidates half your planning? That'd be great mkay."
I don't think it means much at all. Software jobs boomed in the 80s and 90s despite high interest rates. Tech tends to do well in almost every econ environment. And already, interest rate forecasts falling.
Tech does well enough in most economic periods in the US.
But ZIRP was like the juicing era of baseball homerun record setting. The valuations, and therefore level of employment and particularly the compensation all got very distorted and is slowly coming down.
Why? Interest rates are the cost of money. If money doesn't cost anything/much, you don't have anywhere else to park money, and you can take longer bets!
VC funded startups going a decade with no revenue or no profit is something you can tolerate in that environment.
What else are you going to do, put the money in a bond paying 0.5%? After a decade your $100 is now.. $105 in nominal terms, and a loss in real inflation adjusted terms assuming essentially any inflation.
So you gamble that 5% of the 100 companies you invest in will be worth 25-50x what you invested, in 10 years.
You end up with $125-150 in nominal terms after a decade for every $100 you started with. A lot better than $105!
It is 5-10x the safe return.
Now, when you run the math again with available no/low risk investments yielding 4%, you suddenly need a much higher hit rate and/or much higher return.
Simply putting the money in a 4% yield for 10 years gets you $148, the top end of the prior ZIRP era VC return example.. uh oh!
So what do you do, as an investor who still wants to get paid for taking VC risk? To get 5x the safe bond return, you need 25% of your book to return 25-50x, or 10% to return 62.5-125x, or 5% to return 125-250x.
Everything is much harder and you need more of your investments to work, and for the ones that work to return far more.
So tolerance for profitless unicorns for a decade is dramatically reduced.
That still hurt plenty over the short term, and it’s important to remember that metrics aren’t people. If you were a mainframe developer in Cleveland who just got laid off from a bank, it didn’t help your next mortgage payment to know that a company in San Francisco hired three people to build web apps even though the BLM’s national report would show a net gain of 2 jobs. This time we also have two big differences: most businesses are much further along on adopting IT (we’re unlikely to see the equivalent of the web boom in scale) and the internet’s ubiquity means that the alternatives often include replacing existing processes with SaaS services, which often requires fewer people than 80s/90s automation projects did or means they’re looking for someone to customize SAP, etc. and won’t consider you if your résumé doesn’t have the specific service they bought.
I am not saying that doom is the correct outlook here but I do think it’s a good idea to really think about what a prolonged down market would mean personally. That’s especially true if you were, say, flying high at Google until a layoff and now are looking at things like a public sector job which is quite stable but has no prospect of paying better than half of what you used to make.
>Tech tends to do well in almost every econ environment.
Yeah, I think "no more ZIRP" is a stand-in for "the economy is changing". And, that much is true. We just went through record-low rates for a record length of time, straight into the fastest hikes in history. That has repercussions, and I don't think anyone knows what they will be yet (oh and there are some interesting geopolitics as well).
But I can't help but think most of these layoffs are also a return to "normalcy". The pandemic job market was, literally, insane. But even before that, it was hard to get development work; prices were astronomical if you could even find people at all. For the tech ecosystem as a whole, there are advantages to salaries and wages coming down. That shifts around cui bono, but it allows for more ideas to see the light of day...maybe.
All this is to say I don't think it's doom and gloom. We'll have a period of transition and realignment, but tech skills will always be in demand.
This was a historic period for low rates, but rates have been higher and have been changed faster before, for example during the late 70s / 80s. It went from 4-5% to nearly 20% over the span of a couple of years.
In the long term I think you're pretty much right, but in the short term, all these businesses that were structured around the assumption of easy massive funding rounds from low interest rates have to figure out how to operate in high interest rates again, and will likely shed a lot of employees in the process.
VC boomed in the late 90s when interest rates were very high. The federal funds rate in 2000 was as high 7%.
If VCs expect to double their money on the latest AI fad, do they care if the interest rate is 0% or 5%? likely this does not factor much into their decisions.
Correct. If risk free return is 5% there is less need to take more risk on risky VC or private equity bets. Those allocations would necessarily be smaller overall. In addition the same effect on term sheets - the VCs will expect MORE return on their money for taking the investment risk which will be reflected in the terms.
