Hey there. I’m Diamond Naga Siu, a senior reporter on Insider’s tech analysis team. I specialize in tech careers and write the daily 10 Things in Tech newsletter. I’m here to chat about tech layoffs, so feel free to AMA!

thisisinsider · 2024-02-18T21:10:05+00:00

TLDR:

Joe Biden, now 81 years old, is facing criticism that he's too old to be president again.
Some Democrats worry he'll repeat Ruth Bader Ginsburg's mistake and refuse to step aside.
Whether Democrats would be better off with a different candidate remains unclear.

thisisinsider · 2023-03-10T20:45:28+00:00

From the article:

Brent Schutte, chief investment officer, Northwestern Mutual Wealth Management

"I see today's news as somewhat of a warning to the Fed that their actions have impact," Schutte told Insider. "It's possible that this could convince them to slow down their pace, especially if concerns grow about other regional banks with exposure to the tech space. Tech is incredibly important to the to US geopolitically, so this failure may raise broader concerns for policymakers.
"Importantly, we don't believe this is anything like 2008-09. The largest and most systematically important banks have been heavily regulated and stress tested for years. However, to me this is a warning to the Fed about the impacts on a forward basis that their aggressive rate hikes are having."

thisisinsider · 2023-02-16T21:57:47+00:00

Yiken (Certified) *is* my fave song from Priceless Da ROC!!

-DNS

thisisinsider · 2023-02-16T21:50:48+00:00

Hey! This is a pretty big question. There are a few main factors fueling these layoffs, but the driving factor is that companies are trying to recover from their pandemic-fueled hiring sprees.

During the pandemic, tech companies were seen as way more valuable (on the stock market, with record-high prices) due to the sudden, virtual nature of everything. But now that people are increasingly in-person, their stock values (and thus their company values too) have gone down.

When things were really good at tech companies, they were paying top dollar for talent and staffing up at ridiculous rates. But they grew too much too quickly, so many are now downsizing.

But! Here’s the plot-twist — do these massive companies actually need to lay people off to become profitable? Probably not. But these massive cuts appease investors who are getting nervous about their investments not making them as much money.

To be ultra-clear, companies are still profiting. They’re just not profiting as much as Wall Street would like. So when one company is making cuts, it’s easier for other companies to justify doing so too.

Headcount change versus stock price change is a pretty good indicator btw of possibly predicting whether a company might cut headcount. I made this chart last year, but it remains a relevant metric: https://www.businessinsider.com/chart-shows-most-unsustainable-tech-company-compensation-plans-rsus-equity-2022-5?utm_source=reddit&utm_medium=social&utm_campaign=IAmA-comment

-DNS

thisisinsider · 2023-02-16T21:32:19+00:00

Hey there! This is a bunch of questions haha, so I’m going to break it down with a bullet or so for each q

- I saw that article too. And it definitely matches up with what I’ve heard from my recent chats with recruiters.

- There are definitely negative impacts of these layoffs. And we’ve already started seeing that across companies. I think Twitter is an extreme but perfect example of this: things are breaking on the front-end, employee morale is pretty low, and entire (vital) teams are missing.

- The experts and tech industry people who I’ve chatted with have pointed a few major long-term shifts. Most notably, there’s a focus on efficiency over innovation (like how multiple Big Tech companies have shuttered their moonshot branches). But at the same time, they can’t ignore how the tech industry keeps innovating. Generative AI (thanks to ChatGPT) for example is a curveball that they definitely weren’t prepping for a few months ago. Yet a lot of these companies are now scrambling to react to it.

- I totally agree with your concerns. Cloud is getting hit pretty hard right now, and it ties back into your question about the negative effects of layoffs — this is definitely one of them. Within Big Tech alone, cloud spending has decreased a bunch (my teammate Paayal Zaveri wrote about it here: https://www.businessinsider.com/microsoft-amazon-google-cloud-business-lower-spending-growth-slowed-charts-2023-2?utm_source=reddit&utm_medium=social&utm_campaign=IAmA-comment) And it’s especially pronounced since digital transformation was such a buzzword during the pandemic tech boom. But optimistically, this cool-off likely won’t last forever. Microsoft CEO Satya Nadella even predicted that the sector could rebound as soon as this year: https://www.businessinsider.com/microsoft-ceo-earnings-azure-slowdown-cloud-bounce-back-2023-1?utm_source=reddit&utm_medium=social&utm_campaign=IAmA-comment1

-DNS

thisisinsider · 2023-02-16T21:08:38+00:00

I’m so sorry to hear that your family member was recently laid off.

