I'm just old enough to have witnessed the dot-com crash a few years before I went into industry; this feels very similar. In fact, it feels a little less intense; the dot-com crash was about an entire business model consolidating under an absolute handful of winners (example: most independent online stores went "We can't compete with Amazon" and bankrupted, laying off everyone) while this one seems to be a lot more "All these firms will continue to operate but they don't think they need to employ this many people to do it."
It will be interesting to see if the consequence is new startups competing with the incumbents as those laid off find each other and some capital or if the consequence will be something else.
This is right. The dot-com crash was an absolute crash. Not "we're laying off 5-15% of our company." It was a lot of "This media darling that had an IPO after 2 years of operations no longer exists."
In my social group of about 30 folks, I think at ~25 of us all experienced months of unemployment, at the least.
This, think companies going out of business left and right. Not 5-15% layoffs after the company doubled or tripled in size over 2-3 years.
Almost no one I knew worked right through it without being impacted, and some people had huge impacts. I worked as a contractor for 2 years afterwards before getting back into a startup. I knew some people who were out of work 6 months or a year and came back with huge pay cuts.
Tons of people I knew ended up with furniture and servers in their house they took when the company closed and management/investors didn't want any of it.
I was lucky enough to grab a new position through someone I knew fairly quickly. But, in the month it took for the company to actually extend an offer, I didn't have so much as a nibble from anyone else. And I definitely knew people who just got out of the industry.
Yeah; its really important to keep in mind that in the majority of these layoffs, these companies are still employing at or above the number of people they were in Dec 2019. This isn't a business model correction; this is a "free covid money" correction. Everything that is happening was predicted by economists the moment the government started writing billions in checks during 2020; the fact that its only 10% in most cases, and hasn't substantively spread beyond Tech and Finance, is actually extremely good news, not something to feel dread about.
Yeah this is more of a downturn where successful companies are laying off a percentage- the dot com bust was thousands of companies just ceasing to exist overnight. Not really entirely comparable.
One notable contrast I see is that many of the dotcoms which failed had been predicted years in advance based on poor business models where they had no plausible way to make a profit. There are some companies like Uber which are struggling with that but most of these are profitable & won’t be leaving room for newcomers.
Related to that last thought, a lot of people bailed out into Boeing corporate jobs. They didn’t have Aeron chairs but they needed a lot of IT workers as they moved more online. I’m curious how that’ll go now where that process is much further along and things like cloud services have been soaking up geeneric demand.
I'm just old enough to have witnessed the dot-com crash a few years before I went into industry; this feels very similar. In fact, it feels a little less intense; the dot-com crash was about an entire business model consolidating under an absolute handful of winners (example: most independent online stores went "We can't compete with Amazon" and bankrupted, laying off everyone) while this one seems to be a lot more "All these firms will continue to operate but they don't think they need to employ this many people to do it."
It will be interesting to see if the consequence is new startups competing with the incumbents as those laid off find each other and some capital or if the consequence will be something else.