> after the huge hiring spree in the last 2 years.
Would be useful to see some charts of all those "hiring sprees" that happened during the last 2 years at the big US tech companies, and how the curves on those charts would compare to "normalized" charts had the pandemic/hiring sprees not existed (i.e. if the headcount in 2020-2021 would have increased following the same hiring trends of 2019, 2018 etc).
This is my take on it. Everyone went crazy on hiring. Nothing is crashing, it's just the market returning to normal. Well, except for Meta. They're having a bad time lol.
You should see the financials from some Indian unicorns that raised hundreds of millions in 2020-22. $5-6M in revenue, $50M in expenses. No money anywhere.
VCs were way too exuberant and founders were more than happy to mop up the capital.
And here I was, working with a startup that had difficulty landing $500K. It was my first foray into being a founder, but I learned that I do not understand the investing landscape at all.
Matt Levine of Bloomberg has a quote about Adam Neumann that is just... amazing. It's about selling in a sellers market and basically about how he sold We Work shares to Softbank (and taking money out of it).
I see stocks as fundamentally two things. A statistical thing (something that tracks the underlying fundamentals of a business, and a probability (a belief in that company). Yes, this alludes to classical frequentist statistics vs Bayesian statistics interpretations.
> Though the bottom 14% is a pretty big amount to cut, almost certainly some decent performers in that group.
I don't think you can only cut "poor performers" in any sort of bulk layoffs. You can avoid it in aggregate, but there will be enough mistakes, enough teams that need to cut a number but don't have enough poor performers, or even enough high performers who are just on teams that are deemed no longer necessary.
I'd hope so, but it's a lot harder to identify the high performers, figure out where to transfer them to, cut low performers from the teams they're moving to, etc. Unfortunately much easier to just cut teams as the company cuts scope.
It’s very easy to have people who are widely regarded as high performers. But transfers are often limited when layoffs are happening and, in practice, execs often don’t want to transfer headcount to other teams even if it’s probably the right thing to do from an overall company perspective.
Identifying high performers can be subjective, just look at Google's promotion practices. Productive engineers also tend to get paid more, making them an attractive target when reducing payroll spend.
Yep. You have someone who the mythical company “they” think is awesome but their team was disbanded, there’s no ideal and obvious role for them, transfers are mostly on hold anyway, etc. At some point a bunch of people are sorry they couldn’t find a way to keep the person but they can’t really do anything. And parking them somewhere they aren’t really a good fit isn’t ideal anyway.
When the infighting gets serious enough to be obvious to an outside observer is my threshold.
If it's just some folks getting miffed because someone from another department stepped on their toes or made some unkind comments about their team, then that shouldn't be too serious.
I've seen a company's culture effectively be killed overnight because one "low performer" was cut off. Not every impact an employee has is directly represented in their own bottom line.
The company in question was able to stomach this because it would go on to undergo significant structural changes anway but it basically had to start building a new company culture from scratch and doing it top-down is much harder than building on something you've developed organically via your early hires.
EDIT: Since I'm rate-limited right now, I'll elaborate here: it was a company with a number of employees in the low 2 digits at the time and the employee in question had been involved (indirectly via another venture in the same office space and later directly) since before the company even got off the ground. They were in a non-technical role at a tech company but on good terms with most employees and genuinely cheerful about company branding and everyone being "the company" rather than just working on cool tech that happened to be sold by that company. Basically they acted as social glue, both between other employees but also between those employees and the company. Some other (higher performing) employees left after them but I doubt most could point at what it was that pushed them to quit even though this employee's departure was likely a major contributing factor. I could go into more detail but I want to preserve the anonymity of everyone involved, especially those no longer working at the company.
I've seen individuals who are the primary connection between two important departments; say IT and sales, speaking both languages enough to translate. On paper, not much work done; in reality, critical for smooth operation.
That is true at a company level but if you want to have an authentic company culture, you need more glue, not less. Managers can fulfill that function to some degree but the key difference is that managers are in a position of power towards the rest of the team, which changes the social dynamics and makes it harder for them to create cohesion within the team the same way someone at the team's level can. This is also extremely difficult to hire for.
So what you usually end up at 3 or 4 digit companies is astroturf and mandatory fun days. The adhesion to the company will be fueled by sales and marketing, the cohesion within teams will be imposed by team building techniques. It's all very artificial and superficial because you can't grow social bonds top-down.
It can be profitable and when you've grown this large employee churn will likely be less of a problem (see Meta) but it's a much less pleasant environment to exist in as a human being.
Very good question. As I said before, the time to IPO was in 2019 [0] and Stripe should have hastened and IPO'ed then and now it had it's valuation slashed [1] and instead had to postpone and wait, just like the rest of the other startups who were too late. [2]
So, not really a surprise that this happened to Stripe.
It's impossible to cut 14% and making sure those are only bottom performers. You'd have to reorg the whole company if that were the case because some 8 person teams might have 1 bottom performer (and thus become 7), others might have 2 or 3 and thus become (5 or 6 people. They'd then want to add more people to be a big enough team again etc etc, so those would have to come from other teams that then get merged)
They've been doing "layoffs" for quite some time, they've just been trying to keep it quiet. I know multiple people (including engineers) that were let go in the past two months.
“On Tuesday we set a new record for total daily transaction volume processed.”
How does a company breaking records 36 hours ago conclude they need to lay off 14% of the workforce? Even with economic storm clouds on the horizon that seems very jumpy.
Because tech companies underwent an unprecedented hiring spree the last two years. Tech companies were so flush with cash due to the stock market (which also seeped into private valuations) that they basically green lit any headcount request that sounded remotely plausible. This allowed middle managers to grow their fiefdoms so they could add a little line on their resume: "Managed team of X at Stripe." Such spending is totally wasteful and unnecessary.
This is my concern - and it's sad but true. I really cringe worrying about having too many financial eggs in the Stripe basket. But Paypal is no alternative and traditional CC processors are awful. How does one hedge their bets with Stripe? I worry one day we'll hit some transaction "trigger" and then all our money will get locked up in Stripe with no customer support recourse.
Heh, the average forum poster, I believe, drives their car at 100MPH and turns 3 feet before a large hole in the road. :D
As much as people complain about businesses only looking at the next quarter, they do typically have a longer horizon than that. When you have the US fed raising interest rates every meeting and outright saying "unemployment is going to increase" then you should expect pretty much every business to take note of this and adjust appropriately.
"Breaking records" is just how normal people think about "growth". If they weren't constantly breaking records, we would already call them failing or dying because it means they're stagnating. To be considered successful they need to not only grow but the rate at which they grow needs to increase over time or at least not decline.
They are doing what any company does whether the slow down in the economy impacts them or not. They lie and say it impacts them and use it to do a purge.
I worked at companies that were in no way impacted by the 2008 financial crisis (in fact, business was booming). Leadership managed to use it as an excuse to do a hiring freeze and plead with existing employees that they are the lucky ones and they need to work harder during “this difficult time”. Facebook and Google just turned to that page recently in the “ruthless business playbook: version 1 (it never needed to be updated since the dawn of time)”.
It’s kind of psych 101 stuff. Never underestimate the true nature of business: Amorality.
There is some genuine bullshit going on now days because we have record low unemployment and open job positions. If they say it’s all in the service and labor sectors, well, that just means you gave more people an opportunity to earn money. Those people will then go online and spend it, so how the fuck would Stripe get less business? Unless Stripe is genuinely retarded, in which case I wouldn’t blame the 14% layed off, I’d look to replace leadership. But you see, Stripe isn’t retarded.
Be ready for your company that’s in some booming industry to use the recession and inflation as an excuse.
I get your frustration here, but keep in mind: your use of that word is not harming Stripe any more than alternatives you could use, but it does harm an unrelated and oppressed group.
How would you define adult humor? Surely we have some latitude to be a little off color without being straight up racist, (blank)phobic, and vile? We aren’t kids, we have somewhat of a sophisticated ability to be at another level of sarcasm, humor and dark humor.
People who are overweight should not be accused of being similar to corporations that misallocate and overspend (i.e. fat corporation, bloated spending, etc.).
Anemic, impotent, bald, and on and on.
Language is abstract. Some conditions are generally disfavored. Referencing that disfavor abstractly can be meaningful.
Come now. At the root of all of this is an ableist, patronizing assumption: People with mental disabilities must have the language used around them carefully policed because they can't handle the implied disfavor and emotional harm that language may communicate via their own agency, not like the rest of us.
For what it's worth, when I was a kid, I objected to the idea that I was legally compelled to attend public school, I did and do believe it is unconstitutional on a number of grounds and thus I refused to participate. In retaliation they placed me in special education classes and I spent my time in school being called a retard by the other kids on a daily basis. I'm not offended.
Isn't the whole problem with being in a marginalized community that people treat you differently? If people ran around calling you the N word on a daily basis would it be a comfort to you that you aren't actually black?
Even if it were though, it seems obvious being on the receiving of that slur would have significantly less impact on you, as it didn't actually target anything you saw as part of your identity. I don't see how your experience puts you in a position to absolve others for their use of the term.
Personally, I think we should give significantly more weight to folks who are actually in the impacted community (those with intellectual disabilities, their loved ones, etc). The vast majority of whom _do_ object to the use of the word as a derogatory slur.
To be fair at no point have any of the educational experts or administration ever claimed that I am not retarded. It was never retracted I simply left school when I was older. If we trust the experts on this I'm severely handicapped. Who's to say I'm not a retard?
> as it didn't actually target anything you saw as part of your identity
The parent comment already covered this. You don't believe you are, based on how you've talked about this experience. At no point do you say you identify with the word, just that it was used against you.
By this logic, wouldn't people the state labeled as felons, who don't believe they are guilty, be unable to speak about discrimination against felons, even though they personally experienced it at both a institutional and societal level?
Special education you got is not reserved for those diagnosed with retardation. You did not even said that you was diagnosed with retardation. The other kids who called you retard are not experts in this particular diagnosis.
There is no reason for school or experts to retract that claim, because they never made it. The claim was done by other kids.
The problem is how you're using that word. You're using a word that is used to describe actual people in your search for a "vicious" word. Would you feel as comfortable swapping that word out for a different slur targeting a different demographic?
Your anger at Stripe is reasonable, why are you belittling an entirely unrelated set of people in your attempt to express that anger?
