alt Hacker NewsYeah, this is a justification, but still -- they save single digit billions doing this, while AI capex is $150B (same timeframe) and RL spend is $16B. Feels like you could make the same cut from AI capex and barely notice a difference.
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It’s slightly more nuanced than layoffs = capex. You’re right, they don’t. That said, they do create free cash flow, which the market uses as one important input into the value of a given stock. Moving FCF positively when capex spending is moving it the other way is the real financial accounting move that is happening here.
salaries are opex, data centers are capex, you can't compare them in the same timeframe.
4B over 5 years is 20B, which is significant.
I think any company that is seen to reduce capex right now is going to be the Bear Sterns of this cycle
Doing slightly less than 150b looks bad to investors. Or at least it looks small.
Imagine the productivity gains if they just spent $150B on booze and cake for employees!
My gut feel was that you can't be right, but it looks like you are: cutting 8000 employees * $500k/year total cost to company (rough but useful ballpark figure) is "only" $4B.
Cross-checking against actual expenditure, Meta spent $118B total last year, with the second largest component of total spending being stock comp at $42B, of which vast slabs went to the top leadership that's presumably also not getting fired.