HN user
"..is more of a function of cash flow potential "
"more of".
If you wanna finesse the discount rate by a few percentage points go ahead. Cash flows contribute more toward the end value number.
in b4 some numpty writes about the fed changing a market set rate.
Value creation is more of a function of cash flow potential on a project than the risk-free rate, cost of equity or cost of debt.
"labour market is not perfectly allocating labour, but it is close enough for practical purposes."
No its not lmao. Do you even know what characteristics a 'perfect labour market' is even comprised of? Go on, surprise me.
Over hiring is one thing.. but that wouldnt be a problem if there was an endless stream of projects to take that are value creating.
So the issue is not necessarily the over-hiring.. more that the large tech firms are running out of projects to take that are value-creating. Which is not surprising - the labour market in its currently state is absolutely not perfect in allocating labour.
It should be noted that fixing tech debt is not necessary value-creating from a financial standpoint. What engineers think is value creating has nothing to do with what a CFO determines to be a value creating project - whose job is to maximize firm value.