alt Hacker NewsIn companies like the oil industry, doubling productivity would mean reducing the expected life span. Costs tend to catch up with profits, especially due to taxes. Layoffs happen inevitably.
Is it the same with tech? Facebook has 3 billion monthly active users. No amount of tech will bring that up to 6 billion. If you were to double the amount of time someone spends on Facebook, or double the ads they see or double the click through rate, what does that really mean?
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Yeah, even if Meta engineers gain 90% increase in productivity, I doubt Meta can increase revenue by 90% more than previous environment. There’s just a cap to how much time people want to spend on social media.
I think most companies are making the right call by downsizing instead of staying same size. Let people go to where there is more potential for growth.
That's assuming a company is constrained, to not expand its portfolio.
Taking the example of Facebook. They are in social media, messaging, AI, VR/AR hardware and software, a few other things, meta universe whatever that was, now left with the name. Facebook isn't delivering or successful on all its ventures, it knows that, it keeps investing in other segments.
More productivity would mean at least diversifying, they have some of the best engineers, it would make no sense to not simply attempt to hit the jackpot by playing more machines.
What fewer people talks about is that the entire tech industry is tertiary services. Ads, entertainment, communication, etc. If/when hard industries take a hit, tertiary takes a hit. If it isn't clear to you that the overall economy has already started to take some irreversible dents, and that those will accelerate, know that the capital is well aware.
Or we can continue wishful thinking and seek comfort that monetary tightening is just temporary, investments will flow more into tangent ventures and growth is around the corner, the U.S still is and will remain the world's strongest economy.