The 2022 Tax Law Change That's Causing Tech Layoffs

A seemingly innocuous change in the 2017 Tax Cuts and Jobs Act, effective in 2022, mandated the amortization of R&D expenses over five years instead of immediate deduction. This significantly impacted tech companies' cash flow, forcing many to lay off employees to cover increased tax liabilities. Smaller firms were particularly hard hit, while larger companies shifted R&D to countries with more favorable tax systems, resulting in US job losses. This wasn't just a tech problem; it affected a large swathe of the US economy, prompting calls for a policy reversal.