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Is this phenomenon something that economists think they have an understanding of? As an outsider, I'm very confused. The tech industry seems to be making a lot of money right now. Why is all of this profit resulting in fewer job opportunities for workers? Thanks.

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  • $\begingroup$ I forecast that instead of writing "managers overestimated their demand for labour after the pandemic, and while they could be profitable without layoffs, they can be more profitable with layoffs" someone will write about 'AI' tools such as MS Copilot boosting productivity and make a classical supply shift argument without any supporting data. $\endgroup$
    – Giskard
    Feb 14 at 6:07

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One reason(in simple terms) is that tech companies, even large ones, have a lot of future growth priced into them. As intertest rates rose to combat inflation, these kinds of speculative future investments became less profitable, and the industry had less investment behind it.

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