I’m surprised not many people talk about this, but a big reason corporations are able to do layoffs is just that they’re doing less. At my work we used to have thousands of ideas of small improvements to make things better for our users. Now we have one: AI. It’s not that we’re using AI to make all these small improvements, or even planning on it. We’re just… not doing them. And I don’t think my experience is very unique.
De-scoping is also a commonly-cited result of higher interest rates. We recently lived through a prolonged episode of zero-interest-rate-policy (ZIRP), which encouraged long-term and risky projects. When interest rates go up, the minimum acceptable return-on-investment (ROI) required to lure investment money away from low-risk investments like government bonds also increases correspondingly.
At the same time, ZIRP completely distorted the market and gave us multi-billion dollar companies that never had a workable business models, but filled offices all over the world with useless employees. I really enjoyed having a chief happiness officer, but I don't think the company needed it.