Who are you to say to be better? Policing people's language doesn't make you better, it just makes you feel better. Entirely performative just like woke people using "Latinx" when 90% of Hispanic people preferring they didn't[0].
I’m officially an adult, not a young adult, definitely not a kid. I’d be a little careful around kids with that word, and certainly parents with children that may be dealing with it. Kids struggling with a shortcoming and having other kids attack it can be hard.
I like to think we’re not kids here, and some level of off color talk can be somewhat interpreted as humor at best, sardonic, sarcastic, dark humor, and at worst, appropriately inappropriate - as in, we aren’t kids, and I hope you got me.
So for example, let’s not worry that I used the word, because those who are truly retarded are actually retarded enough to not be offended. Imagine if you took what I just literally. Or did I say it to make a point?
What is adult levity, I guess, is my question? What is non pc, non safe for work (within reason) conversation, among adults? Is it a constant “watch what you just said, but I won’t even consider the context of it”.
Adults also know what tact is and what is considered socially appropriate and not. You don't have to be a kid to not be needlessly insulting to a wide swath of people just to show it to a company who isn't going to read or care about what you said.
This always cracks me up. Handicap, disabled, retard, and on and on. The origins of the latest epithet in vogue are harmless. But as soon as a term gets co-opted as an insult, we all agree to ditch it. And why? From what I can tell it's just to placate, to pretend Darwin doesn't exist. Reminds me of my two favorite quotes from The Office:
"There is one person in charge of every office in America, and that person is Charles Darwin..."
"You don’t call retarded people retards. It’s bad taste. You call your friends retards when they are acting retarded."
Is it worse to have some condition of your birth used as a casual insult -- a reminder of your misfortune? Or is it worse to be constantly patronized, often behind your back by throngs offended on your behalf?
The answer depends on your culture and outlook on life I suppose.
These don't happen because they're fun fashion choices. They happen because people are becoming aware. The dynamics may resemble whimsy, but it's more than aesthetics underlying.
Can we abstractly use the terms "bald," "stupid," "fat," "anemic," or "impotent" abstractly and negatively?
All describe generally disfavored conditions folks don't have much control over. Referencing that disfavor abstractly doesn't bring it into being. Ignoring it doesn't make it go away.
This isn't about awareness in my opinion. We're pretending status doesn't exist. We're assuming folks with some condition will be offended and won't be able to handle those emotions with their own agency, so we're patronizing them by carefully policing language. That is, in my opinion, as ableist as it gets.
"The origins of the latest epithet in vogue are harmless." The origin of the word is irrelevant. Words mean things and can be harmful, regardless of the origin of the word. The meaning and context of words can change over time, regardless of the origin of the word.
Bringing Charles Darwin into the conversation does not help your point.
"Is it worse to have some condition of your birth used as a casual insult -- a reminder of your misfortune? Or is it worse to be constantly patronized, often behind your back by throngs offended on your behalf?"
This is a false trade-off. The whole conversation started because someone used a harmful word, knowing full well it was harmful. If they refrained from using the offensive word they knew was offensive neither condition would have happened (casual insult or patronization).
Are the terms "bald," "stupid," "fat," "anemic," or "impotent" harmful when used abstractly and negatively?
Come now. At the root of all of this is an ableist, patronizing assumption: People with mental disabilities must have the language used around them carefully policed because they can't handle the implied disfavor and emotional harm that language may communicate via their own agency, not like the rest of us.
Use of terms like “be better” or “do better” arouses far more resistance in people than the original use of slurs. What leads you to believe you’re endowed with moral authority to tell strangers to be better?
He could say stupid, but that would offend stupid people. He could say crazy, but that would offend crazy people. How about insane? The expression is all the same.
There are lots of injustices happening in this world that deserve your attention. Policing the use of a word is not one of them.
I am honestly amused by this. There are so many denigrating words that have their origin in or deep connotations with intellectual disability, yet somehow “r-word” is the one that gets all the attention. Though, I must admit I’ve seen people going even further and claiming that “crazy” is an ableist slur.
And I am not sure which is worse, being selective or being consistent but annoying.
"The origins of the latest epithet in vogue are harmless." The origin of the word is irrelevant. Words mean things and can be harmful, regardless of the origin of the word. The meaning and context of words can change over time, regardless of the origin of the word.
Bringing Charles Darwin into the conversation does not help your point.
"Is it worse to have some condition of your birth used as a casual insult -- a reminder of your misfortune? Or is it worse to be constantly patronized, often behind your back by throngs offended on your behalf?"
This is a false trade-off. The whole conversation started because someone used a harmful word, knowing full well it was harmful. If they refrained from using the offensive word they knew was offensive neither condition would have happened (casual insult or patronization).
Is "fat" harmful? Could we say a company overspending is fat or bloated without offending? What about "impotent" or "bald," are they harmful? Can we use them abstractly without offending? What about "anemic?"
Lots of conditions of being are generally disfavored as a condition of our biology. Referencing that disfavor abstractly doesn't bring it in to being. Ignoring it doesn't make it go away.
These are all hypotheticals. Is there any serious, non-academic question about whether the word we're actually discussing is harmful? Even if there is, we all have a choice about what language we use and whether to respect the fact that certain words may hurt others. The cost of NOT using the relevant word is ... zero. This isn't an academic exercise. It's an emotional exercise.
I disagree. There's an ableist, patronizing assumption to be analyzed here: People with mental disabilities must have the language used around them carefully policed because they can't handle the implied disfavor and emotional harm that language may communicate via their own agency, not like the rest of us.
Sure, we shouldn't use harmful language and emotional intelligence matters. If you're overweight and talking with someone and they constantly find ways to derogatorily refer to your weight or even being overweight abstractly, they may be a jerk. But if someone online abstractly calls something fat, it's not directed at you. That's part of emotional intelligence in my opinion.
I do see your point and your explanation does add some nuance to my thinking on this topic. That being said, I still think it was a poor choice of words as evidenced by the fact that the majority of the replies are debating the OPs language as opposed to their original point.
You know the euphemism treadmill right? The words moron and imbecile were once valid terms for mentally disabled, and offensive to use casually, but are no longer offensive in that way.
Conversely, people tried to introduce the term "special needs" to avoid the connotations of "retarded", and then "special" became an insult.
The word "lame" is also incredibly widely used and no longer considered offensive even though it's still a valid term for those who have difficulty walking.
I don't have a point, just find the whole thing very interesting. "retarded" is definitely in the grey area where I personally try to avoid using it, but it's still commonly used. Perhaps "crazy" and "insane" are next.
I was not familiar with the term "euphemism treadmill." Thanks for the info, that phrase does help bring some clarity and specificity to the discussion.
What is wrong with using the word "retarded"? It means slowed down.
I could understand your objections if jesuscript called something/someone retarded, but they explicitly wrote "But you see, Stripe isn’t retarded." I think that whether a word is offensive or not depends on the context in which it is used.
About the article you linked... perhaps I'm mentally disabled, but despite its "Why Use of the R-Word Needs to Stop" title, I was not able to understand why the use of the r-word needs to stop. Would you mind to elaborate?
Nope, I still don't get it. And I'm somewhat offended that you're just sending me random links instead of clearly explaining your position.
So, there are certain... specific... groups of people with specific characteristics who are sometimes not well thought of by some other people. And there's a word to refer to this specific group of people, and it's considered a Bad Word. And then we as a society come up with a new word for these people, which is now a Good Word. But in a couple of years, it starts being used as a slur (by the other people who dislike the specific people) and quickly becomes a Bad Word. This process keeps repeating ad infinitum and you're not going to solve it by successively banning each subsequent word and coming up with a new one which is now politically correct.
I don't think the words themselves are the problem here? The problem is that some people don't think well of some specific groups of people and whatever term is being used to refer to the specific group of people quickly becomes a Bad Word. And I don't think we'll solve this problem by banning the Bad Word and replacing it with the Good Word.
Retarded, in this context, is being used specifically as an insult by using a superseded medical term to imply that a person is of lesser intellect. The condition in question, intellectual disability as it is now known, is one that cannot be influenced by a person's actions, but is a consequence of birth.
In western culture it is usually considered offensive to use a characteristic that is a consequence of birth as an insult. For example: "Don't be such a black person/jew/asian" is considered offensive because you cannot control the trait of your race any more than you can control an intellectual disability.
Compounding that, as I mentioned above, the term 'retarded' or 'mentally retarded' is no longer used medically or legally, in the same way that 'moron' and 'idiot' aren't considered diagnoses anymore.
Therefore, using the term 'retarded' is culturally associated - exclusively - with insulting a person's actions by comparing them to someone who is disabled with the implication that a disabled person would necessarily act foolishly or irrationally.
It would be the same as if you needed an explanation simplified for you, and from then on every person who then needed a simpler explanation was then said to have 'needed a Tasuki'. You can surely understand, even if you personally don't mind, how that might cause offense.
After all, you are 'somewhat offended' by someone assuming that a link might provide a sufficient explanation instead of holding your hand through the explanation like someone who lacks reason, empathy, logic and intelligence ... Or do I need to Tasuki that further for you?
> In western culture it is usually considered offensive to use a characteristic that is a consequence of birth as an insult.
The problem is the insult, not the characteristic that is a consequence of birth. "You're retarded" is offensive, while "you're Asian" isn't. What about "You don't have legs" said to a person born with no legs? It might or might not be offensive, depending on the context.
> Therefore, using the term 'retarded' is culturally associated - exclusively - with insulting a person's actions by comparing them to someone who is disabled with the implication that a disabled person would necessarily act foolishly or irrationally.
I get how calling someone retarded might be considered offensive, but jesuscript specifically said that Stripe was not retarded. How is that offensive? Would you be offended if I said you were not retarded?
> Or do I need to Tasuki that further for you?
Oh please do tasuki that further for me, I'm a simple man and not offended by you suggesting so.
Thanks, didn’t mean to offend, just thought the article could explain it better then I could .
> The problem is that some people don't think well of some specific groups of people and whatever term is being used to refer to the specific group of people quickly becomes a Bad Word.
If a group of individuals actively find a word offensive and ask others not to use it, I think it’s generally kind to respect their request.
Word associations may change over time, and it’s great you have that insight. I don’t have a solution, other than recognizing the words we say invoke feelings in others. We live in the now.
