Computer Science and Programming

The Tech Job Meltdown

The massive tech layoffs since 2023 aren't primarily due to AI, overhiring, or economic downturns, but rather a tax policy change. Section 174 of the Tax Cuts and Jobs Act eliminated the ability to immediately deduct R&D expenses, forcing companies to amortize them over 5-15 years instead. This created immediate cash flow problems and higher tax bills for tech companies, leading to over 500,000 layoffs. The policy was designed to offset corporate tax cuts in 2017 but has driven companies to move R&D operations overseas and cut US-based engineering jobs. The change particularly hurt startups and growth companies that relied on R&D write-offs to manage their tax burden while investing in innovation.

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www.tgoop.com/computer_science_and_programming/1894

4.1K viewsOct 21 at 08:35

The Tech Job Meltdown

The massive tech layoffs since 2023 aren't primarily due to AI, overhiring, or economic downturns, but rather a tax policy change. Section 174 of the Tax Cuts and Jobs Act eliminated the ability to immediately deduct R&D expenses, forcing companies to amortize them over 5-15 years instead. This created immediate cash flow problems and higher tax bills for tech companies, leading to over 500,000 layoffs. The policy was designed to offset corporate tax cuts in 2017 but has driven companies to move R&D operations overseas and cut US-based engineering jobs. The change particularly hurt startups and growth companies that relied on R&D write-offs to manage their tax burden while investing in innovation.

BY Computer Science and Programming