Pretty bad week for twitter/facebook. Audiences down, stock down. My read on the labor / startup / bubble impact of this shock to the valley.
Twitter has had layoffs before, when it became clear that they would never grow but might remain stable. Twitter is built on a stale stack (scala / mysql, ultimately ruby, write me an angry letter if any of these are your pets) and the people they lose will be a drop in the bucket of the legacy talent pool.
FB will be bigger, especially if the malaise spreads to google. They’re about to make big changes to android which will lose them worldwide mobile dominance, and search quality is in gradual decline, opening them to disruption from the outside.
Remember – FB/G have never done large layoffs before. If you’re a dev at these companies you’ve grown up thinking you’re unfireable; the worst that can happen is getting encouraged to leave by moving you to a crappy silo.
Old finance doesn’t have the slack to hire these and pays much less. New finance probably doesn’t want them. They don’t have the skills for biotech. There won’t be any ad-tech left.
These layoffs will have a market-clearing effect on ‘general programming’ jobs (i.e. smart w/ no domain skills). So if you’re in this sector get out. Be prepared to learn a trade.
(It won’t just be product & engineering leaving, but I don’t know how to evaluate the rest).
Impact on next gen of businesses
For reasons of not wanting to become homeless these people will leave the valley. Stagnant / up-and-coming cities like austin, chicago, and their mexican and canadian counterparts will get an injection of new blood.
Amzn is looking for HQ2? So will every laid-off twitter/FB developer.
These moves will feed the steady increase in demand for remote developers, which will in turn improve the tools and enable other good remote people to get work; this ultimately may lead to a gig work approach and depress wages, but will be great if you’re a person who is selling american-priced services w/ indian cost of living.
Relocations will also be a kick in the pants for VCs, who have been gradually more willing to travel away from large cities to invest. If there’s a year in which halifax has more medium exits than NYC, a lot of people will examine their reasons for living where they are.
Layoff will update tech’s narcissistic self image. Slack just bought hip chat too – you can see this as the newly-cool winning over the never-cool but I see it as same predating same. Twitter starting to look a lot like yahoo / IBM – hordes of depressed and attriting white-shirters supporting legacy tech / declining revenue flows with a big marketing team to sex it up.
Slack isn’t the reality of working in tech – atlassian is much closer. All slack has proven is that it’s willing to eat the old.
Will this trigger or delay the bubble bursting?
This one won’t be like the last one. Tech is more sanely valued than it was; what we need to worry about is ad-pocalypse.
The digital tools we use today are (a) unpleasant and relatively useless (b) loaded w/ ads (c) profitable and (d) people prefer them to what came before. Also ‘software’ businesses are half the time more efficient versions of things that already existed.
There may be interruptions in monotonicity of funding rounds, but that’s always been volatile. Old tech will be disrupted by new tech but we have to be okay with that.
Ad-pocalypse, on the other hand, is the backlash of users against crappy engagement-heavy ad-ridden content. It will destroy FB & google and spawn a hord of maggotty children in their carcasses to redesign mobile, social and search.