When banks hiked interest rates, almost every tech company immediately laid off 5-20% of their engineers. It was just no longer profitable to keep a bloated engineering staff around to boost the stock price. Instead, companies had to actually make money³. However, that wasn’t a good public explanation for the layoffs, since it sounds weak to admit that you were paying hundreds of engineers to do unprofitable work. Fortunately, the end of ZIRP coincided roughly with the rise of ChatGPT, so tech companies were able to to blame their layoffs on the power of AI. Saying “with this transformative new technology, we’re able to deliver 10x the value with half the engineers” is a much stronger message, even though it doesn’t make much sense (if this is true, why not keep your engineers and deliver 20x the value?)