Sure, but most businesses at least try to be profitable, whereas many in tech were fundamentally untenable without a constant injection of external capital to prop up a venture aiming only to grow rather than to actually be sustainable.
Growth businesses like tech and startups also tend to be more sensitive to rate increases due to changes in the time value of money. At 0% rates a business that generates a return in 10 years is fairly close to the same as a business that generates a return in 1 year, but at 5% rates the math is very different.
Still blows my mind that Uber's first reported quarterly earnings that showed a profit in its entire history was Q2 2023[1]. And the company was founded in 2009. They've been losing money for well over a decade and yet still getting wave after wave of cash from investors.
>Their latest funding was raised on Sep 14, 2020 from a Post-IPO Debt round.
I would not even count that since "getting wave after wave of cash from investors" usually means receiving cash in exchange for equity, not borrowing money.
It seems the most recent cash they received from investors was at IPO in May 2019, and before that, Softbank in Jan 2018:
Your own link shows that they've had 32 funding rounds.
I'm sure they've had an increasingly smaller burn rate in recent years, as they've gotten closer and closer to profitability, and thus required less cash less often (also if the funding round is large enough, they'd need to do it less often), but I'd consider 32 funding rounds wave after wave of cash from investors to me.
That's even more rounds than I assumed, that's more than 2 each year on average.
The dotcom boom definitely included decent wages but it wasn’t anywhere near as pronounced - lawyers and doctors weren’t trying to become software developers. A few people made a lot of money on stock options but that was usually the owners rather than the developers, and a bunch of people really weren’t even making more than boring corporate jobs when adjusted for the number of hours they were working at burnout.com.
Oh, sure, but in the 90s if you wanted to work crazy hours you’d have made a LOT more money by going to law school and making those extra hours billable. A lot of dotcom people were making like $60-80k - not bad but not amazing - and hoping for a big options payout to make the extra hours more worthwhile.
But only $140k by the turn of the century, which is when the dotcom bubble was happening. Again, I’m not saying it was terrible or anything, just that it wasn’t the equivalent of the FAANG engineers getting $400+k total compensation.
Interest rates followed a downward trend overall throughout the 80s and 90s, with a few brief spikes and a 5% plateau between 1995-2000. We started the 80s with sky high rates from the Volcker inflation era. Ultimately, interest rates halved, from around 10% to around 5%, during this period.
By contrast, interest rates went from 0.1% to 5.5% in the past 18 months. Even if you add the prime rate, the cost of capital tripled, from around 3% to around 9%. That's an unprecedented financial shock for pre-revenue companies.
Yes, but when interest rates were high decades ago, malinvestment bubbles started smaller, deflated, and ended up much smaller. I think by most measures, the current economy-wide credit bubble (and tech wage inflation bubble driven by stocks) have only been minorly dented by tightening (despite the layoff waves), and we're very likely to reverse course into easing.
Keeping these fundamentals in mind, it's likely Silicon Valley will see an outflow of workers over the next couple of years, and salaries will be depressed in other cities due to the moving labor supply. Then once easing begins, we'll see that trend reverse yet again.
I don't know. From an employee's perspective there's such a long tail of incompetence in tech. I also have doubts about a large chunk of new CS grads who were born with a smartphone in their hands. Software engineering is only continuing to diverge from CS and the lack of startups will impact their ability to get up to speed compared to older millennials who are now mid-career.
If you're used to being the smartest person in the room, or at least the one with the most guts and speaks their mind, nothing is changing for you. Your career is fine as long as you don't work for a startup (anymore) and have at least 5 years under your belt.
From a business cost perspective running one is now more expensive. Though it's important to remember how cheap it's always been for tech and how cheap it still is. What's more difficult now is that "hockey stick growth", but that was never easy either.
Can you explain about the new grads born with smartphones? I'm not sure what's the implication.
I'm soon to graduate and constantly worry about the future of my career.
I was lucky to get some experience while studying, and I also have something to work on right after graduating, but the future just sounds scary to me.
Oh no sorry didn't mean to worry you so much. The market will have to adjust to take in this new wave of entry level people. There's still way too much demand for devs for it to be any other way.
