That’s a lot of biotech layoffs in a very short span of time. Stressful times and I hope those impacted will find alternative employment.
I see cashburn as being the common reason across most of these layoffs. For tech, I was initially hoping that things would be flat in Q3/Q4 but with what Powell will do I think we’ll see companies with poor business models in trouble for the same reasons - cash burn becoming amplified with not enough rev growth.
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兔死狗烹
When the rabbit dies, cook the dog.
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Gap Is Cutting 500 Corporate Jobs
Apparel retailer is laying off staff at its offices in San Francisco, New York and Asia
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Layoffs are especially tough on H1B’s. Two horrifying tales, both from the Bay Area:
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H1Bs are being too aggressive. The conservative ones rent and stay in the same job till they obtained the green cards.
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That is the only way to survive lay off H1B issue. Rent until green card !
Green card takes forever from India. Last I knew, it was 8+ years. Chile was <1 year. Watching an engineer from each country discuss the differences just highlighted how insane the process is. They were literally doing similar work at the same company.
Nowadays, for India , China - where large crowd is there - takes 12-15 years.
9-11 changed GC process hard, Trump stopped processing employment based green card during his 4 years. He allowed family based green cards only.
After Biden came they started working on backlog.
Remember year 2001-2003 more than 500000 H1Bs left Bay Area like this mass lay off.
Now, New H1B is lottery. If someone gets lay off, they need to get out of country within 30 days .
Next H1B comes by coming Apr 2023 only even if new company hires them.
With this H1B lay off means, get out of USA!
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Unemployment rate still at 3.5%. So, nothing has happened yet. When it goes to 6%+ is when things will feel ugly.
Btw, doesn’t look like the Fed will raise Interest rates enough to cause a recession because of political reasons, but recession might happen in spite of the Fed due to underlying economic conditions.
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Many companies do have a rule of 1 year minimum year in another company before they consider the former employee back. That might create a problem for many employees to go back to their former employers.
FEDs will not openly say they raise rates that will have recession, that is management/strategy to avoid issues from congress.
FED has already raised rates to the level of recession, they planned to go another 1.25% (may be Nov 0.75% and Dec .50%) that is more than enough to go on recession.
Since recession is possible, stocks are going down and down as many sell the stocks, keep the cash on sidelines.
If the person is H1B, it is direct get out of USA - as of now. Getting a next H1B visa is not going to happen until Apr 2023 (and that too lottery methods).
If it is GC or citizen, no issue, they will simply go for next job.
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According to some well known economist who has been right recently in comparison to the FED which has been wrong, rates need to go to 5.5% so @1% above what FED has said it would go to.
Since, FED has been wrong recently and this guy has been right, my money is on this guy.
In reality though my view is, FED will not go beyond 1.25%(because of its political masters), but due to this decision economy will suffer in terms of stubborn inflation long term, at which point even worse decisions will have to be taken.
Again, I hardly know much about Economics, just some terms and some basic books, so my views are based on the views and credibility of Economists who have been correct lately.