Finding someone whom feels targeted by the word and is open to a conversation can help you understand why the word is harmful.
Is it worse to have some condition of your birth used as a casual insult -- a reminder of the generally accepted disfavor of your condition?
Or is it worse to be constantly patronized, behind your back,
by throngs hell-bent on pretending away that generally accepted disfavor (and even Darwin himself)?
I have a term for this, that I think I may have coined. The pauper CEO. You'll find him during economic downturns or at the end of successful projects, turning out his pockets and shaking his head. He was rich when he wanted to hire you, fabulously wealthy during the time you put the long hours in and will be located in the poor house when it comes time for you to collect your share of the rewards.
How much this brings to mind those old black and white newspaper cartoons with the big fat cat in a suit riding on the backs of the poor pulling out his pockets to show how empty they are.
they dont need some excuse, they can do it whenever they want for whatever reason they want. they dont hire the people in the first place if they dont think they need to
Speak volumes for the character of the people who are managing the company. Lay off people who helped you get where you are the moment you feel you won't need them in the future.
What avenues have they exhausted before laying off workers?
For example my company during COVID chose to make a temporary 3% reduction to salaries rather than laying off the people. That was that year's minimum salary increase. Basically they took what they gave that year.
Many companies are very disloyal to their workers, vice versa.
The decision to lay off must be made months ago. The point about setting a new record is to convey and reassure future growth potential to investors and employees (who are also stock holders).
They look at _trends_ as opposed to where they are now. And perhaps each transaction currently loses them money, so the more transactions they have, the more money they lose. There are lots of factors that go into this than just one metric
Speak volumes for the character of the people who are managing the company. Lay off people who helped you get where you are the moment you feel you won't need them in the future.
What avenues have they exhausted before laying off workers?
For example my company during COVID chose to make a temporary 3% reduction to salaries rather than laying off the people. That was that year's minimum salary increase. Basically they took what they gave that year.
Many companies are very disloyal to their workers, vice versa.
> In making these changes, you might reasonably wonder whether Stripe’s leadership made some errors of judgment. We’d go further than that. In our view, we made two very consequential mistakes, and we want to highlight them here since they’re important:
> - We were much too optimistic about the internet economy’s near-term growth in 2022 and 2023 and underestimated both the likelihood and impact of a broader slowdown.
> - We grew operating costs too quickly. Buoyed by the success we’re seeing in some of our new product areas, we allowed coordination costs to grow and operational inefficiencies to seep in.
That first point is key, and I think they're being... less than honest.
The reality is there's very little evidence for an actual "broader slowdown". GDP growth in the US was decent in the last quarter despite a huge decline in home sales and headwinds from inflation, and unemployment remains at record lows. There's certainly some signs for concern, but the only real, persistent decline has been in the stock market (which, honestly, is why this whole period is kinda weird).
The truth, when I look at these stories, is many of these tech companies expected the major changes during COVID, which lead to huge boosts in revenue for a lot of tech companies, to persist post-COVID, and that simply didn't pan out. The result is a lot of businesses with bloated workforces predicated on long-term financial projections that haven't panned out.
But, Stripe can't admit they made a major strategic blunder--the exact same blunder made by companies like Peloton--so they have to blame it on "a broader slowdown" since then they have an exogenous factor they can point to rather than admitting they were just caught up in the techno-optimism of a transformed post-COVID society.
The stock market didn’t really decline. There was a speculative play at the beginning of the pandemic that allowed the shitheads that run that game to do a reallocation of capital from “pandemic hit” industries to tech. That’s why tech ballooned to stupid levels. I say speculative because while it may have been right to reallocate away from, say, Airlines stocks, there was no good reason to run up tech to those absurd levels.
Tech didn’t get hit by interest rates, it’s just a reallocation of that influx of money back to other sectors. People didn’t stop using tech. Now they reallocated out of tech (the way it was supposed to be around 2019), and all these shithead companies are saying “we’re fucked, our stock tanked”. No, your stock went back to healthy levels, your stock was just a bank for two years, that’s all.
Yup, good points. The stock market has been pretty damn volatile, which is to be expected given the broader geopolitical context, the chaos of the post-COVID recovery, etc, but the stock of a ton of these tech companies just reverted to the mean, which is exactly what you'd expect if the changes during COVID failed to persist.
> But, Stripe can't admit they made a major strategic blunder
They quite literally say that?
“In our view, we made two very consequential mistakes, and we want to highlight them here since they’re important:
We were much too optimistic about the internet economy’s near-term growth in 2022 and 2023 and underestimated both the likelihood and impact of a broader slowdown.
We grew operating costs too quickly. Buoyed by the success we’re seeing in some of our new product areas, we allowed coordination costs to grow and operational inefficiencies to seep in.”
There has not really been a broader slowdown in credit card processing volumes. Visa and MasterCard had good earnings and guidance last week. What’s really happened is exactly what BaseballPhysics said - the pace of Stripes share gain has slowed dramatically post-COVID.
What senior management says publicly, what they say internally, and what the actual truth is are not necessarily the same thing. The GP I think is suggesting what they're saying publicly is not necessarily the truth.
Yes, Stripe customers have seen slowing growth post-COVID which is why Stripe’s pace of share gain has slowed. Macro, ie nominal consumer expenditures, has remained strong.
You threw out random metrics and claimed it is still growing therefore Stripe's revenue should not slow down.
I claimed that two of the largest Stripe customers have their revenue slowing down, and this slows down stripe revenue. These 2 are just examples. Uber, Doordash, and many more companies who are Stripe customers also have their revenue slowing down.
Do you think you metrics is more relevant than stripe customers' revenue?
Stripe earns when their customers earn. My metrics is the most direct one.
Also, online purchase is only 15-20% of all purchases by volume. And we haven't accounted for Paypal, Square, and etc. Your metrics is crap...
You’re saying Stripes growth slowed because their customers growth slowed. Given the nature of Stripes business, this is tautological.
I’m saying, Stripes deceleration is not due to macro (ie overall macroeconomic conditions), but a result of post-Covid normalization in the business results of its customers. This is obvious, as overall nominal PCE have not slowed.
Why would I look outside? That's how you find out the weather.
I looked at the data. US GDP growth was positive in the third quarter. Unemployment is at record lows.
Again, there are headwinds. Inflation is high and as a result consumer confidence is low. That's bad. But the only people crying "recession" are people paying too much attention to the stock market. The real story is far more complex, and there's very little sign of a broad based economic slowdown.
Would you care to provide the data you're using to back up your claims?
For example, Lyft and Shopify who are one of the largest customers of Stripe is slowing down in their revenue growth. You can just look at their financials in the past few quarters. They even have layoffs themselves.
That majorly has negative impact on stripe's revenue.
Cool, two companies, one (Shopify) which saw a huge bump in revenues during COVID thanks to a rise in internet purchasing and is seeing the numbers slump back to normal as shopping habits revert to the mean, and the other (Lyft) that's in an industry that declined throughout COVID due to pandemic concerns and hasn't surged back in the face of competition from both Uber and traditional cabs.
Again: I have data about the entire economy. That data tells a story that's mixed but relatively positive.
You have two specific examples, each of which represent a corner of entire economic sectors, and those sectors represent only a fraction of the total economy.
And I'm supposed to conclude that you're the one who has it right?
> Cool, two companies, one (Shopify) which saw a huge bump in revenues during COVID thanks to a rise in internet purchasing and is seeing the numbers slump back to normal as shopping habits revert to the mean, and the other (Lyft) that's in an industry that declined throughout COVID due to pandemic concerns and hasn't surged back in the face of competition from both Uber and traditional cabs.
Why would your explanation matter?
The conclusion still remains. Their revenue slows down. Therefore, stripe's revenue slows down.
For sure, it is not growing faster.
You didn't contradict my point at all.
> Again: I have data about the entire economy. That data tells a story that's mixed but relatively positive
Stripe's revenue growth does indeed slows down. There is no dispute of that.
If Stripe was making 1 trillions USD more, they wouldn't have laid off people, obviously.
Now I or the founders claim it is because the macro economic is bad. You might contradict this part.
Well you have been taunting it for 2 comments now. Can you share your evidence? Or we should continue quibble a bit more first?
I think the fact that they used "internet economy" and not "economy" in their letter is basically a shorthand way of conveying exactly what you say here, though in a less self-flagellating way.
> The reality is there's very little evidence for an actual "broader slowdown". GDP growth in the US was decent in the last quarter despite a huge decline in home sales and headwinds from inflation, and unemployment remains at record lows.
I thinks as a payment processor, they are in a better position than most to predict sales trends. This effect might be restricted to their segment of the market. But if the payments they process are down significantly, then does it matter (to Stripe) if parts of the economy that they aren’t involved in are more robust?
I’m not excusing actions, but they have more data on the economy than most, just from their position in it. They may have thought (their part of) the market was going to keep growing (the mistake), but that doesn’t change the fact that it isn’t.
Stripe’s reach as a processor probably isn’t broad enough to see those kinds of trends. Their processing fees are quite high so there’s huge industry sectors that will just never touch them.
Stripe processes in the area of $350-400bln annually, which is equivalent to about 1/10th the GDP of the U.K. That's absolutely enough volume to see macro trends as it relates the classes of merchants they support.
Who said anything about being the largest? The question was whether they have sufficient data to make predictions about future trends, especially as it applies to their business.
Agree 100% with you. Also having talked to recruiters there I found them absolutely disorganised. At least here in APAC. Might be better stateside.
They gave me the impression of not really knowing what org to build and job descriptions/titles/org changed wildly during talks (and then abruptly ended, leaving me with a terrible impression).
The one thing they kept going on about though is how they're the biggest bestest most promising of unicorns and how much they'd be in 'super growth mode'
>The reality is there's very little evidence for an actual "broader slowdown".
I'm not sure about 'broader slowdown' but in the industry I'm in we've seen a massive slowdown in signups and expansions in the existing customers. When we speak with our customers, especially banks, they are seeing massive slowdowns on their side.
Someone has bad metrics here, and when most of our customers across a wide range of industries are laying off, then I'd say that's pretty broad.
I always wonder if the chicken or egg comes first. Maybe I'm living in a bubble, but I didn't see any broad slowdown until companies started laying off, saying there's this broad slowdown that's totally coming soon. Now, with people being laid off and tightening their spending, leading to an actual slowdown, the prophecy is fulfilled!
