(upbeat music) - As you know, there have been lots of layoffs even from the biggest tech companies. Meta laid off more than 11,000 employees, Amazon cut about 18,000 jobs, and Google just cut 6% which is 12,000 employees. And that includes the
31 massage therapists that got let go. The Google employees who managed to avoid mass layoffs may have to continue
doing their jobs without on-site massages. My condolences. Not only is it shocking to see Google lay off 12,000 employees, but the way they did it was also shocking. Let's watch this clip
from a Google employee. - [Nicole] A day in my life
getting laid off at Google. So I woke up to this really
ominous text from my boss and I honestly had no idea
what it was gonna be about, so I called her the minute I woke up and saw this, and she told me to check
the news and my email. So I rushed downstairs to find out that I had lost access
to basically everything. I couldn't log into my email
or even check my calendar. I called my boss back and we just sobbed over the phone because she was also
finding out about my layoff for the first time today too. I started getting calls from
a bunch of my coworkers, and started finding out who
else was let go on my team and some neighboring teams as well. But I think the worst part is that it seems like no one was
consulted on this decision and everyone was just finding out about the layoffs at the same time. It just felt like a really
bad game of Russian Roulette and there was no consistency around who was let go. It was also not performance based, so it just felt really random. - It seemed like there
was no heads-up at all, no conversation with your manager, and the layoffs felt pretty random as it wasn't even based on performance. And then one day, your access to everything gets cut off immediately without communication, just like the way my ex broke up with me. I think a lot of these companies simply overhired and overspent during the pandemic, and are now finally addressing it. Generally, you want to avoid doing layoffs because it looks so bad for your company. But since everyone else is doing it now, it became, kind of like, socially acceptable to do so. So every company jumps at the chance to fire people without the blame for
handling things poorly. Here's an analogy. If you're in a classy restaurant and you're holding the
biggest fart of your life, you're going to want to keep that fart in even if it kills you, because you don't want to be known as the guy who farts at fancy restaurants. But if suddenly, everyone around you is ripping out massive farts, then you don't feel so bad letting one out yourself anymore. Basically, if you fart
alone, you're a villain. But if you fart in
solidarity with the people, now you're suddenly a victim and farting is an act of protest. And together, you can turn
the blame on the food, or the restaurant or on
macroeconomic conditions. Was there anything that these tech giants could have done differently to prevent these massive layoffs? Was there another solution? To even start answering these questions, I think the first thing we have to ask is why these layoffs even happen. I think it all comes down to leverage. And tech companies were over-leveraged. Leverage is a tool, it helps you get more
out of what you have. Leverage comes in many forms. The simplest form of leverage would be to take out a
loan to invest in stocks. Tech startups also take
on a form of leverage. Startups will raise money, spend money to hire more people, subsidize their services, operate at a loss. They're willing to lose money in the beginning for the
sake of growing quickly and capturing the market, even before they figure
out their unit economics. If the startup gets to a
stable state and is profitable, then it's all good. So in this case, taking on leverage was totally worth it. Investors are happy since they made their money back faster. But what happens when you never get to profitability and your business model simply doesn't work? Then you get a startup like Bird, the electric scooter sharing company that spawned dozens of copycats. At the peak in 2019, the streets were littered with scooters. For a couple dollars, you could ride them for 15 minutes. It was an awesome way
to get around the city, if you don't mind looking
like a suburban mall cop. But was it sustainable? Was Bird profitable per ride? No! In fact, it was also extremely dangerous, which caused issues for the company. Let's look at a clip. (light classical music) So you can see why electric scooter
companies get a bad rep. This guy clearly didn't park his scooter back
in its designated area. He just left it there in
the middle of the street! Without the cooperation of the customers, it simply won't work. Also I've never seen anyone walk away so casually after getting
hit by a car before. Anyway, buying scooters
and renting them out was not a sustainable business. But VC money was flowing in and scooter companies
expanded across the country, and even internationally. At the peak, Bird was worth $2.3 billion when it went public through a SPAC. And now, it's only worth $70 million, which means if you invested
