The tech industry has been hit hard in the past few years.
We’ve all seen the declining job numbers and heard the stories of people being laid off.
But the reason for that is NOT AI like many people think.
What I am talking about is Section 174.of the U.S. Internal Revenue Code which pertains to the tax treatment of research and experimental (R&E) expenditures, including software development costs.
The revised Section 174 tax law requires companies to capitalize and amortize research and experimental (R&E) expenses, including software development, over several years instead of deducting them immediately. This increases short-term tax burdens for tech companies, leading to budget cuts, reduced hiring, and potential layoffs, particularly affecting smaller firms and startups.
CHAPTERS: 0:00 REAL reason for tech layoffs is not what you think 1:58 What is the law? 4:58 Why this is so terrible for tech jobs 6:42 Why tech jobs may be coming back very soon... 8:21 What I would do if I was starting over
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