In SIlicon Valley: Profits up. Employment Down.

popo writes "The New York Times (free yada yada) has an interesting report on the changing landscape of Silicon Valley tech companies: Profits are soaring but employment figures are not. This dynamic points to significant future shifts down the road for Silicon Valley companies like Electronic Arts and Cisco. Interestingly, the culprit isn't just outsourcing. Huge leaps in worker productivity and automated processes are also responsible for the decreased need for new labor."

Comments

Mandatory overtime

[EWIPlayer]

Not to mention the recent trend (last 5 years or so) of mandatory overtime... If everyone works the equivalent of 1.5 people then employment doesn't need to go up. Profits are starting to match effort level, and that effort level will just equal burnout eventually. When that happens, employment will go back up or profits will start to go down.

Re:Mandatory overtime

[EWIPlayer]

My favourite T-shirt in my collection says, "Of course I don't look busy. I did it right the first time.".

But you're totally right. I've written tons of scripts and cron jobs in the last 5 years, yet i still work 9.5 hours a day on average. Where's my raise? :)

Re:Mandatory overtime

[malkavian]

In the long term, it's more likely that profits go down. I've seen this mentality before. Push people to the limits to make more profit.
In a tech team, one guy falls due to burnout, which means that load is spread around the remnants of the already overstressed team.
New guy comes in to learn the code/system, so the whole job needs doing, and new guy needs to be taught (if he's going to be any more use than a chocolate teapot).
Which leads to a second member falling, as there really is too much to do, and now less time to do it.
Which leads to another new guy.
More than once, I've seen this take out a whole team as management keep moving stuff onto the remaining originals who know the system, or the new guys who sometimes walk out one day and don't come back because of ridiculous pressure.
Eventually nobody knows the whole system, or can use it all effectively.
Then the product dies a long and messy death, possibly taking out the whole company surrounding it.
Net result, lots of job losses.

Working in the areas I have so long (systems and networks), I find it really odd, how companies are running around yelling "Resilience, reliability.. We need everything able to withstand emergencies", and buy two of every server, RAID the disks, redundant routing, offsite backups..
Yet they have their tech team cut to the bone, with highly compartmentalised skills.
One leaves, and for a significant time, they're shafted in one area (at least).
There was a very good reason companies always used to have more staff than was strictly necessary to complete a task.
It wasn't just morale, and making the job comfortable enough that people wanted to stay..
It was for the ability to obtain an "emergency tolerant" skillset.
You could lose a good few staff from any area, and your knowledge base wasn't significantly impacted.

All this 'on the edge' company structuring isn't sustainable.
And by the time the West has finally come full circle, and discarded all the bits that have cost if a fortune in the long term as it's chased short term gain for a few decades (until it can't get any more short term gain, and they hit the wall), they'll be facing a fully geared up Asia and China, who have taken the long term view, with fully staffed and skilled departments who can outmanoeuver and outperform any Western company going..

Re:Mandatory overtime

[James Youngman]

It was for the ability to obtain an "emergency tolerant" skillset.
You could lose a good few staff from any area, and your knowledge base wasn't significantly impacted.

An important metric for any software project is its Truck Number. This is the minimum number of your staff that would need to be hit by a runaway truck hitting a bus queue in order to completely derail your project.

So, if your project truck number is 2, you could afford to lose one member of staff due to a random event (sickness, quitting, etc.) but not two.

Technology makes things easier and cheaper.

[Anonymous Coward]

Same thing happenned to machinists.

You start off with a blacksmith. Lots of them are needed to do anything and it costs a lot and they are highly skilled and treasured.

Then the blacksmith learns to build metal bending machines. You take a bar, put it in the machine, pull hard on the lever and it bends.

Thus it makes more complex devices easier to build. The blacksmith becomes more highly educated, more refined. Becomes the inventor.

He uses the metal bending machines to build complex machines. shavers, benders, cutters, drills, and such. Those in turn make making more and more complex machines that are larger, stronger, and at the same time more exact and easier to use.

Then comes interchangable parts. Things that took generations to figure out, years of discipline hard work to learn how to build, can now be built in previously unimaginable large numbers AND be more exact AND be made by semi-skilled labor.

Then they build entire factories. Machines the size of apartment complexes. Things so automated and exact that it boggles the mind.

Were is the place for the original blacksmiths that started all this? No were. All you need is a highly educated guy at the top doing the design, and somebody with a IQ hirer then a 105 to stamp out the molds and feed the machines the raw materal.

Such is the same thing with the programmer.

The original blacksmiths were the guys that took individual transistors and designed thinking machines. They used wires coated in varnish and wrapped around metal pegs to build curcuits.

They developed their own languages to go with the custom machines.

Then along came wide use of intergrated curcuits. Discs and memory to store instructions. Machine language became well understood technology and people built and documented assembly.

Then you had standardizations happenning. Fewer new unique machines were built and ones that were created were built with a eye on backward compatability with previous generations of computers.

Then along came C and Unix to make realy portable programs. Fewer and fewer machine archatectures were built, with standardized abstractions and ISAs for compatability.

All the computers resembled each other in operation and performance. They became faster and faster. Software that was not portable became obsolete as soon as it was finished written.

Now we have a few archatectures. They resemble each other closely in theory and executions. Portable software is the norm. Nobody fucks around in assembly unless they absolutely have to and that's avoided as much as possible.

Nobody is hand-making curcuits. Nobody is building memory from hand or wiring up peg boards. It's all done thru IDE's and thru standardized libraries provided by large monolythic system developers. The computer is disposable and faster then ever, the software can be gotten from the internet in minutes and new programs can be written in weeks that would of taken years to accomplish just a couple decades ago.

That's how technology works. It makes doing complex things very easy.

A person can go into Enlightenment 0.17 or use Python with Gstreamer framework to build a DVD player with fewer then 100 lines of code, and have it run on AIX, PPC, ARM, x86, x86-64, IA64, Sparc and others with almost the same level of effort.

7 it was very expensive just to have a computer that could even play DVDs.