The last recession had a pretty clear cause you could point your finger at: The collapse of subprime mortgages. This one (presumably we're about to experience one) and the first dot-com crash didn't seem to be caused by anything besides a critical mass of businessmen agreeing "Well look at that, we're headed into an economic slowdown!"
Inflation goes up, cost of borrowing money goes up (cars, mortgages) -> less money to spend on non-essentials and the essentials get pared down to the minimum.
One thing that i think hits Stripe harder than most is all the people who quit their jobs to do their own thing. You know they all setup Stripe accounts for e-com and other invoice/payment functionality. I think reality is pushing them back to regular day jobs and those new Stripe accounts are going to sit with zero transactions.
The blog post literally says Stripe has higher transaction volume than ever.
Anecdotally my indie friends all report modest revenue growth this year while my big tech friends report more work for less money (due to equity grants decline).
From the data I see, the “reality” is not the failed indie dev but the failed inefficient big tech company.
> The reality is there's very little evidence for an actual "broader slowdown".
I wish I could be in your bubble. In mine, people have been spending more on less month after month. Businesses are seeing slowdowns. Things are going to be even worse when the winter heating starts.
Anecdote here, but I sell vintage clothing, electronics, and furniture on the side and have noticed a substantial downturn in sales this year. Lower than pre-pandemic levels.
Beyond pc explicitly admitting that they made the mistake you're saying they didn't, Stripe and other payment processors, especially internet payment processors, are extremely sensitive to economic forecasts. I can think of three obvious reasons that current market conditions would tell them to prepare for a macroeconomic downturn:
1) The housing market is the largest asset base in the world's wealthiest country and changes in that market reliably predict macroeconomic downturns (1).
2) E-commerce transactions are supported more than the economy as a whole by discretionary income. Interest rates drastically change consumers' spending habits; when rates rise, discretionary spending drops as consumers save more (2). You can infer that the GDP of e-commerce decreases at a rate higher than the larger economy because of that drop in spending.
3) Stripe has a very high retention rate for its customers. That counterintuitively increases the volatility of its stock because of increasing interest rates (3)
Beyond the appeal to intuition you made around tech companies assuming that post-COVID demand would remain, there are plenty of reasons that a payment processor that primarily services e-commerce would need to downsize. They are simply more sensitive to macroeconomic conditions.
>GDP growth in the US was decent in the last quarter......and unemployment remains at record lows.
That is correct. However, I work as a consultant and deal with a lot of senior execs at large companies (mostly non-tech) and I can tell you that they are all in a panic right now and expect an absolute economic bloodbath next year. It's going to become a self-fulfilling prophecy. It really feels like Wile E Coyote after he's run off a ledge but hasn't realized it or started falling yet. Very weird.
I would argue CEOs generally find it optimal to "overgrow" during boom periods and "cut" during bust periods. This is why we see the routinely observe the pattern. It is not because a bunch of confused CEOs are constantly making mistakes. This was expected, even planned for (if not explicitly). This is how startups work. Overgrow, then cut, then overgrow again. Layoffs, especially around moonshots or non-revenue-generating teams, are only problematic for PR purposes.
It's true but it would be nice if they were honest about it. It makes sense as a strategy because, if the bust doesn't come (or as soon as you think), then you'd much rather be in the position of having grown to take advantage of it than not.
It seems to me they are moderately open about it. "We expected things to keep growing, acted on that, it didn't, now acting on that."
I suppose they could say "we thought the economy might contract in 2022 as it would eventually, but that risk was more palatable than not growing and missing out vs our competitors if the contraction didn't happen."
> We were much too optimistic about the internet economy’s near-term growth in 2022 and 2023
A lot of this was driven by covid-cautious WFH culture. Someone working from home in the Bay Area in January 2022 might not realize the extent other industries are back in the office and other regions are done with covid.
14% seems like a very high number to me to axe at once, how have you got 1 in 7 employees that your business doesn't need to function when it is growing.
Ah. It all makes sense now. It is cheaper for them to layoff with a decent 3 month severance than it is to pay high interest on the debt that is funding their salaries (interest rate will stay high > 1 year, going by Powell’s comments).
I am glad they did it transparently, but I wish they had been more open about this fact. Shifts the entire perspective IMO.
With 3x growth during the pandemic it seems that the layoff would be avoidable by reducing future growth factor. So what the letter doesn't say is that they layoff people to have better numbers to show to investors, not because it's not sustainable.
IDK, there seem to be plenty of big tech jobs still open. I just got one. Overall, there are about 1.9 open jobs in the US for every person unemployed.
Only a few pay the $400k-$500k Google level salaries you hear about for mid level employees.
It might be relatively easy to find a $120k job but that doesn’t mean every laid off person can now walk into Google with ease when even big tech is laying people off or freezing hiring.
Not everyone needs to make $500k? I don't understand this argument. Many companies are hiring seniors right now for $200k base. Small, medium, and large companies. That is a great salary.
Don't compare yourself to the .1% of software devs.
We are talking about a hypothetical situation where someone was asked to be content with a $200k salary in a high cost metro.
In this scenario the person has made the decision that it isn’t really that great of a salary considering cost of living, yet you’re on here getting angry this person is being “entitled”. No decision was made to accept this salary as a good one in this scenario.
I would be jumping with joy to make 200k a year with where I live now. However if I was in offered the same job in the bay area for 200k a year I would not be nearly as happy.
They are for several reasons. They are lying about the price of rent, saying it is higher than it is. They are insisting that you need to live in Manhattan, when there are places about half as cheap very close to Manhattan.
I'm not saying the area is inexpensive. Don't argue with a strawman.
>They are for several reasons. They are lying about the price of rent, saying it is higher than it is. They are insisting that you need to live in Manhattan, when there are places about half as cheap very close to Manhattan.
>
>I'm not saying the area is inexpensive. Don't argue with a strawman.
Don't misconstrue what I am pointing out what you're doing. They are not lying about how expensive rent can be there, this is simple to verify.
People want to live where they want to live. Get over it.
or if you’re talented and have in demand skills don’t settle for a $200k salary because people online told you you were entitled for asking for higher comp in high cost of living areas.
I continue to find it funny that we’ve come to the point where workers are guilted and shamed because they demand more for themselves.
Even if you’re somewhat disciplined about spending you are probably spending $40k a year easily in a higher cost metro on normal everyday expenses/personal travel, leaving you with maybe $20k-$30k to tuck away. Difficult to save up for a family or house on $20k/yr to save/invest.
I demand more for myself. I would also be ashamed convincing people I don't have enough as it is. It's possible to prefer to make $500K over $200K and not argue that $200K is peanuts to live on. Argue that you prefer the even more lavish life that $500K can provide you for the skills the market deemed you have.
Demand more for yourself, but don't pretend like you can't live on $200k. You're worth a lot but making up shit about rents is not going to help your argument.
Totally ridiculous and also untrue. Living in Manhattan is a luxury, there are affordable options 20-30m from NYC. You can get a 2br for under $<2k <30m bus ride from NYC. $1600-1700 if you look and get a little lucky.
Even in Manhattan, there are plenty of 2br available for <$3k. Zillow is bringing up hundreds of results. You're not living large, but you'll have money for savings.
Most people who live in Manhattan don't live there alone, anyway. That luxury apt for $6k is a great place to live with 1-2 roommates.
the fact there exists 2 bedroom apartments for under $3k doesn’t mean that’s the norm in Manhattan. there’s very few and it’s clearly nowhere near the median when the median 1 bed is over $3800.
and you’ve mistaken what I said if you think I’m suggesting it’s “hard” to live on $200k in NYC. the point is more that it’s just a normal salary in a high cost area at this point, and after taxes and retirement savings and regular monthly expenses you’d be lucky to save $30k a year. hard to save for a house or start a family and care for dependents without being close to paycheck to paycheck at that income.
First, I'm looking at apartments on the market RIGHT NOW that are under $3k. You can apply for these right now.
We're also using an extreme, living in Manhattan is a luxury. It is one of the most expensive places to live on the planet. Even using this extreme your argument doesn't hold water. You would do well on $200k paying $3.5k/m in rent. That's high, but shouldn't kill you.
I would argue that using the median or average in an area that has so much luxury housing is also dishonest. I know people paying over $5k for STUDIO APARTMENTS in NYC.
They love the building, I dunno!
JC median 1br is $3k, north bergen nj 2br is $2,400.... but there are plenty of 1 and 2br in JC and NB that are under $2k on the market right now. Thousands of units, actually.
Including kids, or if you have a stay at home spouse or something, you're right. You can't really live in the area on $200k. That is a problem. Your wife needs to work and bring in at least $80k, especially if you have more than 2 kids. But we're kind of moving the goalposts here, aren't we?
I feel bad for employees that have waited a decade to cash out.
No reason why Stripe couldn’t have gone public in 2020-2021 at a huge valuation but from past interviews it sounds like the decision to remain private was just a founder preference thing because “focus” or something. Now the IPO market is completely frozen and its valuation is likely cut in half from peak, at least.
Genuine question, what’s the real value proposition of Stripe?
They do have a slick integration process for outside developers, but is that enough for to justify the financial values attached to them in the recent past?
As one of the earliest stripe customers, yes, that was the reason why we switched to them from Authorize.net.
Developer docs and easy API integration was, and is still, their "stickyness". But the eco-system of new products they've added have grown that moat to make it easy and cost-efficient to offload more and more of the financial and subscription stack onto Stripe. It's a virtuous cycle
Is Stripe profitable? I heard some of its financing is from PE and bank funding, which tend to be less tolerant of money losing or low profit operations. If they are not profitable they will need more capital eventually or to lengthen their runway.
The second they go public it triggers a 6-12 months window after which all of their employees can cash out. This will, inexorably lead to an exodus of their most senior peeps, and when it happens, will probably be ground zero for the next gen of fintech startups.
Delaying going IPO this way, amongst other things, is about retention.
I don’t think this is correct. Then your theory is that every tech company that went public in last 2 years have experienced a brain drain that Stripe has not.
Lock up periods aren’t set in stone. They probably didn’t need to raise money and could have done a direct listing and let employees cash out immediately.
whether you can sell on secondary markets is restricted by the company. pretty sure Stripe has not let most employees sell on secondary markets. personally have not seen them solicited on Forge or EquityZen myself.
