Unknown Speaker  0:00  
Oh

Joshua Warren  0:06  
there's a warren buffett quote, somebody basically asked him, you know, what's the one thing you would tell a new investor, if they wanted to ever reach your level of success, and he said, be fearful when others are greedy and greedy when others are fearful. And so thinking about that, and looking at these layoffs, I was saying, you know, all these companies, it's fear, they're being fearful that for a long time, they were greedy. Think about all the talent wars of the past few years, you know, Facebook, and Google and Amazon all fighting over the same talent. Well, now they're being fearful. So now it's time for the rest of us to consider being greedy.

Darin Newbold  0:43  
Good day, and welcome to Commerce today. My name is Darren and I'm here as always with Joshua Warren to talk us through what's happening in the world of commerce. Now, our episode this time around. Interesting. Josh, you kind of got me thinking a bit. But it starts off all about copycat. So help me out. What are we talking about with this whole copycat behavior among companies?

Joshua Warren  1:07  
Yeah, so we're talking about some some really interesting research that has just come out of Stanford and the Stanford Graduate School of Business, about a really tough topic. And that's layoffs and all these tech company layoffs. And basically, there's a professor that has done a lot of research, Jeffrey Pfeiffer that has named these copycat layoffs and he calls them a social contagion, that its behavior spreading through the tech industry, almost mindlessly copying what the other companies are doing.

Darin Newbold  1:42  
And we'll have this in the show notes. So you can take a look at it yourselves. But please continue. The article. Just wanted to grab that.

Joshua Warren  1:49  
Yeah, appreciate that. So yeah, there's in there, man. When we talk layoffs, sadly, there's a website called layoffs dot FYI, that will also link to the tracking layoffs and shows the you know, so far this year, in the tech industry, there's already been, you know, 60 70,000 employees laid off across a lot of different companies. And so kind of wanted to look at that see, you know, what's going on here. And again, this professor in this article, he basically points out, first of all, they don't work, they're not meeting the needs of the companies. But also, it's not good for society, it's not good for the people that are laid off, obviously, that there's a direct healthcare costs, mental health costs that happens with us and get into a happier place for a moment. As I was reading all this, I started thinking about, there's a warren buffett quote, somebody basically asked him, you know, what's the one thing you would tell a new investor, if they wanted to ever reach your level of success, and he said, be fearful when others are greedy, and greedy, when others are fearful. And so thinking about that, and looking at these layoffs, I was saying, you know, all these companies, it's fear, they're being fearful that for a long time, they were greedy. Think about all the talent wars of the past few years of, you know, Facebook, and Google and Amazon all fighting over the same talent. And really, as we were talking about before the show, you know, Microsoft would go out, they would announce, they just hired 5000 ai engineers, well, then all of a sudden, Google and Amazon feel like they have to do the same thing. And they may not even have a place for those engineers yet, but they don't want to get left behind or even have any idea what they're gonna do with them. But exactly, exactly. And so, you know, they were being very greedy. And, and really, I mean, they drove up salaries, they drove up comedy, competition for talent made it harder for the rest of us to hire engineers. Well, now they're being fearful. So now it's time for the rest of us to consider being greedy. And I think as a retailer, an ecommerce service provider or an agency, now is the time to consider to hire and to really consider you know, all these people that are being laid off. They're getting burnt on kind of the big company, big tech company experience. And one thing I like to tell people is, Hey, join an industry that has never had a down year, ecommerce has grown every single year. So hey, this is a really good place to come to work. Yes, you know, the startup scene, the tech scene, it's fun. It's exciting. If you get hit that one in a million chance you do great. But now we're seeing the flip side of that. It's I had a conversation with someone recently, and basically just said, Hey, you got to remember, if there's huge rewards, there's gotta be huge risk. Like there is no such thing as a free lunch in life. So I think a lot of these developers and engineers have learned this the hard way now and I think they're a lot more open to working for retailers.

Darin Newbold  4:44  
So let me ask you this, one of the things that spurred or well as the boom in all the hiring, boom, and through all of this, one of the things that that has done along with the inflation that we have is salaries went up and wages go up. Crazy to the point where people were changing jobs, whether they were qualified or not, and making nearly 2x, or at least one and a half x maybe, of what they were previously. So do you think that with this, shall we say the bubble bursting here on on the job in this job market? Do you think that wages will settle into a little little more into the reality place, at least for for the jobs that are out there? And I'm speaking a lot more around on the the technical the development side and developers and stuff where, you know, you could? Well, I've started to tell my young daughters just graduating high school and then starting into college, that guy, skip all the other stuff, go be a developer, because I mean, you're almost guaranteed six figures coming out of college.

Joshua Warren  5:49  
Yeah, and just crazy. So I know that I am probably the only person that reads the minutes and transcripts of the Federal Reserve outside of the finance world. I will admit that I do that. And if you read it, it's, you know, hopefully they know what they're doing. Surely they know what they're doing, but still awake. Well, yeah, exactly. Exactly. Well, every once in a while, there's a gem in there. And in this case, sadly, they have said that this is what they're trying to do. This is actually the the increase in interest rates. This is a kind of master plan by the Federal Reserve. And now I'm worried I'm gonna start sounding like this is not about the Illuminati out there. But there is basically a master plan by the Federal Reserve, they've said, Hey, we want wages to come down, we think that the way we solve inflation is by driving wages down, they want to see what they call a healthy level of unemployment, which is kind of scary, because no one really wants to be unemployed. But in their eyes, looking at the overall economy, they want to see a healthy level of unemployment, that basically makes it easier for companies to hire, that gives workers less opportunity to demand higher wages. So yeah, that is actually the plan and purpose behind all of this. And I would like to tell myself that the Fed doesn't want to see layoffs. But that is basically the result of what they're doing is by raising interest rates. They're sparking these concerns around the economy. They're sparking these concerns around you know, if these companies want to be able to continue to pay these people and that is what's kind of driving the layoffs and they think will drive wages down.