$100 when it IPOed, your shares would be now worth $3 today. How did a non-profitable
company get so overvalued? Why did people even buy into that? It's because in 2020, the market was filled with greed. And SPACs were a vessel to
carry through that greed. SPACs were hot shit, everyone wanted to invest in them. Normally, when a company
goes public through an IPO, it must go through a
highly regulated process that often takes over a year. Armies of investment bankers and lawyers comb through the details of your company to make sure they meet
the SEC's requirements. It's an expensive process
in terms of money, time and just pure hassle internally. All that just so that you can penetrate through that SEC tunnel and IPO. But a SPAC can facilitate that process. A SPAC is a company with the bare minimum. A board, a management
team, a bank account. That company zips through the IPO process, and since there's literally nothing, it's a shell company. It's fast and cheap. Afterward, it raises money from people looking to get rich quick, to acquire a private company, like Bird, so they can go public. SPACs allowed companies to go public without the scrutiny of a real IPO. It was the perfect instrument
for Wall Street insiders to get rich by selling
off their shares to us at an inflated price because of the hype. And then the rest was history. 2020 was the year of the SPAC. $250 billion were poured into them. The story might sound familiar because the same thing happened with crypto. In retrospect, everybody was scrambling for get-rich-quick schemes. Venture capital funds had so much money to throw around, the moment your startup pitch had the word Web3, Creator Economy or Blockchain, they jizz in their pants and beg you to take their money. It was the "zero interest rate" phenomenon meaning interest rates were so low that borrowing money was basically free, which flooded the market
with all this extra cash, and everything went up. But the music was going
to stop at some point. At that time, Ray Dalio, a billionaire hedge fund manager said, "Cash is trash," because, during a bull market, almost anything you invest in will go up because everyone else
is also investing in it. So holding cash is
literally the worst thing you can do for your financial health. Well, actually the worst thing would be to spend it on a banana duct-taped to a wall for $120,000. Like it's gonna turn into compost, what are you thinking? Anyway, the overall sentiment then was, "If you're holding cash,
you're a fucking loser." I don't want to be a loser, I don't want to fall behind. I see my friends getting rich on meme stocks, crypto, NFTs. It doesn't matter. As long as it'll make me money, I'll drain my savings
account if I need to. Even the most conservative investors. Once we're in a bull market, you can convince them to invest in a cartoon picture of a rock. That JPEG sold for $1.3 million. That's more than this
photograph of a potato which only sold for $1 million. At least this is was
a real tangible photo. And this potato looks pretty fucking sick. Basically, people rather be poor together than feel left behind by
everyone else getting rich. That's the zero-interest rate epidemic. Now, big tech companies are
not immune to this epidemic. They develop FOMO too, the fear of missing out. Every tech company and their moms are spending money to expand and scale their businesses, you have no choice but to keep up and also spend that cash. You don't want to be left behind. Remember, cash is trash. So what did Google do? They spent and hired aggressively, even if they didn't have a solid plan on how to deploy that capital effectively or how to make use of
the talent they hired. That's why you see overqualification, low-impact work, bloated teams, and a bunch of employees
making day in the life TikToks. - [Narrator] Day in the
life as a 23-year old product manager at Meta. I always journal in the morning and then do a quick workout routine. I get dressed, I try to look cute every day. Got some food at the office. I make a coffee every single morning. I need that. I did some work on the roof. Worked until lunch and then ate up there. Here's me being cute. I got a snack, always. I then shuttled home, the view is so pretty. Met up with some friends for dinner and then my boyfriend came over, and was acting like a DJ for my dog. That used to be me, man. Now I have to actually
make YouTube videos. Now, things are starting to unwind. Ray Dalio no longer thinks cash is trash. Interest rates are actually coming back to a reasonable level. So these tech companies have to undo what they did, since their revenue couldn't keep up with the pace of their spending. Though it was their
mismanagement of their leverage, the employees are the ones
who had to pay the price. All right, that's it for today. If you like these videos, let me know. If you don't, say that
you like them anyway because it makes me
feel good about myself. Okay, I'll see you in the next video.
Iseloom: rahulik, põhjamaine.
https://preview.redd.it/qbpsiaifpkja1.png?width=750&format=png&auto=webp&v=enabled&s=323a208f3b9a229d5534bfc34f2b36b3aadee65d
"He just left it in the middle of a street"– kõnnaku järgi ütleksin küll, et litaka sai naine.