A fun question to ask when interviewing at a startup is to what extent they block or facilitate employee share sales/transfers. Also check with private markets to see what their experience with that company is.
How do they prevent you from selling on the secondary market? Would love to see that clause on their options agreement. Most companies have first right of refusal which gives them the option to buy them first.
There are a few clauses but the gist is pretty simple: approval of any transfer of option or underlying share must be approved by the board of directors + they may also exercise their right of first refusal.
A "brain drain" doesn't just mean that people actually quit and leave. They can also dramatically ramp down the intensity because they are suddenly in a very comfortable financial position and the big risk they have been working so hard to avoid (losing their valuable equity for whatever reason) is off the table. It sucks, but that's the way it is for many people. It's hard to keep up the super high level of intensity after so long, especially when the downside case is mitigated by newfound financial independence.
Most tech companies have four-year vesting periods. Lots of people at my current employer, which IPOed in 2020, are still vesting shares from pre-IPO stock grants. As a result, those people have a very strong financial incentive to stick around.
Stripe is a rarity in that it issues one-year equity grants, which would make it more susceptible to brain drain after an IPO compared to companies with longer vesting schedules.
To some extent, but if you have been around since the early days it’s unlikely your golden handcuffs will be worth as much as your long-vested options.
To a certain extend yes you're right. But they've overextended. Realistically there won't be a fertile IPO market at their size/level of valuation in years now. So unless they up their salaries, it's doubtful some people who joined in hopes of cashing out after 1-2 years would be willing to wait an additional 4 or 5.
For anyone that has been there anywhere near a decade, there's been opportunities to cash out partially, at very good valuations. You'll see that a vast majority of early employees have departed, and they didn't do that by giving away their early options, or getting crushed by AMT by exercising without liquidity.
While it might have been nicer to IPO by now, early employees are doing extremely well.
The trend of companies taking huge late stage rounds was always going to blow up the public tech IPO market. Many companies get too used to free money and operating with little inspection. By the time they feel like they "have to go public" the growth rate has peaked and they haven't learned to operate with any level of financial scrutiny. Result is private market investors do great and all too frequently public markets bomb in 6-12 months or sooner.
Yup! This has been the trend for the last 10 years. Facebook was probably the last well run company to go public, probably because it grew during the pre-Zirp era.
There's a healthy secondary market for companies like Stripe. Employees there can sell a good amount of their stock already (and have likely been able to for years).
> John and I are fully responsible for the decisions leading up to it.
What are the two of you doing to show accountability? Are you slashing your own future stock grants, cutting your own salaries, diluting your positions with stock grants to everyone else? What's the consequence for this decision on your end that shows you're accountable for what happened, not just responsible for it? Since you have no intention of cashing out, the valuation cut is ineffectual as a consequence to you, and the support/severance package will probably have minimal impact on your own bottom line since it's all largely been accounted for (payouts of planned bonuses, existing unvested stock etc)
They know what accountability is. That's why they never use the word.
Yeah we know you're responsible for it, but how are you being held accountable for it?
No one will remember in two years time, but my hope is it'll factor into candidates' decisions around whether to pursue a career with Stripe. If I've got senior executives without accountability, it's a distraction to my ability to deliver the product as well as to lead my own teams supporting their vision because it means I can't rely on them, and this outcome with absolutely no accountability behind it is a good enough reason for me to never want to join Stripe in the future.
Good examples of self accountability? Sadly not. (Edit: see huffmsa for a good example)
Good examples of accountability to the board? All over. But boards care (by mandate) only about profit unless specified otherwise. There's no incentive for a board to care about whether people are put out on the street either; it's one of the major reasons for why unions exist and are successful: they provide a mechanism for accountability that ties adverse employee decisions back to future revenue loss.
Tl;Dr: nope, and that's sadly by design because why would anyone be self-accountable when the consequences hit the wallet? I was hoping for a ray of light to pierce the dark.
Unions have a range of outcomes for business success. Yes, some may hold management accountable and ultimately help companies; others screw over everyone besides long tenured employees. Suppose Stripe was unionized and somehow the union had convinced management to stop hiring in February 2022 which is the level they’re reducing headcount to now. Would the laid off employees been better off in that world without a year of Stripe employment, income, and benefits? It’s very unclear.
>somehow the union had convinced management to stop hiring in February 2022
Why would the union do this? It seems like a contrived example to prove a point. Unions would conceivably benefit from more hires because they would have more union membership.
My anecdotal experience is that unions are a massive benefit to laid-off employees. Laid off employees were given 80% pay while they waited with a known re-hire date. In other cases, they are given priority when the company is looking to rehire with an unknown rehire date. Unions have downsides, for sure, but I don't think your example points them out here.
There are plenty of unions that keep supply low. Nearly every labor union in California, for example, has underfunded apprenticeship programs for exactly this reason. I’m surprised you aren’t aware this is a phenomenon. Unions answer to their current members, and there’s plenty of incentive to keep the current membership smaller.
And my example was simply continuing the original poster’s insinuation that a union could have helped management avoid the over hiring mistake they were about to make by making the consequences of that mistake greater.
To be clear, I was technically a non-union employee in a union shop so that may explain some of my ignorance. (Most of the white collar employees were non-union. The controls engineers were in a quasi-union status without actually joining the union. It was a weird situation because of some ongoing legal battles.)
What you said does make sense though. The union apprentiships were extremely competitive, possibly because they were constrained to low numbers.
The salaries of Japanese execs are indeed tiny by US standards. However, as Kalzumeus says, instead of paying money so you can buy status, Japanese companies give status directly: company cars with drivers, company villas, very generous expense accounts, etc etc.
Not a CEO, but I'm reminded of the incident on a Navy vessel that struck a fishing boat and resulted in a number of fatalities. The captain was actually off the vessel at the time and not in charge. He still resigned because he was accountable to the decision on who he left in charge.
(Tbf, I'm sure he was told to resign. But that's largely because the Navy has tried to institute a culture of accountability, albeit imperfectly)
Remember, “companies don’t exist to make you happy. You know that, right? The business doesn’t exist to serve you. The business exists to serve your customers,” reminds McCord.
I think whatever a leader does which isn’t ritual suicide when announcing layoffs is going to get criticism. People in power hired when expecting an uptick and fired when expecting a downtick.
That's kind of the fundamental problem of megawealth: You can't actually be held accountable for anything short of "ritual suicide". When a senior exec or CxO screws up, what conceivably could punish them? Lose their salary for a year? Ineffective. The wealthy make more from interest on their investments than they could ever need to live. What else could punish them? Their stock value going down? Oooh.. Mark Zuckerberg's personally lost $76B in the last 12 months, more than the entire shareholder value loss of Enron's collapse. Zucc still has so much money that an uncountable number of generations of his offspring will still never need to work again in their lives.
Why do people keep working and earning more when they are set for life--what actual practical purpose does megawealth serve once you've guaranteed your standard of living for you and your offspring? The purpose is lack of accountability. Megawealth means you can spend every remaining day of your life screwing up, and besides doing something illegal that lands you in jail, you'll never suffer a consequence.
> Why do people keep working and earning more when they are set for life--what actual practical purpose does megawealth serve once you've guaranteed your standard of living for you and your offspring?
I think this is the wrong question to ask -- "what end is this a means to anymore". One of the largest challenges in life is pursuit of meaning, and Zuck has, at least he thinks, found it. He still has consequences, but they are higher up on Maslow's hierarchy of needs.
You could argue that those in charge should have enough at stake to feel the burn of a layoff like this, but this issue isn't dissimilar to biology. We often make local (and temporary) sacrifices on behalf our own bodies, knowing "we" will still be around afterwards to enjoy life and the removed parts won't (removing limbs, wiping out blood cells, organ removal, etc.). This isn't 1:1 with Zuck, because Zuck is more than just his role in Meta, but close enough.
People keep working and earning more because they genuinely enjoy doing it. Would you really prefer the traditional alternative, where rich people become full-time idlers and look down their noses at those of us who have jobs?
> Would you really prefer the traditional alternative, where rich people become full-time idlers and look down their noses at those of us who have jobs?
Actually, yes, as it could open up career opportunities for others further down the totem pole. At almost every company I've ever worked, the CxO, SVP, VP roles were all hogged up by already-set-for-life people (or people who became set for life by working there a few years). They just hang on to those very senior roles like barnacles, while the rank and file fight each other their whole careers for a few open Director or manager roles.
If already-rich people could just admit they won the game and gracefully resign to "spend more time with their family" or "look down their noses" or whatever rich people like to do, maybe some of those Directors could be promoted to VPs and some of those managers could be promoted to Director and so on. This would help refresh the tree a little, cycle new blood through leadership, and help even more people climb the ladder.
No, they’re making a business decision and they should simply treat it as such and avoid the whole “please understand how hard this is for me, the guy who will continue getting a very large paycheque” thing, that makes it worse.
If they just give it to you straight, there’s no bullshit - the people fired may be mad or upset but they'll be mad or upset regardless because being fired sucks. If they start hand-wringing, talking about how painful it was for them and how they take full responsibility people will ask “hang on, how exactly is this painful for you? how are you taking responsibility, what are you doing about it?”
"Today, effective immediately, I, Gavin Belson, founder and CEO of Hooli, am forced to officially say goodbye to the entire Nucleus division. All Nucleus personnel will be given proper notice and terminated. But make no mistake. Though they're the ones leaving, it is I who must remain and bear the heavy burden of their failure."
I read it as "this was our decision" as opposed to "this is our fault". Basically they are saying not to blame and middle managers, investors, board members or whatever.
There are rarely if ever any serious consequences to top execs screwing up wealthy companies.
Such execs are usually already so wealthy that they never have to work another day in their life, no matter what happens or how much they screw up.
They can always find other prestigious, high paid jobs, and sometimes even get rewarded with huge amounts of money from the very companies they screwed over.
Isn't that how things should be in a society? We should encourage people to make bold bets and start real companies like Stripe which offer valuable services. I am happy that they made a bold bet, just like I am happy people start companies when they can easily join an established company and have a comfortable life.
Just to be sure, there is a big difference between a bold bet based on your market or product insights vs putting everything on black on the roulette table.
> "They're rewarded for making bold bets, whether or not they pay off."
