Nearly 25,000 tech workers were laid off in the first weeks of 2024. Why is that?

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Nearly 25,000 tech workers were laid off in the first weeks of 2024. Why is that?::undefined

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Do you have any more reading on how a looming recession is will mirror 2008?

There has been a fud, fear mongering, excuse providing 'looming recession' every single time things are going kind of ok.

I think there is a bigger chance of people starting to default on their student debts and on their stupid car loans than the commercial real estate alone causing anything.

You can literally just convert office buildings into apartments if you want.

As much as I think commercial real estate is minimally linked to the rest of the economy, it’s been well established that you can’t just convert office buildings to apartments.

Floor plates aren’t cut to manage the changes to the floor plans in some cases not even being designed to carry the weight as modern office buildings often utilize floating plates so adding more walls actually would cause all kinds of issues with the walls as the building wobbles around. The plumbing doesn’t have the capacity and also is centralized in the buildings despite apartments each needing it, requiring more alterations to the floor plate. The windows requirements for bedrooms leaves most of the central space of the building unusable or everyone has kitchens and living rooms with no windows…. It’s often cheaper to demolish the building and start over than it would be to modify it.

To get a real idea of this look at apartment buildings in manhattan. They are either long and skinny towers or they are the size of a block, but have a massive quartyard running down the middle where office buildings are solid all the way through.

Exactly this. If not utilized by companies most of these office buildings will be sunken investment.

There's a very informational video here detailing the challenges of converting office buildings into residential.

https://youtu.be/FQOgOhheSi4?si=Wciv_kGUWurhmBy-

I didn't mean to say it's going to be as big as the 2008 crisis but the idea was that it's gonna create a similar domino effect.

Here are some stuff about this.

https://www.jpmorgan.com/insights/real-estate/commercial-real-estate/commercial-real-estate-trends

https://www2.deloitte.com/ca/en/pages/real-estate/articles/2024-realestate-outlook.html

https://finance.yahoo.com/news/kevin-o-leary-says-coming-230043170.html

https://youtu.be/YLshGvV0lRo?si=yTpYIyGLFFVv4D6i

https://youtu.be/Jq_6RKHJIIA?si=F43pJoeDv9FvUGCw

https://youtu.be/-V9yPGdubHQ?si=hdrxXJ71g3mwVyO2

I'm not an Economist but from what I understand the argument is like this:

1- Covid changed the work culture and made remote work viable

2- This in turn reduced the value of Commercial Real-Estate

3- There's a lot of investment of Comm. real estate. And investors & owners wanted to keep the value of their assets high.

4- So there was the RTO mandates. Which was initially pushed by the investors.

5- Ukraine war creates inflation and raised interest rates. The time of free money is over.

6- Now investors push for companies to turn profit instead of growth.

7- Companies try to cut costs to please the investors. Mass layoffs happening. Startups going bankrupt.

8- Since the interest rates are still high and investors saw that turning growth into profit wasn't that easy they are shy to put in money into new investments. Especially IT (AI excluded)

9- Investments dried up which means there's less growth potential for companies meaning even less demand for Commercial Real-Estate. Which means whoever invested heavily (with loans) into comm. Real-Estate will go under when it's time to pay back.

10- The banks who are heavily invested in Comm. Real-Estate will get affected meaning there will be even less money for investment causing an economic recession.