Post

Frank Elavsky (he/him) ⌁
@frank.computer

Yeah, the secret reason is taxes. Trump made cuts in 2017, senate balanced it with a time bomb that went off in 2022. "Section 174" allowed software engineers to be written off as R&D headcount, where R&D was a tax write-off. Repeal that, and companies have to pay taxes for engineers. More details:

qz.comThe hidden time bomb in the tax code that's fueling mass tech layoffsA decades-old tax rule helped build America's tech economy. A quiet change under Trump helped dismantle it
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Frank Elavsky (he/him) ⌁
@frank.computer

I always thought how it made NO SENSE that cutting-edge tech companies would cut 25 to 30% of their engineers while making record profits because of "AI" or whatever. AI would theoretically allow every engineer to be *more* efficient, so why make cuts?

Frank Elavsky (he/him) ⌁
@frank.computer

And the tax change didn't just affect top tech companies but all R&D software engineering headcount, which is why industries from video games to trucking logistics cut software engineers over the last 3 years. The austerity in tech isn't AI. AI has been a cover. The cuts are because of taxes.

Laura Lynn Gonzalez
@1auralynn.bsky.social

It's not exactly that companies have to pay taxes for engineers - they can't write off engineer salaries as expenses, resulting in taxes on phantom profits. This mostly hurts smaller companies who are just breaking even, but yes is also responsible for the firings/slow hires at the big corps.