this post was submitted on 29 Jul 2023
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I'm just a layman, but it has been nagging my brain how all these big tech companies seem to be turning shitty all at once. I've seen others propose similar explanations, but the basic idea is that the historically low rates got them addicted to "free" capital. Now the faucet has been slammed shut and they have to make up for the shortfall.
Also, it's not just big tech at fault. The massive worldwide inflation we've experienced happened for the same reason - shortsighted greed.
It's definitely the high interest rates. All of tech has been built on venture capitalist money with "grow at all costs" as the primary strategy. With sustained higher interest rates, VC money is much harder to get. The focus has gone from "grow at all costs" to "become profitable at all costs." It's jarring, and it's happening everywhere at the same time.