This is definitely a tricky situation. I would advise people in this situation to acknowledge what the company said but to push back on that narrative applying to them — basically let your work speak for itself. Companies can say what they want (especially to appease stakeholders) but they can’t take away the work you’ve accomplished.

Here’s an example of it happening to former Reddit employees: https://www.businessinsider.com/reddit-job-cuts-employees-livid-company-painting-them-low-performers-2023-2?utm_source=reddit&utm_medium=social&utm_campaign=IAmA-comment

And to avoid getting low-balled — regardless if you’ve been laid off or not — do your research! There are a bunch of resources out there to help you find out how much you should be paid (levels.fyi, Insider does salary stories, Blind, and even job listings themselves after salary transparency laws). But I’ll also caution that compensation is starting to look much lower than before, given the tech industry turmoil (here’s a story my colleagues did on this btw: https://www.businessinsider.com/workers-laid-off-in-big-tech-have-to-take-jobs-with-less-pay-prestige-2023-2?utm_source=reddit&utm_medium=social&utm_campaign=IAmA-comment). So definitely just do as much research as possible and make sure that you keep advocating for yourself.

-DNS

thisisinsider · 2023-02-16T21:02:12+00:00

Hey there! Great question. I definitely do think people were pushed — there’s even evidence of it happening at a bunch of companies like Google, Facebook, etcetera. Some of these companies implemented harsher performance reviews and set a mandatory percentage of employees who needed to be put on performance-improvements plans (aka PIPs). PIPs are often a first, required step before being fired at many companies.

I reported a story with my colleague Kali Hays about how this practice is really beneficial for employers, while hurting workers: https://www.businessinsider.com/big-tech-using-quiet-layoffs-helping-companies-and-hurting-workers-2022-10?utm_source=reddit&utm_medium=social&utm_campaign=IAmA-comment

And here are some company-specific stories from Insider about what this looks like in practice:https://www.businessinsider.com/google-layoffs-performance-rating-jobs-2022-11?utm_source=reddit&utm_medium=social&utm_campaign=IAmA-comment https://www.businessinsider.com/meta-layoffs-doubles-target-lowest-performance-ratings-non-regrettable-attrition-2022-12?utm_source=reddit&utm_medium=social&utm_campaign=IAmA-comment

-DNS

thisisinsider · 2023-01-13T17:32:42+00:00

I'm actually not too sure here. I'll have to do more digging before I can give a coherent response to this. - PR

thisisinsider · 2023-01-13T17:24:02+00:00

I do try to make my reporting as original as I can, and i do that by talking to experts, execs, and founders in crypto industry. The FTX saga is indeed widely covered now, but it's still important to cover, and worth reading and writing about.

That said, I'm still working constantly to dig into new projects, storylines, and people in and around markets and crypto. -PR

thisisinsider · 2023-01-13T17:19:16+00:00

Hard to pin a number on it. But Bankman-fried faces a potential 115 years in prison if he's convicted on all charges. Compare that to Madoff, who faced 150-year sentence.-PR

thisisinsider · 2023-01-13T17:17:03+00:00

Chicken - PR

thisisinsider · 2023-01-13T17:16:51+00:00

I'm actually not too sure about tokenized stocks. There's not been that much reporting done on it, but it's possible more intel emerges over time. stay tuned. -PR

thisisinsider · 2023-01-13T17:15:36+00:00

Good question. FTX had their investments in an extremely broad and diverse range of companies, and they (meaning SBF) also had deep ties across Washington DC's political landscape, on both sides of the aisle.

SBF has said that he made millions of dollars in donations to the Republican party using "dark money" pathways, and it's possible those funds won't be something that can be tracked down.

As far as FTX influencing US markets via financial crimes, I haven't seen much about that, but at this point nothing would surprise me. There's been new reporting coming out on almost a daily basis for months now. -PR

thisisinsider · 2023-01-13T17:11:59+00:00

Great point. I was talking to a lawyer about this exact thing recently, and he said he's never seen a financial case move this fast, let alone one this massive and complicated.

I don't know why or how it happened so quickly, but it's unprecedented in many aspects. -PR

thisisinsider · 2023-01-13T17:10:37+00:00

Simply put - a lot. This goes back to trust. Trust had already been shaken in terms of crypto's value as an asset during 2022's deep bear market. But that trust was rattled further when Three Arrows collapsed, then other smaller firms, and then FTX.

