More tech layoffs could be coming

publishedabout 2 months ago
3 min read

Welcome to Nonrival, the newsletter where readers make predictions.

How it works

  1. On Sundays, read the newsletter and make a forecast by clicking a link at the bottom.
  2. On Wednesdays, see what other readers predicted and how your forecast compares.
  3. Over time, you’ll get scores based on how accurate your forecasts are.

In this issue

  • Help me improve Nonrival
  • Readers think more tech layoffs are very possible
  • More on Disney vs. Netflix (everyone seems to love Disney!)

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More tech layoffs could be coming

Personally, I put the odds of more tech layoffs pretty low. The big firms have largely done what they're going to do, and things should calm down a bit. But readers are not convinced.

Sunday's email asked: How likely is it that there will be 30,000 or more tech layoffs in either February or March? The average reader forecast was 44%. While 30,000 wouldn't come near the heights of January, it'd still be significant. Readers think the tech layoffs could keep on rolling for the next month or two.

How your forecast compares

  • You said there was a [012923_FINAL GOES HERE]% chance of 30K+ tech layoffs in Feb. or March.

  • You predicted that the average of readers' forecasts would be [012923_CROWD GOES HERE]%. The actual average was 44%. You were closer than [012923_CROWD_RANK GOES HERE]% of readers.

What other readers said

Reader rationales

The case that we're past the peak of tech layoffs:

15%: Since the major tech companies have already executed layoffs, the numbers should naturally drop as I don't see a second round of cuts so soon, there's still a need for tech talent, and I don't see the workers that survived being willing to carry the full load. Overall, I believe this was the typical move of companies taking the opportunity to pare down excess and low performing headcount to utilize AI and higher quality talent
25%: If Ubisoft let 25% of staff go (seems likely right now - but are they included in this dataset? Is it only US companies?), that's about 5000. If Apple let 10% of staff go, that's 16,000. Smaller companies could contribute, but it seems unlikely that would add up to another 9000. Also, how likely is it that Apple will do layoffs? So an outside chance, but not super-likely

Or, maybe more are on the way:

50%: MONTHLY tech layoffs MIGHT have peaked as the big companies made their moves. I'd expect to see a mesa of higher-than-average tech layoffs throughout 2023 as easy-money startups continue to fail--but no single month like Jan 2023. That said, any bad event could trigger a bad month because the baseline will be elevated. So 50-50.
60%: Drawing similarity with dot-com bubble in early 2000s which was characterized by rapid increase in value of tech stock and excessive investment. Two million people were laid off in 2001 to cut costs and face the economic downturn. In Q1 2023, FED interest rate will likely still increase and expect lower venture-capitalist investments, though an global economic downturn is yet to be seen. Based on factors above and a baseline of 36k layoffs per month in the last 4 months, it might be likely more than 30k tech workers will be laid off.
90%: I work for a large technology company and have heard they are planning another round of layoffs

More Netflix pessimism

Over at Good Judgment Open, forecasters are tackling a version of the Disney vs. Netflix question from last week. In the newsletter, Nonrival asked how likely it was that Disney would have more streaming subscribers than Netflix at the end of Q2. Most readers thought it was likely or very likely--the average forecast gave Disney a 61% chance of staying ahead.

Good Judgment Open has a partnership with Nonrival, and we ask similar questions for their forecasters as we do in the newsletter. But their platform supports multi-choice forecasts, so we rephrased this one and added more choices about when Netflix might or might not catch Disney. Here's where that forecast stands:

When will Netflix next report more subscribers in a quarter than Disney?

So Good Judgment Open forecasters expect Disney to keep its lead all year, and collectively give just a 12% chance of Netflix catching Disney by end of Q2. That's quite a bit lower than this newsletter, where the average forecast gives Netflix a 39% chance of catching Disney by mid-year. But both groups are betting that Disney probably maintains its lead.

If you're looking to go deeper with forecasting you can make a forecast on Good Judgment here. The scoring and results are totally separate; we just collaborate on questions to ask.