I meant that in the 2010s we had a ton of tech startups even in the most random places. Every business was wondering if they needed an app or big data service. I didn't even bother with an internship because everyone was hustling to make the next smartphone app or SaaS/IoT product and get that sweet recurring revenue.
That meant it was easy to get experience wearing many hats. You'd get exposed to absolutely everything from meetings with the client, web dev, database, embedded, kernel patches, etc. I still had a couple years of school left and had all that on my resume as a fresh grad.
This generation is going to take longer to get up to speed with all the crap you end up having to learn in the "real world". To be honest it may not even matter. As things have matured less deep knowledge may be required. It was a different kind of stress back then. Everyone was terrified they weren't good enough and competition was crazy. We thought our jobs were going to be taken by someone from abroad as the gig economy and remote work ramped up. We weren't entirely wrong, but the threat was overblown as communication barriers and time zone issues were realized.
I'm in a more senior role now and have accepted my more corporate fate. I can't speak for everyone from my era, but I have no issues building up new hires and I think most of us are grateful and proud to be in our roles. As long as you find a boss who keeps you from slipping into that "long tail of incompetence" it'll be okay. I'd try to not work somewhere that specializes their employees too much when you're still new. That's how they lock you in, pay you jack shit, and ruin your prospects. Every career even outside of tech has that problem of getting pigeonholed because of your resume. Things have just slowed a bit and I will have to remember to not be a cranky old man who constantly whines "back in my day..."
> The job market is brutal for new grads and early-career developers
Getting one's foot in the door has always been hard, but it seems there's another trend here: Computer Science is now the most popular major at many schools. All of those students need a place to go.
I see this as problematic. I'm of the belief people have brains and interests suited for different things - I for example cannot draw to save my life, or even imagine well. I failed hard in engineering school because I seemingly had little ability to do these tasks (sliderules and paper at the time).
Most of the -worst- colleagues I've had in the last decade were folks from other walks of life who took a short boot camp, chasing money. Not all, but most, seemed to have zero passion for it, and didn't "get it." This is not to say I blame them - not one bit, but average quality took a huge hit.
CS is starting to feel like MBAs of the late 90s early 00's - everyone chasing what they believe is easy money without thinking about it and absolutely flooding the field until it became a 'nice to have'.
> Most of the -worst- colleagues I've had in the last decade were folks from other walks of life who took a short boot camp, chasing money.
Yep lots of my friends couldn't give a crap about tech and took this path. Their main goal was to grind enough to get into management. Some of them are now managers at meta making 500k. I feel wronged lol.
Well... that was their goal and congrats to them... I guess.
They found another way into management which is probably where they belong... for now until they're up and out. Easy come, easy go. Can you really imagine having to write code with people like that on your team long term?
Anyway the money isn't everything. I'm sure plenty of them are miserable because they're constantly under threat from more competent people. Sometimes the crown wears you.
Indeed, I'm fully convinced that breaking into the industry without a degree at this point is nearly an impossibility. Total 180 from how things were ten years ago.
As a self-learnt (now senior) developer, I'm very happy I got my start when I did, 12 years ago. It wasn't easy back then either, and lots of places wanted a degree, but a few side projects usually did the trick.
The idea that bringing in revenue and bringing in more revenue than you spend was something that fell out of fashion cracks me up and shows the fantasy land we've been living in
The title mangler somehow got from "The end of 0% interest rates: what the new normal means for software engineers" to the incomprehensible "What the The end of 0% interest rates means for software engineers".
EDIT: Not complaining about downvotes, just checking site norms. My understanding was that it used to be appropriate to point out failures of the title mangler, so that dang could fix them by hand. (Thanks, dang!) Is that no longer appropriate, or is there some better way to do it?
> It is notable, however, how both the smartphone and cloud computing revolutions of the 2010s coincided with the start of this long ZIRP period:
Nope. ZIRP really had nothing to do with the start of the cloud computing revolutions, since the industry was already moving in that direction with outsourced IT, and outsourced SaaS-like stuff (Application Service Providers was the old term for it).
I think the reason why IT & Software engineering benefit in most types of rates has to do with efficiencies and profitability.
