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Comment by ravingraven | Hacker News Reader

For many companies this is counter-intuitive but true. Companies (just like people) are not fully rational economic actors. A lot of the decision-making in companies revolves around power-plays and revenge. Managers fire people they don't like or they feel they do not have leverage over all the time. In a sufficiently large team/company, it is trivial to portray a good performer as a bad one and vice versa. Managers (including CEOs) are just as sexist/racist as anyone and do promote based on biases and personal feelings.

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.

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> 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".

> 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.

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.

But that boom cycle worked for much more than a decade, and it was very similar in most large tech companies. I don't think that devs are paid differently because founders are developers as well and want to promote their own, but rather: 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.

Unless that changes rapidly, I don't think we'll go to "developers make slightly more than the national average".

> I don't think that devs are paid differently because founders are developers

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.

> no regular manager or CEO would do that, and that is how for example programmers could start earning so much more than engineers

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.

>But it's been that way forever in tech companies: SWE make enormous amounts of money and can control their work + environment a lot.

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.

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