If leaders were rewarded for being conservative instead of making bold bets, Linux and open source would never have taken off, nor would most tech startups.
“Do you care to know why I'm in this chair with you all? I mean, why I earn the big bucks?
I'm here for one reason and one reason alone. I'm here to guess what the music might do a week, a month, a year from now. That's it. Nothing more. And standing here tonight, I'm afraid that I don't hear - a - thing. Just... silence.”
Imagine that they DIDN'T hire more people when they grew by 3x. See how much people complain about the grind at AWS. People are extraordinarily overworked. We'd be reading "Why I left Stripe" posts and calling out the CEOs for not scaling up properly.
Stripe was already known (in my circles at least) for being a ~grinder~ long hours type place. Not neccesarily because they're understaffed but because it was a work work work culture.
That's what I've seen (from the outside, with some friends who work at Stripe) as well - it's the old investment banking / management consulting work culture, i.e. your job is your life.
preparing for an eventual end to the free money rally instead of over-hiring isn't exactly something I'd consider to fall into the realm of psychic abilities.
is "we're a fast growing business but this cannot last indefinitely, let's not overexpand" ´really too much to ask for? It's constantly happening to tech companies because of their internal fantasies.
If they under-expand, people will similarly complain when their stock languishes compared to other stocks and the board will replace them with someone telling a growth story. The only thing the stock market rewards is growth, so is it really their fantasy?
"Their psychic abilities failed? A coin flip came up tails but they bet on heads?"
Isn't it interesting how we want to absolve execs of all blame when they bet wrong and get unlucky, but declare them geniuses and masters of business when they bet right and get lucky?
Like creating a company that gives thousands of people jobs? Or creating infrastructure to enable millions of web based businesses the ability to mindlessly process payments? God, I miss the old HN. This place is reddit now.
Who built the railroads? J. P. Morgan, or the millions of people who worked for him?
Not surprising to see execs and founders on here patting each other on the back and trying to convince everyone that they deserve their millions because of how innovative they are all the "value" they create. Looks like the old HN to me.
I don’t think I’ve ever seen anyone here express the sentiment that execs and CEOs are geniuses for leading a profitable company. If anything, it seems like it’s us engineers who like to consider ourselves brilliant, and that the simple-minded management should be so lucky to have us.
> There are rarely if ever any serious consequences to top execs screwing up wealthy companies.
That is because any exec worth her salt would negotiate a generous golden parachute even before starting the job. And why is she able to do that? Because there are very few competent candidates available in the market. If you think the job is easy, just go and get one of those exec positions and you will learn.
Yes, but that is not possible to know a priori. So people rely on heuristics. And if things go wrong, execs want to make sure that they have a golden parachute.
Do you have an idea to judge exec competence effectively? If so, you can have a very successful company based on that.
I think the ball is in your court when launching an ad hominem attack (before we even get to the question of whether it is relevant) It seems like that should be easy enough to provide some evidence for, if it’s true.
I was talking about the alleged 'responsibility' by the billionaire owners. Yet said responsibility doesn't lead to job loss or anything. It's empty words.
They have to live with it and feel like shit and still run THEIR business. You make a mistake, you don't fire yourself and give up everything you work for, you do the best you can and move on. Don't like how they operate? Build your own business and hire thousands of people and then when you make a mistake fire yourself instead.
> "they take responsibility" what does that even mean? It's meaningless.
It means they're not blaming anyone else for this. The opposite of taking responsibility is assigning blame. They aren't assigning blame, they're taking responsibility.
Severance pay. We will pay 14 weeks of severance for all departing employees, and more for those with longer tenure. That is, those departing will be paid until at least February 21st 2023.
Bonus. We will pay our 2022 annual bonus for all departing employees, regardless of their departure date. (It will be prorated for people hired in 2022.)
PTO. We’ll pay for all unused PTO time (including in regions where that’s not legally required).
Healthcare. We’ll pay the cash equivalent of 6 months of existing healthcare premiums or healthcare continuation.
RSU vesting. We’ll accelerate everyone who has already reached their one-year vesting cliff to the February 2023 vesting date (or longer, depending on departure date). For those who haven’t reached their vesting cliffs, we'll waive the cliff.
Career support. We’ll cover career support, and do our best to connect departing employees with other companies. We’re also creating a new tier of extra large Stripe discounts for anyone who decides to start a new business now or in the future.
Immigration support. We know that this situation is particularly tough if you’re a visa holder. We have extensive dedicated support lined up for those of you here on visas (you’ll receive an email setting up a consultation within a few hours), and we’ll be supporting transitions to non-employment visas wherever we can.
That's how they're supporting their employees, but this would've already been accounted for anyway (the vesting, potential bonuses, pay through Feb 2023, etc), so this isn't accountability so much as it's "we'll, we won't see the immediate benefit until March"
Would've been a different story for instance if pc/jc were diluted with new grants to departing and existing employees.
What more do you want? They are paying out millions in cash ("out of the goodness in their heart"... ie they don't have to and people shouldnt expect) which is directly reducing the value of the equity, which impacts them more than anyone else by a huge proportion. Handing out equity grants makes no little sense to me and is unlikely what these employees want... "hey you're fired, here's some stock at our latest valuation pre correction".
I don't want anything; I have no intention of working for stripe.
But in the face of fundraising headwinds, a decision to cut costs like this only improves (or stabilizes anyway) their ability to raise at a valuation closer to what they're looking for in this down market. The severance package here only deferred the benefit to the bottom line, but it wasn't a consequence for over-hiring and potentially disrupting lives.
In other words, the layoffs actually benefit the founders directly, and it ends up becoming a perverse incentive to over-hire and lay off again with the next boom/bust. Successful accountability means people actually avoid doing shitty things.
> the layoffs actually benefit the founders directly, and it ends up becoming a perverse incentive to over-hire and lay off again with the next boom/bust. Successful accountability means people actually avoid doing shitty things.
This is exactly how business works. You should not be surprised. Their job is to ensure the company survives and that is really it. Everyone is expendable. None of these employees were guaranteed a long leisurely employment at Stripe.
Businesses change overnight. But it's always a cyclical market. As the founders I would expect them to benefit themselves. There doesn't have to be consequences, only change and adaptation. It's just business, they aren't your family.
To add to this, the lack of commitment is reciprocal. Employees can walk out the door any second... Stripe pulled these hundreds of employees from somewhere (I doubt they were all college grads). It's just business on both sides.
> The severance package here only deferred the benefit to the bottom line, but it wasn't a consequence for over-hiring and potentially disrupting lives. In other words, the layoffs actually benefit the founders directly...
This is all complete nonsense. They're handing out millions of dollars they have no obligation to pay. Unlike cheap talk on the internet, this actually costs them quite a lot. This is extremely generous.
For the sake of argument, let's just assume that all of this is true and they are acting in self interest and everyone is horrible all the time.
I would still take the deal. I would work there if they hired me. If there are enough people like me to continue the business, then this thing turns out to not be shitty. Only time will tell.
I think the issue comes from the idea that in tough times, good leaders take their lumps before they expect it from their team. There's lots of colloquialisms that seem to fit this:
"Leaders eat last"
"We cut the fat starting at the top"
"Leaders need to have endurance beyond their troops"
I have no skin in the game either. The severance packages are commendable, but I don't think it actually answers the OP's question about accountability. I don't want to speak for the other commenter, but I think what they're looking for is some indication that the leadership has personally sacrificed something equal to or exceeding what they expected out of their subordinates. Giving out millions in severance, while commendable, isn't a personal sacrifice.
The company is not a charity. I expect no more from a company than to pay me for every hour I work. I can leave anytime I want and they can let me go anytime that the relationship is not mutually beneficial.
I keep a go to hell fund, an updated resume, an updated career document, a strong network of former coworkers, managers, and external recruiters and make sure my skillset is in line with the market.
I expect nothing from managers. When the pay/bullshit ratio starts going in the wrong direction, I have just as much agency to leave as they do to let me go.
You don't expect them to pay you? Treat you with respect? To observe labor laws? Surely, you expect something from them. Being willing and able to walk away is not the same thing as saying you have zero expectations.
> Giving out millions in severance, while commendable, isn't a personal sacrifice.
Do y'all expect them to cut their arm off? I'm not defending pc but the OP's comment wreaks of corporate SJW.
> but I think what they're looking for is some indication that the leadership has personally sacrificed something equal to or exceeding what they expected out of their subordinates
Millions (and billions) come out of their valuation as a result. It's not like they're getting whisked away on a golden parachute.
> Millions (and billions) come out of their valuation as a result. It's not like they're getting whisked away on a golden parachute.
It's the exact opposite. They're more likely to stem the bloodletting of their valuation with layoffs extending runway or boosting profitabiliy than see it get worse.
Not at all. But we seem okay with management having a larger upside, given how the pay structure ratio has continued to evolve over the last few decades. I think it's only reasonable that, with outside rewards, management expects to take on outsized risk.
It feels like the social norms have shifted to accept one but not the other. In other words, we're only supportive of an asymmetrical risk:reward ratio that favors management.
> In other words, we're only supportive of an asymmetrical risk:reward ratio that favors management.
Actually we have, the risk:reward ratio is generally consistent across founder/management vs IC.
Are you simply saying that because CEO to IC pay ratio has expanded drastically in recent years that it's not accurately accounting for the risk? You realize that ~x% cut in workforce includes managers right? In fact, often times cheaper more productive ICs stay and expensive middle management is first to go. Seems like that is accounting for it no?
I thought this discussion was centered on the CEO pay. To that extent CEO pay has ballooned and I see very little evidence that their risk has been commensurate with that growth. If anything, the structure of contracts seems to indicate the opposite.
It's not out of the goodness of their heart. Stripe has to retain its existing employees and still attract talent, and the economic situation we're experiencing is only temporary. If they screw people over as they are leaving, they are shooting themselves in the foot.
No, the shareholders and the board are paying that out. It’s still dodging the original question.
It’s something a lot of us are sensitized to these days because of all the narcissists who “take full responsibility” which seems to mean to them that taking the blame is a dire punishment and no other consequences are necessary.
Being the scapegoat is not a real consequence. Not getting that villa you were talking to an agent about is a consequence. Not getting your bonus at all is a consequence.
This seems extremely generous to me. We don’t have to torture the founders because of economic conditions. It’s risky enough being a founder and this’ll have a downwind impact on them as well. For example, paying all these benefits means fewer hires, means less output, means their stock options might be worth less.