> To begin a software startup before AWS launched in 2006, a founder needed to purchase and set up servers, then operate them. This required thousands of dollars, and weeks to launch a website. But with a cloud provider, all that was needed was a credit card, and a founder could have a website up and running in minutes, for only a few dollars.
Nonsense. colo was very cheap and fast, took minutes or an hour tops to set up. And most startups needed something like webhosting or Ruby/Python hosting, both available.
AWS added speed to scale and being lazy with performance.
1. Consolidation. There will be fewer and more powerful tech companies in the future and they will grow and profit as they shrink their headcount. The belief that profits and growth = jobs will soon be recognized as twentieth century thinking.
2. Automation. Spiffy tools, reuse, AI...no matter how you slice it, your skills are getting pushed into the shared stack every day.
3. Internationalization. You might be surprised to find out that there are React coders in South America that have all the right tats and piercings, read HN and Blind, bang on leetcode...and will work for 1/5 what you will.
The only question is how many people leaving tech presently will never be able to get back in, or maybe they just realize driving a Fedex truck for the same money is less stressful.
Also don't be too spooked by layoffs so far, its just beginning in tech and finance and this wave still hasn't hit the huge cohort of permanently cashflow-negative startups somehow still clinging to life...they will ALL be gone.
To balance this, particularly your last paragraph I have the opposite viewpoint. The US government had ppp loans that were forgiven completely that effectively paid companies per employee. There was no reason not to over hire for a long period of time. We have a correction but that seems to be it. Even now the quarterly earnings statements have lines that they expect headcount to grow in future quarters (meta for example stated this bluntly in their Q3 report). So while cash flow negative startups with no future will close that's it. The market is starting to come back and this was really an understandable blip.
> To balance this, particularly your last paragraph I have the opposite viewpoint. The US government had ppp loans that were forgiven completely that effectively paid companies per employee. There was no reason not to over hire for a long period of time.
PPP loans were based on 2019's average monthly payroll[1]. They did not have an effect on hiring decisions.
I'd like to see more brilliant minds from tech explore other industries, especially the trades. It is incredibly difficult to find competent and trustworthy tradespeople at a reasonable price today. There is so much that a former SWE could bring to the table that doesn't necessarily mean being the tradesperson themselves (though that would be great). The trades desperately need manpower on all fronts.
The trades are underpaid. If you have other options why would you tear your body up so people can get services "at a resonable price"? Think about how people in the trades feel seeing people who work from home make multiples of their pay.
I'm not sure what you're advocating for here. There are many brilliant people doing trades work. Just as there are many brilliant people teaching, or digging ditches, or tending bar, or working as security guards, or...
Talent is evenly distributed, but opportunity is not.
> I'd like to see more brilliant minds from tech explore other industries, especially the trades. It is incredibly difficult to find competent and trustworthy tradespeople at a reasonable price today.
Ok so your pitch is that other people (not you) should go into "the trades" and charge less than the people who are there now?
Wanna give us an example of what a "trade" is, what you're being charged for it, and how much you'd like to pay?
Sounds great if there’s some way to raise compensation for tradespeople to the level it should be at, considering how critical they are to modern society.
companies are finding out that people who are paid 1/5 tend to do much less work and draw out contracts. I have seen many projects grind to a halt working with international 3rd party vendors.
Something that may help defend against #2, if perhaps only temporarily, is to move to niches of software engineering that are more difficult to automate and have higher bars to entry. Things like kernel code, GPU drivers, embedded work, etc are much less LLM-friendly than say Wordpress plugins.
Yeah exactly if anything we're seeing the beginning of the disintegration of the big monoliths (Google at least) who hoovered up everything in their path.
VC investment has ebbed, that's true. But maybe it will encourage businesses with a more solid path to revenue --even self-bootstrapped -- less hype, and more practical product oriented engineering. We can hope.
I do think a lot of us may end up out of work. Myself included, maybe.
The ZIRP thing makes no sense, very few tech companies were funded by loans besides a bit of convertible notes here and there. Funding for small to medium companies was from VC and acquisitions, bigger tech was funded by stock appreciation and massive profits.