It's one thing to see your portfolio crumble during a down year for assets. But it's an entirely different thing to feel like you've been cheated, or to learn your funds were being used for various things you didn't agree to, as in the case of FTX.

Trust is a critical component to markets, and when something like FTX's collapse happens, it can take time to rebuild. I don't have an exact forecast, but it won't happen overnight. Retail investors especially will need a reason to trust crypto companies again. And if those firms can't be trusted, that also sets back progress for the underlying blockchain technology.-PR

thisisinsider · 2023-01-13T17:06:50+00:00

I have not read or heard anything about this. But certainly food for thought. - PR

thisisinsider · 2023-01-13T17:06:19+00:00

I have not - But I will! - PR

thisisinsider · 2023-01-13T17:05:56+00:00

Regulators have accused SBF of orchestrating a years-long fraud, so the experts and legal teams seem to say there was bad intent there.

The new leadership at FTX, John Ray III in particular, has leveled claims at SBF and co. that they were wildly inexperienced in management and bookkeeping, which seems to make sense considering how young they were, relative to the ages of other financial firm's CEOs.

To me, it's hard to think that a math genius from MIT with Stanford professor-parents was unaware of so much that happened in his own company. No one has accused SBF of a lack of intellect. The guy is very smart. - PR

thisisinsider · 2023-01-13T17:01:27+00:00

There is certainly plenty of blame to go around -- we can look internally at FTX and Alameda first. Sam Bankman Fried's 2 top deputies have already admitted to wrongdoing, and I have yet to speak to anyone who believes Sam when he tries to deny the criminal allegations against him.

But then we can turn to of course the many, many high profile investors and companies that invested in FTX, and trusted them. Where was their due diligence? Why didn't they see or acknowledge red flags? (Unless FTX was that good at hiding them).

And we can turn to media too - major outlets touted FTX as a blue chip crypto company, a beacon of trust in the "wild west" of crypto, and then many outlets wrote about Sam Bankman-Fried as if he was some sort of precocious finance prophet.

The blame can be pinned wide and far, but I think the fact that SBF faces up to 115 years in prison if convicted of all charges says enough about where the lion's share of the blame may end up going. - PR

thisisinsider · 2023-01-13T16:56:43+00:00

Thanks for your question here! This goes back to trust -- many everyday traders and institutional players lost faith in cryptocurrency. Perhaps not as an asset in a vaccuum, but as an industry due to the shaky series of events over recent months. But even before FTX imploded, there was a deep bear market over 2022 for digital assets that saw market caps for the most popular tokens all crash.

It looks to me like rebuilding trust will be key to the future of crypto. You will have plenty of very bullish and optimistic crypto investors still, but I think that group has shrunk since a year ago.

Interestingly though, if we look at the biggest cryptocurrency, bitcoin, while it's down 55% over the last 12 months, it has actually rallied about 12% in the last five days. Its possible that bitcoin and eth, the second largest crypto, could rally alongside traditional equities regardless of trust in the sector, so maybe if a bull market gets underway there could be some upside for certain larger tokens. - PR

thisisinsider · 2023-01-13T16:52:19+00:00

One downstream impact is likely to be fewer Wall Street firms/banks getting involved with crypto. Already, we have seen the repercussions of FTX's collapse hit other crypto exchanges, and that gives a cautionary tale for traditional finance. The Federal Reserve recently warned financial institutions about investing in crypto, and though they didn't mention FTX by name, they said "contagion risk" stemming from poor oversight among crypto companies pose a risk to banks.

Increasingly, investors and users are questioning the safety and trust of companies and tokens, even companies that have been around for a relatively long time. FTX was so embedded with so many different crypto companies, it's hard to know where its financial influence stopped.-PR

thisisinsider · 2023-01-13T16:46:06+00:00

There's been a recent push for "proof of reserves" audits among crypto companies, but that's been criticized quite a bit because it mainly provides a snapshot of a firm's finances at 1 specific point in time, and it also doesn't include intel on liabilities, which can make it look misleading.

And, it doesn't show anything about whether customer funds have been commingled with company funds, which I think is a key part of your phrasing, "something like this," with FTX.

Industry experts are still trying to figure out what can be done differently. The ones I've spoke to recently tell me they are doubling down on transparency (i.e. proof of reserves) but I don't really think that's reassuring in terms of public trust.

As far as institutions go, like Wall Street firms, one hopes that they will certainly be doing greater due diligence before getting involved with a crypto exchange. And that goes for media outlets too -- hopefully more homework happens before we see any more glowing profiles of young founders who take high profile meetings while wearing shorts and playing video games.-PR

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