If you're getting rid of 14% of your staff I expect you to be making a lot fewer hires and having less output, as a result of having less employees, is also not surprising. Those are completely unrelated to the severance they pay their employees.
The general argument for high CEO pay is that it is a reward for their skill in the job. By that argument, if there is evidence that they're making mistakes that negatively impact the company shouldn't that directly impact them in terms of their compensation?
Goodness, I’d voluntarily take that deal anyday. 3.5 months of paid vacation at the salaries Stripe pays? Yes please.
I just read the rest. On top of 3.5 months pay, they get accelerated vesting, cash payment for healthcare benefits, all unused PTO paid, and more. That’s incredible.
It should be in your contract, which means it was up for negotiation. Unless that's what you mean. While there's such high demand for tech workers, I would expect to see people being smarter with their contracts and picking up on things like that, start setting precedents.
At the moment the precedents are still heavily employee biased, but you ask for whatever you want in your contract during negotiations. Negotiate your sick pay, negotiate your PTO, negotiate your vesting schedules and exit terms, negotiate your hours and time in lieu policies. Negotiate your Intellectual Property terms. That one is super common to see lopsided toward the employer. We don't have unions or award rates, so we also miss out on some of those protections, hence why we need to make sure it's in the contract.
Even the nicest, fairest business owners I've worked for will start with industry standard contracts that do their best to shaft you, because it's industry standard and they don't see it as lopsided. But I've never had trouble negotiating for this stuff to be made clearer and fairer.
> It should be in your contract, which means it was up for negotiation.
Generally, employees in America do not have contracts. While plenty of things are open for negotiation during the offer/hiring process, I doubt you'll get an exception to a corporate policy on paying out on PTO if it's not something they already do.
That said, IME, accrued PTO has always been paid on departure (voluntary or not). For this reason, most of the places I've worked heavily encourage (or even require) taking PTO, because it's a liability on their books.
> Generally, employees in America do not have contracts.
Is that true? The company surely has terms for you, like expected working hours, terms about your sick leave, performance and health terms, out of office expectations, intellectual property disclosures and NDAs? Non-compete clauses? When does all that become binding if not through a contract?
A typical American tech worker's "contract" covers IP assignment and NDA. None of the other stuff is legally binding, and either side is free to change it or walk at any time.
I wonder if this is partly why upper-end salaries get so sky-high when compared to other country's tech sectors. It might be accounting for a level of risk that you could be cut off at any moment, especially in at-will states.
It seems common in the tech world, though? Amusingly, my current contract is from when the company was small, and explicitly guarantees provided lunch.
> It should be in your contract, which means it was up for negotiation
I've never seen this in the US. The only things typically up for negotiation is the sign on bonus/equity and base pay. If you start trying to negotiate vacations and holidays, you're going to look pretty silly.
I'm doing my best to understand this and be empathetic. Best of my brief research you haven't got any law bound entitlements so whatever the "status quo" is has been set by employers. So what I'm understanding here is that it's not even an agreement, it's just an understanding? Trying my best not to be inflammatory, as I understand this is a cultural thing for the US. But in a country with so little workers rights and entitlements, that high end workers are not even able to protect themselves with contracts seems silly.
> The Fair Labor Standards Act (FLSA) does not require payment for time not worked, such as vacations, sick leave or federal or other holidays. These benefits are matters of agreement between an employer and an employee (or the employee's representative).
> The only things typically up for negotiation is the sign on bonus/equity and base pay. If you start trying to negotiate vacations and holidays, you're going to look pretty silly.
Everything is up for negotiation. Just depends whether or not you have options. I have seen PTO negotiated in the US.
We are specifically talking about Stripe workers. But yes, I’ve chosen a contract job with even less rights than a full time employee at certain times in my life for more pay.
On average US software engineers make much more money so even after any deficiencies like not paying holiday pay we still come out ahead. And even then, most companies will pay out holiday pay anyway regardless of state law, just as a matter of company policy.
For what it's worth, Stripe is the only place I've ever worked that did not pay out accrued PTO. It does so only in jurisdictions where it is legally required.
My company switched from PTO to “unlimited time away” to avoid paying out accrued PTO upon departure. Their original home state didn’t require it, so they didn’t. But then they acquired some companies in states that did require it and also let us all work remotely. It was cheaper for them to drop formal PTO and replace it with hand-wavy “time away”.
Wow. Can’t do that here (Australia) - I think to have an unlimited leave policy, you’d still have all employees accrue annual leave (PTO) at the legal rate, and then just let employees take free leave once their annual leave balance reached zero. Any balance you have when you leave (or are made redundant) then has to be paid out.
In California, accrued vacation is part of wages and must be paid out as part of wages. However, unlimited PTO policies typically don't accrue vacation.
In Washington, it's "read your contract." If your contract doesn't say that they pay out accrued PTO upon separation, they don't.
Not sure if frantically interviewing for a new job during the holidays when lots of tech companies are also laying people off can be considered a vacation.
Yeah. You need six months of emergency fund, minimum. I would say close to 1yr honestly, depending on your risk tolerance, for senior tech roles, unless you're willing to take a real shit job while you look for something else.
that’s not what i’m referring to. these layoffs are macro driven so you’re competing against a lot of people. and it’s harder to schedule interviews around the holidays so on average you need more time.
In my experience, if you’re job hunting and don’t have an offer in hand by November 1st, you’re probably not going to get one until mid-January.
The “normal” interview process takes 4-6 weeks in my experience from application to offer/rejection. That is doubled between Thanksgiving and New Year’s Day.
There are lots of tech companies hiring too. The hard part is finding them, and convincing them you are the one. Most of the resumes I see for a "senior" programmer don't have the experience.
Yet... we still see ageism in hiring too. I'm continually surprised at people advertising for 'senior' positions that require 3 years of 'foo' experience. If that's how you label 'senior'... don't be surprised when people with little experience apply for senior positions.
Not poking at you directly. I've got 25 years of experience. I was on a team a few years ago with people with... 2-4 years experience. We were both labelled to the end client (contracting company) as 'senior developers'. It's just weird all around. When everyone is 'senior', it loses any useful meaning.
Although 3 years is a little low, I work with plenty of people with 5 years of experience who are just as good as the best programmers with 25 years. The early years experience matters a lot, but the difference between 5 and 25 years is insignificant.
The levels are fresh out of school, have learned enough to not need hand holding, and able to make good decisions about code. You cover them very fast. There is a staff level about that, but most people don't reach that level. There just isn't need for too many of them.
Maybe if you're the janitor, but based on the quip about the salaries Stripe pays, the parent is presumably looking at this from a developer's perspective. That's a payout of around $73,000.
If you are handed $73,000 and still need to frantically look for a new job, something strange is going on.
i’m not referring to running out of money, just the idea that it’s harder to interview during the time around the holidays and immediately after, and we are in a period where these layoffs are macro driven so lots of people are competing against you for the same roles
If you're not out of money, why the frantic search? It isn't going to sustain you forever, but if it takes you six months to find a new job... oh well?
You've got taxes on that so 40% and then health insurance at Cobra rates. Granted it looks like they said they will pay that for 6 months. Not sure if that is taxable as well also not sure what the individual contributions are.
> I thought the open enrollment period was already over for HealthCare.gov. Can I still enroll?
> Yes, if you have just lost your health insurance, you are eligible for a 60-day special enrollment period. You can work with an enrollment assister, an insurance agent, or use HealthCare.gov to enroll in a new insurance plan. You may also qualify for a special enrollment period if you have experienced a life event such as moving, getting married, having a baby, or adopting a child.
> You've got taxes on that so 40% and then health insurance at Cobra rates.
Your taxes would only be 40% (actually 47%) if you make beyond $500k a year. Cobra rates are quite affordable. I was on Cobra when I was laid off due to covid, and it was $550 a month for top tier healthcare.
The tax rate is only that high for amount earned after $500k too. And only for those in a few states like California.
$550 for gold level insurance is expected for someone young, which I guess you are.
You can ballpark almost anyone’s premiums based on the figures in link below. I would use Omnia Gold or Omnia Silver HSA numbers, and plus or minus 20% for your state.
> Cobra rates are quite affordable. I was on Cobra when I was laid off due to covid, and it was $550 a month for top tier healthcare.
Those two statements are in odds with one another. $550 is quite a large sum of money to put out each month, particularly when you don't have an income.
Yes, you should have quite a bit of cash as an emergency fund. There are government subsidies available for health insurance, but they phase out if you earn more.
Generally, decent insurance costs anywhere from $400 to $1,200 per month, depending on age of insured, plus up to $9k out of pocket maximum for individual and $18k for families, per calendar year.
So to adequate insure one’s self for healthcare expenses, you would need $18k or $36k for out of pocket expenses (since things can happen at end of calendar year), plus $400 to $1,200 per person per month minus any premium tax credits. For a young family, I would guesstimate $24k to $30k per year in premiums minus any tax credits.
Basically, be poor enough to qualify for free healthcare, or earn enough to be able to spend a few tens of thousands of dollars for a healthcare emergency, but try not to be inbetween.
If it's a one time payout (to be clear, I'm not that will be the case here? It was for me the only time that I was laid off), I think the withholding would be calculated as though that single payment were a regular salary extrapolated to the entire year. This is similar to what happens if you receive a bonus; to compute the withholding they assume your annual salary is $BONUS * $PAY_PERIOD. So you'd likely be taxed at a much higher rate on that single payment than you would be amortized over a year like a salary is.
You'd get that withheld money back after filing taxes, but most people who are laid off would prefer to have that money now.
If Stripe is making regular salary-like payments instead of one lump sum, then the taxes would be pretty much the same as always.
You're not wrong that it is strange that we would force one to be completely uprooted from their home only because they didn't have a job for a few months.
Compare that to the average experience of the vast majority of people who aren't a software engineer and a person might be forgiven for thinking it looks like an incredibly privileged vacation.
Why not just collect the paycheck and chill with some open source work for a bit while casually interviewing? If you have expenses that don't let you do that fine, but the stripe severance is more than my yearly spend.
This is better than standard in the US but I'm not sure I'd be happy if I was one of the laid off employees.
