Tag Archives: profits

Margins over manpower

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Amazon just laid off over 14,000 people. According to Beth Galetti, Senior Vice President of People Experience and Technology at Amazon, who wrote that they are ‘Staying nimble and continuing to strengthen our organizations’, “The reductions we’re sharing today are a continuation of this work to get even stronger by further reducing bureaucracy, removing layers, and shifting resources to ensure we’re investing in our biggest bets and what matters most to our customers’ current and future needs.”

What are the ‘biggest bets’ they they are investing in? Chips. AI chips. Profits before people. Margins over manpower. The human equation in a company no longer matters. People are as expendable as office supplies. Need cost savings? Fired employees save a lot more money than reducing the cost of paper and staples.

The shareholder model of capitalism is slowly collapsing. It’s the middle and upper middle class that is getting laid off. Meanwhile, large companies like Nvidia invest billions of dollars in Open AI, and Open AI takes that money and buys Nvidia chips. Simultaneously, all these companies lay off staff to amplify margins, buy more chips and grow even larger.

Top executives who are already making millions hit their shareholder targets and get bonuses. Meanwhile regular employees face layoffs and have no job security. You think your $200,000 job is safe? Only until the next quarter’s earnings are going public, or until the merger is completed after your small company is swallowed up by one of the big guys.

If it was just Amazon, that would be one thing, but similar reports of layoffs have recently been announced at IBM (9,000 jobs in the US alone), UPS (34,000 jobs), Nestle (16,000 jobs), Intel (24,500 jobs)… the list goes on. What happens to the global economy when hundreds of thousands of people become jobless while large companies recycle their money, reinvesting in each other in circular deals where funding is promised back to the investors in product purchases?

What happens in a world where profits and margins matter more than people?

Calculated Misery

I recently watched this TikTok, about ‘calculated misery’.

It starts off with the idea that social media platforms are going to work together to get us to pay or pay more for their services. It’s no longer enough that we have to watch ads to play along. I notice it when I watch YouTube on my phone and I’m regularly asked if I want to upgrade to avoid ads. Meanwhile I’m also watching more ads that I can’t skip after 5 seconds.

My Twitter feed is filled with ‘blue checkmark’ profiles where that check costs anyone $8 a month to have, regardless of if their content or expertise is valuable to me. And meanwhile, my checkmark-less profile is being viewed less often than those who pay.

Also discussed in the video is how airlines use calculated misery to upsell you. The carry-on suitcase I bought 15 years ago used to be good on any airline, now it needs to be checked on many of them. Leg room has been reduced, and while tickets used to include choice of seats, now that’s something you need to upgrade or pay more for to get. You want a meal or beverage on a 5 hour flight? Those used to be free, but many airlines charge for them now.

It used to be that the basic price was good enough, and upgrades gave you perks, but now it seems anything less than premium is meant to suck a little bit, meant to be just enough misery to make you want to pay more. Even amusement parks are doing it, giving people privileged access in lineups if they pay more. And it’s hard to be in line and watch others get priority over you.

We’ve moved from an era of customer value and service being a priority to an era where profits matter more. It’s a world where customers are made less comfortable, unless they pay a premium, and the benefits are really to shareholders. Essentially, services are getting gradually worse, and misery is creeping in… unless you pay a little bit more.