Despite Booming Economy And Record Profits Google, Amazon, Microsoft And More Lay Off Over 42,000 So Far In 2024
Despite Booming Economy And Record Profits Google, Amazon, Microsoft And More Lay Off Over 42,000 So Far In 2024
Despite a booming U.S. economy and significant advancements in the tech sector, including a robust performance by companies like Nvidia Corp. and a thriving artificial intelligence (AI) industry, tech companies have continued to lay off workers at an alarming rate in 2024. The tech-heavy Nasdaq inde...
Despite Booming Economy And Record Profits Google, Amazon, Microsoft And More Lay Off Over 42,000 So Far In 2024::Despite a booming U.S. economy and significant advancements in the tech sector, including a robust performance by companies like Nvidia Corp. and a thriving artificial intelligence (AI) industry, tech companies have continued to lay off workers at an alarming rate in 2024. The tech-heavy Nasdaq index has shown an impressive uptick and the U.S. economy added 353,000 jobs in January, outpacing economists’ forecasts. However, this overall economic strength masks a wave of layoffs in the tech sector
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Whew! We dodged a bullet! Imagine what would have happened if we Raised Their Taxes or the Minimum Wage!
I think a big reason these companies are laying people off is because we actually did increase their taxes. The Tax Cuts and Jobs Act of 2017 (Trump's only major legislation passed) changed the rules on R&D deductions after 2022 to balance the other cuts and allow Senate Republicans to pass the bill without a supermajority (through Reconciliation). This was meant to be a poison pill that everyone expected would get repealed before it went into effect, but efforts to repeal it fell apart.
Required R&D cost amortization
Under I.R.C. §174, a current deduction is allowed for research and experimental expenditures paid or incurred in tax years beginning before 2022. The TCJA amended I.R.C. §174 such that, beginning in 2022, firms that invest in R&D are no longer able to currently deduct their R&D expenses. Rather, they must amortize their costs over five years, starting with the midpoint of the taxable year in which the expense is paid or incurred. For costs attributable to research conducted outside the U.S., such costs must be amortized over 15 years. This will be the first time since 1954 that companies will have to amortize their R&D costs, rather than immediately deduct those expenses.
https://pro.bloombergtax.com/brief/rd-tax-credit-and-deducting-rd-expenditures/
I think it's because they don't have interest free money anymore and a lot of expenses for the c-suite compensation
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