I would be very willing to believe this if it wasn't for the fact that so many tech companies have fundamentals that just don't make sense.
We've just gotten so used to the idea that "tech companies don't need to make profit" that we don't even question it any more. I still hear people shocked when a companies revenue goes up but their stock price drops while completely ignoring the reality that costs also went up.
The truth is all companies need to have profit and many of these tech companies have never showed that they're even capable of turning a profit.
What's happening is that investors are going to boards and telling them you need to make serious progress towards profitability. If sales are growing slowly or even declining there is no other option but to do layoffs.
IMHO this is still just the beginning, there's a lot of feedback in the tech ecosystem that are going to start playing out as more and more companies start scrambling to show profitability.
We've just gotten so used to the idea that "tech companies don't need to make profit" that we don't even question it any more. I still hear people shocked when a companies revenue goes up but their stock price drops while completely ignoring the reality that costs also went up.
The truth is all companies need to have profit and many of these tech companies have never showed that they're even capable of turning a profit.
What's happening is that investors are going to boards and telling them you need to make serious progress towards profitability. If sales are growing slowly or even declining there is no other option but to do layoffs.
IMHO this is still just the beginning, there's a lot of feedback in the tech ecosystem that are going to start playing out as more and more companies start scrambling to show profitability.