Interest rates have many 2nd order effects, including VCs getting more funding from their LPs, and future-looking stocks becoming a more appealing investment class. Its not just about loans.
I believe the idea is not that companies were being funded by loans. It's that investors couldn't get a return on savings, so all the money they would normally have in saving like deposits was invested elsewhere, into the VCs for example.
Sure. Personally, I believe San Francisco restaurants (for example) had less ability to bid up salaries in a highly-competitive labor market while using generous endowments from VCs flush with cash in a ZIRP climate in order to weather many unprofitable quarters the way that San Francisco tech unicorns like Uber and Twitter did. I believe that San Francisco restaurants, like restaurants anywhere else, cannot survive more than a few unprofitable quarters. Besides restaurant workers, I believe this applies to education workers, retail workers, and many healthcare workers who nevertheless have to compete in the same city as tech workers for: housing, food, services, etc. I believe that contributed to the income inequality which we already know grew in San Francisco over this period. Moreover, I believe when housing prices tilt upward dramatically in the way they did in San Francisco over this period, people at the bottom margin predictably will fall off of that margin. Some of them will become homeless, and homelessness tends to intersect with substance abuse.
That's what I believe tends to happen when one group of people (let's say, "tech workers") have salaries wildly divergent from everyone else who lives in that place. But, maybe I'm wrong. Maybe everyone benefits equally when only a subset of people get very large salaries. I dunno. What do you think?
It's hard to predict the future. All I can say is that these are forces pushing in various directions, creating tendencies. Personally, I would say ZIRP is a factor in income inequality, but not the only one. There are others:
You forgot the part where a lot of these big companies are still making buckets of cash and now those buckets are distributed amongst fewer people within the company further straining inequality, especially considering investors are generally rewarding companies for their reductions in force.
10,000 software developers losing their jobs in SF or Palo Alto are not going to make either of those areas affordable. Facebook's stock increasing in value 175% in 1 year is likely going to push some engineers into home buying compensation territory and the ones that can will start bidding wars for houses.
I'm not actually taking too much of a side here but its interesting how you view the ZIRP and VC industry as drivers of inequality as if VCs throwing enough money at startups so that some late 20s/early 30s person can make 180k/yr (plus some largely valueless equity) is the real problem. If anything VCs have made capital accessible to a class of people that would have otherwise been kept out of the party. During downturns and high interest rate periods, incumbents and bigger companies do well as they can weather the storm and buy up more of the market at a discount.
Even if you could drive up the interest rates to the point that these "generous endowments from VCs" and large companies cease to exist, the restaurant worker in SF won't start thriving. VC funding subsidized a lot of people's lifestyles in SF including the restaurant worker. There is not a substitute for building more housing.
>You forgot the part where a lot of these big companies are still making buckets of cash
I can't forget something that's not a fact and wouldn't be relevant if it were. A lot of companies did make a lot of cash. Also, a lot didn't. Moreover, revenue is not profitability. Generally speaking, unprofitable firms will find it harder to survive than profitable ones will, without financing.
> you view the ZIRP and VC industry as drivers of inequality
Who ever said that was my view? I never said that. What I said in another comment is that ZIRP and VC funding are were factors that contributed to income inequality. As someone who benefited from that arrangement, I would like to believe otherwise. Unfortunately for me, I don't. Give me a good reason to and maybe I will.
have seen increased profit and profit margins over the last year as well as huge increases in their stock prices. Not sure how you don't find that relevant in a discussion about income inequality but I also don't find anything else you said very compelling.
This isn't a thought experiment you have to run, there is actual data. All things considered VC's and high salaries for workers willing to take on risk has generally been good for SF. Look at other areas with similar politics and no VC funding and you don't see restaurant workers thriving. Portland's inequality has gotten worse and the livability for service workers has gone down even though its not a major benefactor of VC funding or ZIRP. If you removed all VC funding from SF, a lot of those restaurant jobs disappear. Tech workers making a middle class living off of investment money shouldn't be demonized. SF leadership and housing policy is your issue.
