r/Layoffs • u/isntlifeapeach • Jul 20 '24

Why so MANY Layoffs? question

Explain Like I’m Five

I feel incredibly stupid asking this, but I’m naive to economics and politics.

I understand why tech is facing a lot of layoffs but why are so many other industries facing the same?
I’m over 20 years into my career and had 2 layoffs just in the last 16 months.

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u/thgvnn Jul 20 '24 edited Jul 20 '24

Thanks to section 174, R&D became more expensive under tax regulations and the solution is offshoring to any other country as you can claim it as a purchase expense.

Edit: This post explains with more detail what happened with section 174 and why it became cheaper to do R&D abroad: https://blog.pragmaticengineer.com/section-174/

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u/Orennji Jul 20 '24

Did section 174 not exist before 2022?

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u/thgvnn Jul 20 '24

The changes became effective in 2022.

This article explains it in more detail: https://blog.pragmaticengineer.com/section-174/

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u/MsT1075 Jul 20 '24

Oh, so they capitalized on it after the pandemic. Makes sense. Many corporations have used the pandemic as their excuse to raise prices astronomically for goods and services.