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[anewaname]

A few months after the WHO declared the covid pandemic, this site's chart shows Microsoft SEC filings said 180k employees and a year later they said 220k employees, so they gained 40k employees when the pandemic forced many people online and businesses/organizations bought service contracts from Microsoft.

So, Microsoft is laying off 10k employees. I'd say it is not because the workload decreased but because the workers got better at the job so fewer were needed (so then it became employee screening like EuchreJack posted).

[McTraveller]

Look at it like this: if the family next door sells off everything in their pantry at the end of the day, while you let it sit, that family (which presumably eats as much as yours in the long run) will outcompete yours in the market whenever there isn't a supply shock, which is most of the time.

Does that account for the non-negligible cost of more frequent trips to the market?

Some of us don't consider "maximum dollar gain" to be the end goal, some of us like "stability" or "lack of stress."

[Thorfinn]

Oh, Microsoft was the company we were talking about? I cashed out of them at around 300, a couple weeks before the peak, because it became clear this chips supply issue was not going to resolve itself anytime soon, and it's hard to sell an OS if there aren't many new computers. I don't think that's going to get much better anytime soon. I expect a whole lot more downsizing, too. I think there's still some life in livestream hardware, though the easy money has already been snagged, and, of course, defense contractors are going to be strong.

McTraveller, subjective value is one of the Austrian insights that doesn't map well into NeoKeynesian or pretty much any other typical mainstream school. I, too, place a high value on a well-stocked larder. My wife used to give me a hard time about it until early in the COVID panic buying, and she went to the store for something or other, and the shelves were pretty much cleared.

I'm not really dissing other economic schools -- other than at the margin, there's not a whole lot of difference. It's more that most other schools don't seem to know what to do if you can't assign a number to something. The feeling of security you get from having a full pantry isn't something you can measure, so you can't take the derivatives and find a local maxima

[anewaname]

Spoiler (click to show/hide)

No one mentioned a specific company before this, and I'm not trying to diverge into that.

I brought Microsoft into this as an example because their 10k layoffs is repeated in the news recently regarding recent tech company layoffs, but in the context of "hired a large group of employees to meet a crunch, then laid off 25%", it seems more "business as usual" than over-hiring.

[Thorfinn]

Spoiler (click to show/hide)

Gotcha. I just seem to recall someone mentioned 10k layoffs, though maybe that was something else.

I think this is more than a "business as usual thing", though. When COVID hit Italy, I thought there was a strong possibility of lockdowns, and that only got  more obvious as time went on. And equally obviously, working from home is going to entail a lot of upgrades of your home office, so from early 2020, I had been squirreling away money into Microsoft stock, among other firms that would service that need. Every firm I invested in did a crapton of hiring to meet the new (artificial, unsustainable) demand. And being unsustainable, layoffs were inevitable.

[Maximum Spin]

Does that account for the non-negligible cost of more frequent trips to the market?

Yes, because it's, you know, an analogy.

Some of us don't consider "maximum dollar gain" to be the end goal, some of us like "stability" or "lack of stress."

Sure, and I think that's true of most people, but it is an objective fact that those who do care about maximum dollar gain will get more money than you, which, in a business context, means you get bought out or shareholders revolt. I feel like we're having two fundamentally different conversations here; I'm trying to answer you as to "why they do that" while you're telling me that you wouldn't. Okay, neither would I, but you're not running a JIT company!

[McTraveller]

My question wasn't "why do they do that?" - my question was "could we get better results if we did something different?"

It sounds like the key to that question is a definition of "better" - is it maximizing localized profit (e.g., for a single company?), is it maximizing generalized profit (e.g., across many companies, or even across many sectors of the economy), is it minimizing disruption?

That is - the claims that "the economy isn't zero sum" miss the fact that parts of the economy are indeed zero sum or even worse.  The reason we have consumer protection laws is evidence of this: a company maximizing its local profit will often do so at the expense of "social good." Consider the stuff in the news about indirect collusion of rent prices, or cries of price gouging on anything, etc.

[EuchreJack]

The beauty of Capitalism is that every business owner can run their business in whatever crappy shitty way they want.

[Thorfinn]

It sounds like the key to that question is a definition of "better"

This. Everyone has different ideas about what a "well-stocked pantry" means, from nothing at all and panicked clearing of every loaf of bread from the store every time they predict a snowstorm to a 20+ year food supply. Same with the tradeoff between job security and amount of income. Just as "we" can't do better by mandating everyone keep exactly 1 week food on hand, as that is optimized only for those who preferred 1 week, "we" can't improve on pretty much any other set of tradeoffs, other than respecting others' choice of a different preference. And, of course, the consequences of that choice.

