It is and it isn't, since it wasn't the new hires that got fired exclusively.

The correction is happening in the market. During the Trump era companies converted tax money into buy-backs, and did other things that inflated the price with no real growth to back it. But everyone did it, and the interest rate was low, so investors felt ballsy and went with it. In 2020 it got even worse, and a recession hit everything, except the market, because everyone was doing it, and the interest was low so investors felt ballsy and went with it.

Then in 2021 the economy lurched again, and things started moving. The interest rates were low and the investors felt ballsy, so the market stayed waaaay overinflated. But investors refused to believe it was their fault. The market reacted by, rather than lowering the market, making everything more expensive until the market was effectively cheaper. But it couldn't be the investors fault, so people assumed that supply was limited due to issues with the distribution. But as distribution and supply improved, the inflation kept, but it couldn't be the investors. But something had to be done, and so interest rates went up. When interests rates went up, investors weren't able to leverage their investment against loans as effectively, so they started feeling less ballsy, their coke waning, and so they started selling, which lead to a snowball effect. The investors couldn't have done anything wrong, so it couldn't be a market only correction "the recession is coming" said Chicken Investor and everyone said the same. The prices kept falling, but the rest of the economy was doing just fine.

Now investors don't use economic models, that is they are not based on theory and science to be proven to actually describe the way things work. Instead they use financial models, which play it a bit more loose and are more of general guides on how the economy works. So we have a model where companies decide how much of a company's valuation is real and how much speculative. That is if you buy a $100 stock, it may be that if the company folded right there and then you'd get, at most, $80, and the other $20 were bets on the future (that didn't pay off). They use a model that goes backwards, they look at the revenue and profits the company makes, they look at the capital they have, the number of employees, etc. and from it create a base valuation. When the stock price is higher than valuation, that means there's speculation, how much investors are willing to do depends on how ballsy they feel. When the stock price is at-price it's considered "a safe bet" basically a good place to put your money that will have some returns and is good as a backup. When the stock is worth less than the minimum valuation, people assume that the company is imploding, losing value and worth getting pennies on the dollar, and therefore will be worth even less in the future. When the economy is doing well this model is very good, it basically is about company size vs how people feel about betting on it, a clash between reality and observation. But it doesn't capture all cases. Like using a barometer to find out how high above sea-level a boat is and realizing that if it lowers that means the boat is sinking, unless it's just the tide going down. Same here, the model doesn't capture cases where there's a large market correction, and it really doesn't work well in these cases. But that would be admitting that the investors got greedy, and the investors did not do a mistake, it must be the employees that got it wrong!

And so companies do layoffs. There will be those that try to make excuses, to say this is a solution to a real problem, which is absurd because there isn't. They will say that the companies over-hired and are losing money for it. But the profits and information doesn't show that at all. The companies did over-hire, and therefore should set a period of internal-optimization with low-hiring rates, and a focus on performance and project analysis. So by the time the market stabilizes and the correction is over, the companies would find themselves roughly where they should be. The need for mass-layoffs is only to keep investors happy with their arcane (at least to them, many don't seem to understand the logic behind them) models. But of course, this would mean that it's the investors who are being too greedy, and they can't be wrong. The thing is this won't prevent the hit to investors for the next quarters. It doesn't mean that investors won't get their money, we were just 4 months ahead of schedule. This is like getting your May paycheck deposited on February by accident and then withdrawn. It just isn't their money yet but it will get to them. But the investors can't be wrong or impatient in their greed. People will argue "lowering the amount of employees will result in lower prices", except, of course, we already had very low levels of unemployment way before COVID, and inflation wasn't hitting hard. Sure there was overhiring in 2020, but this itself was a symptom of over-valued companies, no the source of the problem. And even then inflation was driven a lot by companies demand, based on their high prices. As long as companies are not reducing their demand on products and services, we won't see this go down. The other thing is that employee expenses are pretty small compared to other day-to-day sources of costs, yet we are not seeing a rush to cut on those down (because those actually harm the company's profit in the short-term). That is, once you look at the bottom-lines, the same problem of limited profit growth (while revenue has been booming) is still there. The reality is simple: you hold the boat, keep it slow, and rake in the huge increases in profit from just internal optimization.

Companies are not really making an effort to reduce the impact on the long-term, and this solution won't quite make it work. Markets reach equilibrium really well, but they can do this in all sorts of fashion, and will destroy everything in their path. But hey, the investors do not get greedy, and this isn't their mistake. Somehow it's all for us right? Either way, at least I can say this (being one of the many people laid off) this too shall pass. It's just the flow of things.