Regardless of where CPI lands tomorrow, my view is that the Fed will hold rates higher for longer than the market believes. Higher interest rates combined with a shrinking money supply (QT), translates to: tighter monetary conditions, a higher cost of capital, less revenue visibility for companies, more employee layoffs and a deeper recession. The … Continue reading Tomorrow’s CPI = Noise
Layoffs Continue To Ramp
Approximately 102 thousand employees have been laid off across the Technology industry in 2023. That figure is 64% of 2022's 160 thousand Tech sector layoff total. If you thought June 2022 was bad from a layoff perspective, November 2022 was worse. If you thought November was bad, January 2023 was worse. My guess is that … Continue reading Layoffs Continue To Ramp
Was Q4 The Bottom For Tech Layoffs?
We recently wrote that there were more Tech-related layoffs in Q4 2022 than during the COVID trough in Q2 2020. Approximately 23% more Tech-related layoffs (73,899) occurred during Q4 2022 versus the COVID trough (60,141), in Q2 2020. There is plenty more room to cut. One thing is for sure - there is more room … Continue reading Was Q4 The Bottom For Tech Layoffs?
Technology Layoffs Continue To Climb
More Technology-related layoffs have occured in Q4 2022 than at the COVID economic trough in Q2 2020 (51,048 employees in the month of November 2022). Technology layoffs continue to mount as: interest rates climb; inflation remains elevated; global demand sputters and; as macro-economic uncertainty remains high. Check out Layoffs.fyi (created by Roger Lee), to track … Continue reading Technology Layoffs Continue To Climb
Tech Company Layoffs Are Rarely “One & Done”
When it comes to Technology companies, headcount reductions are rarely "one & done". This used to be especially true of Bay Area Technology companies which are famous for lacking operating discipline (i.e. cost discipline). However, the Bay Area aversion to running profitable businesses has permeated the Tech sector over the past 12 years of easy … Continue reading Tech Company Layoffs Are Rarely “One & Done”
Tech Layoffs Are Spiking
More than 24,000 Technology sector employees have been laid off month-to-date making November the worst month of the year for layoffs as Technology companies prepare 2023 budgets. Q4 2022 could rival Q2 2020 when more than 60,000 Technology sector employees were laid off. Q4 2022 is tracking at approximately 37,000 Technology sector employee layoffs. Our … Continue reading Tech Layoffs Are Spiking
Sell This Rally
Equity indices have rallied today as reported Headline and Core CPI increased by "only" 7.7% and 6.3% Y-O-Y respectively. Many Technology names are up double-digit percentages today on this macro news despite the fact that many companies are cutting heads (it's not just CRM, LYFT, META, MSFT, NFLX, RDFN and SHOP), given the weak economic … Continue reading Sell This Rally
More Layoffs Are Coming
Inflation, interest rates and OpEx are climbing while demand softens for many companies. One glance at the table below shows that layoffs over the past two months are fairly widespread across industries. We believe that more layoffs are coming as inflation and interest rates rise. Rates will accelerate higher in June should the Fed make … Continue reading More Layoffs Are Coming
Markets Are Poised To Grind Lower
It is going to take several years for the U.S. economy to recover back to 2019 levels. 2019 is a low bar in our view as that economy - much like the present one - was debt-fueled, deficit-ridden and plagued by artificially low interest rates. These factors in the aggregate have stymied sustainable, real economic … Continue reading Markets Are Poised To Grind Lower
Tech Layoffs & The Mythical “V” Recovery
Headcount reductions continue. We have updated our list of recent Tech company layoffs. Access the Excel version HERE. The PDF version may be accessed HERE. It is difficult to imagine a snap economic recovery as companies continue to shed talented people. The mythical "V" recovery would require all components of the global economy to recover … Continue reading Tech Layoffs & The Mythical “V” Recovery
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