Negative job growth at Amazon HQ2

[Anonymous]

Anonymous wrote:

Anonymous wrote:Amazon, like all of the big tech companies, went on a hiring spree during Covid and now they’re actively trying to lay off workers. It’s not because they’re not profitable. It’s because they’re a giant greedy corporation. They have a certain number of people every year they WANT to shed, and that number is too low because hiring is low across all of the tech sector right now. That’s part of why they got so serious about RTO. It was partially because of the things the promised Virginia but also partially to hopefully get people to quit. I know of people who were hired out of state and told they’d never need to come into the office and now they are literally flying in for 3 days at a time to badge in. It’s not about success—just the usual corporate greed.

Covid hiring is one part. The other part is interest rates. Many tech companies relied on funding fueled by the low interest rate environment. Now that it's gone their funding has dropped, forcing tech companies to shed expenses. The mass layoffs in the tech sector gave Amazon cover to follow suit.

A big factor driving stock price appreciation for Tech over the past 15 years was the ability to borrow cheap for buybacks. This ensured that their compensation model would not dilute shareholder value and is significantly more tax efficient than dividends. Rising rates makes going to debt markets too expensive so Tech companies need to look to cut employee compensation costs.