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0 pointsmsteffen1d ago0 comments

I wonder if some of these CEOs are anticipating a big crash and trying to lay people off now, so that (1) they can raise/hoard cash while the money-go-round is spinning and (2) their eng organization is already lean and used to it if/when the money-go-round stops.

“Because of AI” indeed.

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5 comments · 2 top-level

kev0091d ago· 3 in thread

I think it's just the relative cost of money. Credit, debt, raises, revenue all rely on it. The tech industry got used to zero interest rate and then Covid-era stimulus. Now, suddenly, cashflow matters, but the companies are still run by the same people that only know perception management. Eventually they too will get cycled out.

Ancalagon1d ago

not to mention SaaS stocks are down making the cost of borrowing against their stock more expensive

skeeter20201d ago

Bingo - the combination of rising interest rates and tanking SaaS valuations has left a lot of these companies - specifically PE funded with mountains of debt - in a very weak position. Funny enough I think small SaaS companies are in a good position, both ownership & their potential use of AI, while larger SaaS companies, are in a lot of trouble. Why rent SaaS when you can build applications with AI? but then, who's going to maintain them?

trgn1d ago

but none of this applies to elastic. it's cash flow positive, and has such a cash hoard it's doing stock buybacks.

confidantlake1d ago

Nah they are just following the herd. When everyone was hiring they hired, when everyone was firing they fired. Go along to get along.

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