Layoffs everywhere - ahri's unqualified thoughts #72

Easy to consume content: 1 quote, 1 tweet/storm and 1 article/video.

In this edition, we address a sobering trend in the gaming industry: significant layoffs. In 2 days, Riot recently let go more than 500 employees, while Microsoft's gaming division saw 1,900 departures, signaling a broader industry shitshow that includes Unity, Amazon/Twitch, Epic Games, Embracer group, and many others.

We are already at 5900 lay-offs, nearly 60% of 2023’s numbers and we’re not even at the end of January. I’ve been saying this regularly: the end of FY is in April/June.

1 quote

“The basic law of capitalism is you or I, not both you and I.” Karl Liebknecht

1 tweet/storm

(yes, the screenshots aren’t sized the same and it triggers me)

1 article/video

No article today, as the above should be enough to paint the current picture. But I can offer my take.

Note that I am not a macroeconomist, but I am trying to understand why we reached this point, and this is my read on the situation. The focal point of this analysis is the insane hiring surge during the pandemic, fueled by what was then "cheap" money, and its repercussions as we transitioned to a period of “more expensive” money.

Numba goes up during the pandemic

During COVID, Technology, Entertainment, and pretty much everyone, capitalized on the era of low-interest rates and free stimmies to expand their workforce, to push for significant growth that had already started. On top of cheap money, everyone was stuck at home with nothing to do, so games were a good outlet. Who would have thought that post-pandemic, the meme “touch some grass” would come to reality? Certainly not investors.

It's important to acknowledge a broader perspective on employment trends. Despite recent job cuts, the net job creation since 2020 is positive. This fact, though uncomfortable, doesn't mitigate the pain of those affected by layoffs, underscoring the complexity of the situation.

Growth at all costs

The pressure on companies to demonstrate Y-on-Y growth and exceed expectations is immense. The stock market's relentless demand for performance forces companies to choose between two difficult options when not reaching numbers: accumulate debt or reduce expenses, often through workforce cuts. While both choices have significant pros/cons, the latter often appears more favorable to shareholders, which then can exacerbate employment volatility.

This analysis, while simplified, hints at the very complex nature of the dominating economic system. Solutions like strengthening unions, executive pay cuts (a nod to the GOAT; the late Satoru Iwata of Nintendo and his board who took a pay cut in 2014 to avoid laying off people), and a more sustainable approach to growth are worth exploring. But, the above system, with its inherent complexities, goes against this “simplification” I mention.

A Personal Reflection

I know this fucking sucks. The industry never made as much money as nowadays, games are selling well, games are better day after day, people moved for their jobs, and have families, and yet… It just fucking sucks.

In navigating this shitshow, the advice I can offer is fundamentally simple: prioritize the well-being of oneself and loved ones, commit to hard work, and strive for excellence. In an unpredictable economic landscape, these principles offer a semblance of stability and hope.

Also, Jorge Murillo, a Senior Designer on Overwatch 2 decided to go out with a bang, I chuckled