That is - the claims that "the economy isn't zero sum" miss the fact that parts of the economy are indeed zero sum or even worse.  The reason we have consumer protection laws is evidence of this: a company maximizing its local profit will often do so at the expense of "social good." Consider the stuff in the news about indirect collusion of rent prices, or cries of price gouging on anything, etc.

Apart from contrived scenarios, things like this should not happen. Not having extra batteries on hand when there's a hurricane heading one's way was a decision he made to not buy spares in the weeks and years ahead of the actual event, and he just desires to externalize the costs of that decision onto others. Gouging is a good thing. It incentivizes people to have on hand the stuff they will need so they are not driving around as the storm approaches, hoovering up everything in sight. It incentivizes people from outside the area to load trucks with goods that they can get better prices on. Ideally, this never happens because everyone already has a few cases of water, a week's worth of food, basic medical needs, etc. on hand, so there are not local shortages in the first place.

[Loud Whispers]

I have never before imagined I would live to see the words "gouging is a good thing" written

[Thorfinn]

I have never before imagined I would live to see the words "gouging is a good thing" written

I know. Sad, isn't it, that we've basically all been indoctrinated to the point we can't think things like this through?

[Loud Whispers]

I know. Sad, isn't it, that we've basically all been indoctrinated to the point we can't think things like this through?

It's a good thing we have armed robbers, as they incentivise people to wear body armour. It's just a shame people are so indoctrinated to the point where they can't see the good in being shot at by armed robbers

[Thorfinn]

Hardly applicable. It is easy to say men should not harm other men, and to punish those who won't follow the rules. It's another entirely to try to tell Mother Nature to stop harming people and punish her if she won't listen.

It is hardly unforeseeable that there would be circumstances where you would want spare batteries or extra aspirin or a case of water. Heck, some countries got darned close to that with their COVID lockdowns. The time to lay in a month's supplies is before you get welded into your apartments for a 14 day quarantine.

Thing is, you cannot compare real life to some imaginary perfect world. In the real world, things like food and water and batteries run out. If the store does not get more in, eventually their inventory runs out. So the question is not whether you get bottled water at the pre-crisis price or at the "gouging" price. It's whether you get there early enough that it's still in stock or that you are too late and must do without entirely. And because there is no "gouging", there is no point in buying up supplies and taking them to sell to those who need them. Might as well not spend all the resources trucking them halfway across the country if you have to sell at a loss.

Have fun dying of thirst or making do at half or less of your normal insulin dose.

[McTraveller]

Gouging demonstrably does not (adequately?) incentivize "personal reserves"; in fact sometimes there are prohibitions for personal reserves; consider that it's generally illegal to stockpile gasoline for example (5-gallon lawn equipment cans aren't enough to absorb a shock).  And yes while we have strategic oil reserves (for example) that doesn't actually get product to where it's needed fast enough to prevent "gouging."

Couple that with the fact that producers of "gougable" goods also have incentives against producing enough to even support stockpiling in the first place, and in fact have incentives to artificially create shortages to drive up prices.

I point to the recent behavior of the automotive markets for an example: sure there are some supply shortages, but I think that OEMs have seen that they don't have to guess at production any more, and can simply just say "we're only offering 200k orders for this vehicle, sign up!" and they'll sell every single one and result in the high markup.  Don't be fooled by the news that the average new car buyer is "only paying MSRP" again - because MSRP is up some substantial percentage compared to a few years ago, far in excess of inflation.

Same type of thing with housing: because housing is not something that you can just go and build to increase competition due to zoning and other regulations, and you can't really "stockpile" a house...

Probably also the same thing with health insurance: you can't "stockpile" a service.

The list is much longer, but I'm tired.

Also: people don't starve because there is no food, and they don't dehydrate because there is no water; they starve and can't drink because people want more money to get it to where it's needed and there are often regulatory barriers in place preventing people from getting it for a more locally affordable price. As in "no you aren't even allowed to travel over there and buy it and import it, without paying these bribes license fees."

[Thorfinn]

So you are saying government as it exists, if not as designed, creates disincentives to live prudently. OK, I agree. Now what?

Like they say, you are free to choose, but you are not free from the consequences of those choices.