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Comment by Animats | Hacker News Reader

> Sudden layoffs can also help maintain labor discipline, which a lot of business leaders felt was getting away from them.

It's probably more about that than about cutting costs.

Once sufficient fear has been instilled, the next stage will probably be across-the-board pay cuts.

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> Once sufficient fear has been instilled, the next stage will probably be across-the-board pay cuts.

Not saying you are wrong but it's common knowledge now that the best way to secure a pay rise is to find a new job.

So I expect that a fair number of employees faced with an actual wage reduction in a time of pretty significant inflation will feel motivated or even forced to find new employment. Which in turn will mean that when the firms go to replace those workers, which for the most part they eventually will want to do, they will wind up having to pay a higher wage to attract the same level of talent and competence.

> they will wind up having to pay a higher wage to attract the same level of talent and competence.

Will they?

'glanzwulf here[0] is making a not so tinfoil-hat point that widespread layoffs create an atmosphere of fear. At this scale, the people who were laid off may no longer feel so sure about their prospects of finding a new job quickly - so they might just be willing to compromise for a lower salary, just to secure some job. For the first time since... ever? software developers might experience the job market the way everyone else does - that is, one where employers hold all the power, and employees are happy to take whatever they're being offered.

[0] - https://news.ycombinator.com/item?id=34967091

You are delusional if you think that "everyone" else is powerless in front of their employers. There's many widely unionized profession where there balance of power is between employers and employee is fairly balanced, sometimes more so than software engineering.

My point is rather that the power in software industry was, so far, heavily imbalanced, disproportionately favoring the employee. This is, if not unique, then at least a pretty rare situation.

Unionized professions may be fairer than non-unionized, but compared to software dev pay, unions only turn a shitty salary into merely meh salary.

Sure, tell that to actors.

They'd surely agree - if I made sure to ask all actors (or a hypothetical average actor) instead of just the popular ones.

That includes many people who are on TV or in movies a lot! Most of them are not Tom Cruise and are more or less expendable.

Right. Average acting income for members of the Screen Actors Guild is a few thousand a year. They're all part-timers, really, always looking for the next gig.

You look for new job while you're at old one. There's no risk unless you significantly change the category of company you work for.

People behave in irrational ways like not interviewing for a job they’re not sure they’ll accept. And they certainly have more trepidation about taking a new job now because they don’t want to be the new guy if staff cuts happen and they’re going to scrutinize company stability much more.

That makes sense if you're trying to jump ship, but for unexpected-ish layoffs? Job offers have time limits. Am I supposed to be interviewing all the time, so that I always have some warm offer when I suddenly need it?

> the next stage will probably be across-the-board pay cuts

This doesn’t happen [1] because wages are sticky [2].

[1] https://fred.stlouisfed.org/series/PI

[2] https://en.m.wikipedia.org/wiki/Nominal_rigidity

Now that we are once again in an inflationary environment, simply keeping wages the same amounts to a significant across-the-board real pay cut over a year or three.

They had the foresight to make a lot of the wages variable comp so this is less of a problem.

Er, no.

* Intel pay cut earlier this month.[1]

* Amazon pay cut earlier this month.[2]

* 50% pay cut for new tech hires in India.[3]

[1] https://www.oregonlive.com/silicon-forest/2023/02/intel-slas...

[2] https://fortune.com/2023/02/21/amazon-staff-pay-50-less-expe...

[3] https://www.bbc.com/news/world-asia-india-64728508

The Amazon story is what I’d expect — no nominal cuts but in practice it’s much less than anticipated — but I have to confess that I was pretty surprised at the other two, which are outright cuts.

In practice this is happening a lot through inflation, reduced stock grants, etc.

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