Darin Newbold  7:34  
Okay, so the Fed saying that that the the we're kind of doing this on purpose in a way but yet Jeffrey Pfeiffer here in the in the article is, is saying that it's a that it's a copycat it kind of the, it started with someone, somebody, a big tech company was kind of the first and who knows who it was, and maybe we could find that out or maybe not, but that then people are copying it, I guess, how do you? Or maybe helped me? How do I how do I put the two together? In a way that? Is it really that the Fed in this case is really creating the fear? And then we in the global we are the lemmings that follow that fear and up taking these actions?

Joshua Warren  8:23  
Yeah, I really think it is. I think that wherever this started, if you go back and look, and you find that very first, you know, large tech company that started the first layoff and and it's tricky, the data is a little muddled just because there were layoffs and 2020 due to COVID and even into 2021. So it's not clear exactly what date you'd have to look out for that, but whoever it is, whichever company it is, I can almost guarantee you that all of this started with someone hearing a voice in their head a little whisper saying the economy is going to turn the economy's gonna turn, don't get caught out, the economy's gonna turn and they said all right, you know, I'm a CFO or CEO of a large tech company. I'm a publicly traded company. What's my playbook for the economy turning step one, lay people off.

Darin Newbold  9:11  
That is interesting. Well, you made me take a look here and going to the layoffs dot FYI site. If you look at the magic date of January 4 2023, this is just for this year, in this in that course of that one day 16,000 people between Salesforce and Amazon were laid off. So talk about a domino falling right there. That's definitely catalyst. Okay. All right back to back to merchants and commerce. Let's let's talk about some some fun stuff. So this is a great opportunity. So that means the the pool of resources out there is available. And in my experience when companies are laying off this number, you're now you're now beyond the hey, we're cutting the lowest 10% Just because we can And this is we're starting to make cuts that hurt. So the talent pool and those kinds of things are is gonna be high. What can can merchants, integrators and all of those in the E commerce ecosystem? What can they do to attract these potential people?

Joshua Warren  10:18  
Yeah, I think the biggest thing is realized these people are gonna have a little bit of fear, they're going to have a little bit of they're going to be impacted by this experience. And I think that if you can really emphasize that you have a good, good, interesting job opportunity, but also really emphasize the stability of your company, and just emphasize, hey, we're, we're a nice, safe, stable place to come. I think that can really help attract these these individuals.

Darin Newbold  10:47  
Interesting. Okay. All right. And it's not because we're all the E commerce ecosystem gives us free lunches to all there.

Joshua Warren  10:56  
No, funny you mentioned free lunches, too, because we were talking before the episode about how there's one company that so far hasn't in the big tech world, one company that hasn't announced any layoffs. And hopefully, that's still true. As of the time this episode comes out, I'd be willing to bet it's still true. And that is apple. And when you look at it, and you ask Apple even it's that they don't engage in this type of kind of fear based behavior. They don't. They Zig when others zag, they don't just follow the crowd. But then also, they've always stayed lean or leaner than the others. There is no free lunch at Apple, literally, employees have to pay for their own lunch at the employee cafeteria. And I think they give it to you at cost. But they didn't do the you know, free massages, free lunches, free gourmet chefs free everything benefits. They kept it very, very real. So well. That's great.

Darin Newbold  11:48  
That's great. That's good to hear. And it sounds like there's some great opportunity. Well, as we kind of wrap this wrap this episode up on the on the layoffs and the copycat nests going on any last messages you'd like to share. Josh?

Joshua Warren  12:03  
Yeah, I want to, I want to add one more thing, just because I don't want it to sometimes I feel like we're giving advice. And you know, there's a listener out there going, Oh, that's great for you. But you know, I can't do that. So, I do want to mention, you know, if you're facing your own budget cuts, whether it's, you're the owner of the company, and you've decided this has to happen, or if you're, you know, a manager or director that's been told it has to happen, definitely read this article was linked to because basically, in the article, they outlined how layoffs don't actually cut your costs in the long term, that if you're publicly traded, they're going to hurt your stock price, and if they harm employee productivity, and so in the article, they outline some alternatives and some approaches. Really, everything from cross training to there's an example in a case study of a business that said, hey, they went to the workforce today, we're either gonna have to layoff 10% of you, or everyone's gonna have to take a 10% pay cut. And by the way, management starting with a 20% pay cut, and their employees rallied around and they took the pay cut, and we're able to avoid layoffs that way. So definitely look at that. Also, though, challenge, especially if you're in a position that you can do this, and you're not risking your job doing this, but challenge kind of that underlying assumption that we must do layoffs, or we must cut these costs. And make sure that it's coming from a place of an actual change in your market and your customers buying behavior. And not just fear that might change because so much of this, it becomes almost a self fulfilling prophecy in the economy.

Darin Newbold  13:34  
Very good advice, and very good, very good information to have. Well, we hope and we wish all merchants in all those in the E commerce community that they don't have to they don't have to deal with with layoffs or the things related around that. And everything continues to move up into the right as the as the graph ought to go. So with that, we thank you as always for being with us Commerce today, and until next time, we'll see you then

Transcribed by https://otter.ai