Imagine you are running a restaurant and normally you get 100 people a night and you service that with 10 staff, and you know for the next year you will get 200 people a night and can support that business with 20 staff and then after it will go back down to 100 people.
So you can choose to:
1. Refuse to hire the extra staff for a year and lose out on the profits of 100 customers a night for a year.
2. Go with the flow, expanding when demand increases and contracting when demand decreases.
Most people will go with option 2 as that is what gets you more money and also allows the economy to respond to price signals in a rational way. This is particularly true of growth companies like Google. The idea of a growth company is not to maintain constant revenues and employment over time. People who go to work for Google should understand that Google will hire more staff when demand goes up. But then they should also understand that Google will cut staff when demand falls.
That it's predictable that demand goes up and down does nothing to change this calculus. It's like people blaming the home builders in 2010 for expanding home building. I mean, when there is an increased demand for new housing, why wouldn't they expand home building?
So you can choose to:
1. Refuse to hire the extra staff for a year and lose out on the profits of 100 customers a night for a year.
2. Go with the flow, expanding when demand increases and contracting when demand decreases.
Most people will go with option 2 as that is what gets you more money and also allows the economy to respond to price signals in a rational way. This is particularly true of growth companies like Google. The idea of a growth company is not to maintain constant revenues and employment over time. People who go to work for Google should understand that Google will hire more staff when demand goes up. But then they should also understand that Google will cut staff when demand falls.
That it's predictable that demand goes up and down does nothing to change this calculus. It's like people blaming the home builders in 2010 for expanding home building. I mean, when there is an increased demand for new housing, why wouldn't they expand home building?