Let's put aside making and taking things personally, shall we? One way to do that is by sticking to the relevant facts, so here's a relevant fact: two of those three companies aren't Bay Area companies. All three of them aren't even San Francisco companies. I think that's relevant if we're talking about San Francisco.
> All things considered VC's and high salaries for workers willing to take on risk has generally been good for San Francisco
That's a matter of judgment. If, say, a SFUSD teacher makes a different judgment because she has to commute from Tracy, I'm not going to say she's wrong.
> Tech workers making a middle class living off of investment money shouldn't be demonized
Who has demonized them? I haven't. I haven't made a moral judgment about this at all. I'm just arguing that economic policy and conditions tend to lead to predictable outcomes, and if we want different outcomes we should choose different policies.
Yes. Homelessness in San Francisco tended to diverge from the national average over this period. So did San Francisco housing prices. This was the period of many unprofitable Bay Area and San Francisco unicorns.
Now, I shared my beliefs. Let's hear yours. What do you think happens when one group of people like tech workers in a city is handed large salaries that are not constrained by market forces like profitability? How does that help someone in that city who is not a tech worker?
Correlation doesn't equal causation. Having lived in SF during that period, there was a lot of governmental policy that contributed to that rise in homelessness. Saw the same thing in Oregon: homelessness increased when housing prices increased but there was also measure 110 which decriminalized all drugs. SF's similarly lax policies probably have more to do with their homeless issue than their housing prices. If it were purely housing prices, these people would just move to somewhere cheaper. And before you say, they can't move, they surely could move into Oregon when meth became de facto legal.
For a lot of addicts, the criminal justice system is their only chance at substance abuse help (mostly because they won't seek it on their own on the outside as we've seen in Oregon).
I know, but I wasn't asked for causation or proof. I was asked for data, or evidence. Presumably, I was being asked for evidence consistent with my hypothesis and unlikely to have occurred by random chance. That's what I gave.
Besides which: I never claimed that this was the only factor. I claimed it was a factor. Elsewhere, I acknowledged that there are other factors. I'm sure the the Oregon policies you list are among them.
Everybody not-tech and many tech did move to Sacramento and Oregon. They must have missed all the locals there screaming about getting priced out over the last half decade.
Layoffs and back-to-office mandates are the best thing that could happen to SF.
And homelessness is out of control in Sacramento, arguably worse than SF. But, I'm sure that has nothing to do with the influx of people and rising housing costs
Real income inequality comes from wealthy 0.01% bribing politicians.
Not 0.1% VC giving some money to 10% developers so that we can get some innovations every once and then.
Getting rid of VC money will just slow down innovation, entrenching existing players in their current positions and allowing even more capital to flow into bribing politicians.
Politicians in turn will need to steal even more, through inflation and taxes the really wealthy can avoid, from the middle class.
We'll shrink the middle class even more.
Almost nobody will be able to afford a house.
Homeless will just die.
One step closer to current South America, which I reckon is some 20 years away for the USA and maybe even for Europe.
If an "employee" is getting paid with borrowed money, for years, and the money will never be repaid, because the "employer" has no profits, because the "business" is a farce, is that really a "job".
Perhaps clients and customers will not pay for whatever it is these "employees" do, but investors will pay, so yes, it's a "job" burning someone else's money. However this only lasts for as long as there are no other, more attractive short-term investment options.
2013: Was flown to EU country for an interview, accepted, they handled the immigration paperwork (mostly) and helped me find a place and get settled. Plane trip was at my discretion.
2015: Immigrated to US with same company, they handled the visa and gave me help to find a place and get settled. Plane trip was at my discretion.
2018: Accepted new job in US, visa was handled however plane trip was 3am in the morning out of Gatwick.
2021: Accepted new job in US (after leaving the US for 3 years), visa was handled but I had to pay for my own plane trip. No help with finding apartments or any relocation expenses.
2022: Accepted new job in US at FAANG, work permit was handled however visa was not, all expenses to get the visa came out of my pocket (plane tickets, hotel accommodation, embassy appointment). No relocation help or expenses.
2023: Accepted new job in US, all work permit/visa issues came out of my pocket including the fee paid to the lawyers for handling the visa application. No relocation help or expenses.
Not sure how much further this perk can slide.