THE FINANCE GHOST: Yes, big tech stopped the headcount

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A frenzied hiring spree among the goliaths is finally over, replaced by sweeping layoffs. But don’t think the heady Covid margins are bouncing back any time soon, writes FinanceGhost.

Back in November in this very column, I wrote an article called “Stop the big tech headcount!” — a nod to the desperate need for big tech firms to slow down the hiring madness. It was obvious to anyone with the smallest appreciation for operating margins that things simply couldn’t continue the way they were.

In banking, the concept of “jaws” gets thrown around. It means the difference in growth rate between revenue and expenses. If revenue is growing faster than costs, you’re in positive jaws territory and margins are going the right way. Banks watch this carefully because it is difficult for them to claw back any margin destruction...

 

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