Sorry, that contains a healthy dose of "trust me, all managers are complete idiots who would rather spend a million on hiring new people than spend 10k on retaining their employees".
Empirically this view is valid.
The managers themselves don't even need to be stupid. A bad incentive structure (or even interaction of locally-reasonable ones) might reward bad behavior.
Most people think their own contributions are invaluable, and when they or someone in a similar position get laid off, that challenges that self-image and the obvious explanation is: their perception is completely accurate, but the others are idiots and cannot see it, or they see it, but are ruled by perverse incentives that make them kill the company instead of doing The Right Thing (i.e. keeping and promoting the employee).
It's understandable, but I don't see much value in that line of thinking.
It may not work out well for the employees, though: once everyone stops pretending to care, the companies will be less worried about someone else giving you a better offer, so your negotiating leverage may just go down the drain.
Company being just a big bag of people - at different levels, there are all sorts of different incentives going on.
They don't need to be stupid to make decisions that do not benefit companies they work for. They might just read incentives they operate under right.
Managment greatly enjoys the feeling of power they have over people and I don't think it is absurd to say that they are fed up with the current dynamic that takes part of this away from them and are firing people just to create an atmosphere of fear.
But it's been that way forever in tech companies: SWE make enormous amounts of money and can control their work + environment a lot. In the world where corporations function like torture dungeons and managers are running around looking for opportunities to satisfy their sadist urges, how would the boom cycles ever happen where employees get whatever they ask for and 5 years of work straight out of university can get you enough money to retire to a modest life without ever lifting another finger. Managers are all bipolar? Do they have meetings where they coordinate when to lure the people in and then all release their hate at once for maximum effect?
That just doesn't make a lot of sense to me whereas the cyclic nature of the economy and the external stimulus through a) everyone being in their homes a lot more because of the pandemic, and b) money pouring in like crazy because of the central banks explains both the aggressive hiring (during hard upswings and cheap money) as well as the trimming (during downturns and less cheap money).
If it's one company, sure, it may be because of some manager hating people. But pretty much all companies with the exception of Apple (so far, and who also only indirectly employs a lot of their people, so they don't fire them, they just terminate the contracts with their employers, who then fire them)? That would need coordination beyond "monkey see, monkey do".
Founders aren't your typical managers. The boom cycle you talk about started with Google paying ridiculous amounts and giving everyone huge nice benefits, and then others had to start matching that to not get all their best programmers stolen by Google.
But today there is no longer a founder led giant who is applying pressure here, so likely things will normalize over time back to 90's early 00's, where programmers were paid more like engineers instead of being a class above.
Unless that changes rapidly, I don't think we'll go to "developers make slightly more than the national average".
You missunderstood, I was talking about founders not following the normal management culture, so they do things like "pay our people twice the market rate so we can get the best people!", no regular manager or CEO would do that, and that is how for example programmers could start earning so much more than engineers.
> I don't think we'll go to "developers make slightly more than the national average
That isn't a quote. I said similar pay to other engineers, not everyone. Engineers makes more than typical people.
> there's a lot of stuff to do where you need developers and only so many developers to do them. If you want yours done, you offer more money so developers do them for you.
This was true in the 90's as well, Microsoft was the richest company on earth yet they didn't pay all their programmers significantly more than the typical market rate for engineers. The fast rise in salaries started when lots of companies started to copy Google in the late 00's.
But that's literally what Wallstreet Banks and Hedge Funds do and have done for decades, and they're the definition of all things not cool by being a cross between MBAs and lawyers. Even when they needed to be bailed out, they maintained their high bonuses because "otherwise you can't keep the best people".
It's also what you'd expect to happen whenever a resource is limited and there's more demand than supply.
> The fast rise in salaries started when lots of companies started to copy Google in the late 00's.
That's because suddenly the demand for developers exploded, not because Google did some magic trick though. In the 90ies, and especially at Microsoft, having developers do stuff for you was nice and all, but it didn't convert into cash quickly and at scale. When the first dotcom boom came, that changed, and suddenly startups paid large sums. Google continued doing so because they needed to grow to capture more of the market / capture more markets.
This has certainly not been true since for ever and is only partially now. Only a small minority of developers make enormous amounts of money and there are plenty of shitty companies that do not give you any control whatsoever.
That being said, I do not disagree that part of it is due to the boom-bust cycle of markets, but yeah, managers "coordinate" in a sense that there is a zeitgeist and a common understanding of what the atmosphere is.
They hired people when it was beneficial (note that I am not using the word "profitable" here) for them to do so and now they are firing because that is the new beneficial thing. Keep in mind that managers do not pay you out of their pocket.
A pure market-driven downsizing wave usually touches the C-level too.
My company and other SMALL businesses I know retain productive people through good times and bad. There's some shared pain in those bad times, and shared upside in the good. Why? Because we're human beings, in a small tribe, and we care about each other.
This falls on deaf ears when I'm interviewing and candidates want the prestigious name on their resume, or a game room in their office, or mega-benefits small businesses cannot provide.
I've had two productive employees leave my small business for big corporations. Two came back. One started their own small business.
What does your business do? And are you hiring?