That 3.5 months and healthcare buys them some time to start interviewing and line up new work. However, they're competing with everyone else that's been laid off recently. There's another article on HN right now about Lyft laying off staff. Meta is getting pummeled in the stock market right now and Google has recently had hiring freezes. I'm not sure now is a good time to be looking for tech work in SF.
Unused PTO should be paid out. That was already earned by the employees.
Accelerated vesting is only good if you can afford to use it. How long do they have to exercise their options? What's the secondary market like right now for Stripe stock? Are they allowed to sell stock currently or required to hold it? In a worst case scenario, people could be unable to exercise their options because they don't have the savings to cover the tax bill and want to hold onto cash because they're unemployed and need the liquidity.
As for healthcare benefits, that's a result of a very broken system in the US and not something that should be celebrated.
The last time I got laid off, my severance was basically enough to buy a bus ticket to the unemployment office. What they're doing here is incredible. (Almost felt compelled to name names here but took a breath)
As a European the severance for a large company doesn’t sound all to different to what I am used to. Normally you have 3 months by contract plus some add a month per year tenure. Healthcare costs, career support etc is normal for larger/successful companies. Then certain countries (not the company) will pay 80percent of your salary for 2 years to find a new job.
Happy that some companies also start to do this in the US, but yeah it sounds that this is not a given. It will generate a better transition and avoid serious mental problems/personal issues.
This is pretty normal in my experience. Having experienced layoffs (never as a target, always from the side) for the last 25 years. There are probably edge cases, but some amount of severance (based on time with the company, typicall), healthcare coverage, bonus acceleration, etc, is all completely normal.
On HN, of course, you're mostly only going to see the edge cases posting, so it's easy to get a distorted view of normal.
Yeah I have been laid off once, at Fortune 15 company. We got, at least, 2 month of severance pay. And 2 weeks extra for each year with company after first 4 years. It wasn't a tech company, so I always assumed that this is pretty common in mass lay offs.
> As a European the severance for a large company doesn’t sound all to different to what I am used to
Note that Europe is a big place, and laws are not standard for layoffs/redundancy. I got laid off this year, and basically got one week's severance pay, plus my two weeks notice.
In Ireland, I believe the standard amongst larger companies is one month per year served, but the cap is very low so generally tech companies will make much of the payout conditional on an NDA.
For Norway it's usually three months both ways. For bigger layoffs it can be "anything" from three months and up. I was outsourceed once, and got nine months pay from day 1.
So I got doubly paid as soon as I found a new job. Good times. :)
I worked with a person that was laid off with 6 months severance that was not reported to the state. They immediately filed for unemployment, and then the company hired them back as a contractor 4 or 5 weeks later. We labelled him the triple dipper and he said getting laid off was the best thing that ever happened to him and that he's basically rolling around in money coupled with a one month paid sabbatical.
In Texas, severance pay has no bearing on unemployment insurance. I did same thing but told unemployment office about severance pay, since I was too worried about breaking any rules.
They told me I could win jackpot but they would still legally owe me unemployment pay. It is all about actually woking. If you work and then get paid for that work, that's when you cannot claim unemployment pay.
So, technically, if you do contract work and still claim unemployment, then you are breaking the law.
Yes, I believe he was technically breaking the law by under reporting. My limited understanding was that he was able to avoid issues by billing as an LLC versus an individual and didn't draw a paycheck from his LLC while on unemployment, he just let the money stack.
>As a European the severance for a large company doesn’t sound all to different to what I am used to.
IME 14 weeks minimum is really generous in the US.
I've been at 2 companies where it was 1 week per year of employment. At one company they added on 1 month of severance during a really large layoff. The tenure at tech companies in the US tends to be quite short, so getting 14 weeks probably unusual at typical tech company.
Depending on the political environment of the state one is in. It could be capped at a useless amount, or the unemployment department minimally staffed. I know someone in NJ that has a pending status for 2 years with no response or ability to contact the state, and they have 8 years of W-2 showing they paid unemployment insurance.
No, you can see tons of Reddit posts about people not being able to speak to anyone at NJ unemployment. You can try calling at anytime of day and the machine will say (after 130 seconds of automated prompts) that all agents are too busy and to call back the next business day.
In the event you do get through, you reach a line level agent, and they say a supervisor has to look at the case, and to wait 6 to 8 weeks before calling back. That’s it, nothing else.
In the silver league of US tech, which is broader than most people seem to think, the standard severance pay is a nice cool 0. Usually the only conversation is about all the agreements they try to convince you that you have to sign for no compensation as they’re escorting you out the door.
In my social circles we roughly categorize the tech industry into faang, gold tier, silver tier, and wood tier.
Faangs are obvious, good tier is up and coming businesses who pay and act like faangs. Examples are brex, stripe, Uber(at least back in the day, no idea what they’ve been up to the past year.
Silver tier are the places that still pay well above average jobs but don’t go into the mega compensation and suffer a talent drought as a result. Places where they’re paying 120k total comp for a senior engineer and won’t part with any equity because the leadership can’t emotionally handle the investment needed to compete for engineering talent for reasons that I could go on for hours about.
Wood tier are the companies that need tech but still try to pay <80k because they’d never pay high wages to any employee or still think they don’t need software and end up with some real shit engineering
How does this work at companies that are very distributed geographically? The WARN act talks about "mass layoff affecting 50 or more employees at a single site of employment."
I'm genuinely asking this question - I'm not trying to be a smart ass.
I worked at a tech company (~3500 worldwide) that had an office in almost every major US city area (e.g. Bay Area, NYC, Boston, Chicago, Seattle, and a bunch of Tier 2 cities as well (Atlanta, Raleigh, Houston, etc), and remote workers (e.g. sales) as well.
They had a big layoff and in theory they could laid off 500/15% people worldwide without laying off 50 people at each site. Would that still trigger the WARN act?
Yeah this is pretty good. Would make me feel good about getting a job at Stripe for sure. My current company I'm sure would pay NOTHING and we don't get bonuses anyway, so...!
I find it interesting that they're saying they're doing so bad financially they need to cut 14% of their workforce but are also doing well enough they can pay 14% of their payroll for 3.5 months of no work + Bonuses + PTO + Stock + 6 Months of Healthcare? Doesn't seem to add up
Morale for the remaining employees would drop and attrition would jump if they all watched their fellow employees get kicked to the curb by their current employer.
Tone aside, asking if op thinks Stripe have done the maths is an interesting question.
How did Stripe end up with expenses they need to reduce if they did the maths? Yes, their world changed, but at some point they made choices that were incorrect.
They take the hit but the payouts eventually end. What’s described would not have been that uncommon for big companies back in the day. They take a financial in a quarter and they hope they can move on with a lower cost structure. Often doesn’t play out well of course.
Much of the severance is legally mandated pay in lieu of notice for a mass layoff, the rest is (usually, and presumably in this case) an inducement for a release of any potential claims and to sign non-disparagement agreements.
Of course, its presented as largesse to the recipients, but its very much not.
It's simple, they aren't bleeding cash, the business isn't in trouble, but they aren't seeing enough growth to justify employing all those people for another few years. It's exactly what the email said, they over-hired.
They're only paying this much severance because 90 percent of it is legally obligated by the state of California, where the vast majority of their employees work.
60 work days must be paid out, which is 12 weeks of work. So essentially they're giving people only an extra 2 weeks of severance to sign away their right to a wrongful termination lawsuit.
As has often been Stripe's way as a company, they are setting the bar for what other companies should strive toward. Has there ever been a more generous severance package posted to HN?
As the owner of a (much, much) smaller company, I'm inspired by how the Collisons run their business, especially under adverse circumstances. Yes, they fucked up in estimating the future market, but they are in good company among CEOs and non-CEOs lately.
That's not the founders taking personal responsibility unless they are paying for those benefits themselves. That's the company taking care of the employees, which is great. What GP was asking is how are the founders demonstrating accountability.
That is a remarkably generous severance package. My COVID severance when my company's local office went under was 2 weeks pay for 8 years of service. Healthcare terminated at the end of the month and they were sure to lay me off in the middle of the last week of the month.
Well done stripe. Maybe others can follow your example.
if you walk out on Friday and start a new job on Monday does the severance still apply? This setup is incredibly generous in my mind to the point where there's a lot of incentive to get laid off. If you got another job in a couple days and severance was still paid by Stripe then that+PTO+RSU+typical signing bonus is one hell of a payday.
> if you walk out on Friday and start a new job on Monday does the severance still apply?
If you "walk out" i.e. quit, then severance doesn't apply. Severance is for people they're laying off. But, yes, if you get let go on Friday, you can work elsewhere on Monday, unless Stripe has specific non-competes in place (which aren't legal a lot of places).
> This setup is incredibly generous in my mind to the point where there's a lot of incentive to get laid off. If you got another job in a couple days
When we're in an economic downturn, and a lot of other companies are conducting layoffs or hiring freezes that is easier said than done. Definitely was a rough experience in 2007/08 during the last big one.
Severance is usually one large lump sum, but I suppose you could set it up that paychecks keep coming even though you're no longer at work. Depends how they set it up.
But either way, they should still come even if you get hired immediately (except I guess hired back at Stripe).
while this is certainly great (at least in the us standard), it's still different from "John and I are fully responsible for the decisions leading up to it."?
This is what I hate about the internet rage machine. No research was done by people automatically assuming that the company was just going to send the employees packing with “thoughts and prayers”.
That’s very generous severance and the company doing right by its employees.
I don’t know how long the process is for non US citizens. But in my over 25 year career, and changing jobs eight times as a software developer, it has never taken me more than a month from actively looking to having a couple of offers. 14 weeks and bonus and paid out PTO is more than enough.
I had "trouble" finding work over the summer. But the actual details are that I was asking for $275k and $300k at two companies. Both gave me a verbal offers, but hiring froze. The third company, gasp, wanted me to come into their office (20 minutes down the street).
I also lived through 2001 and 2008. I think the last 12 years of perpetual growth have created some amazing expectations from people. I can only hope that, once I get laid off, I'll have to "settle" for some $175k job in an office after my 3 months of severance runs dry.
I have some health issues that started in the 2008 recession. So every time they flare up I think about that trauma.
I kept my job through that but it was a very head-down situation. Just put up with this shit until the market recovers. Then the company had a good year and so a bunch of us stayed to get the bonus. So February 2010 saw nine of us who had quit in 8 weeks, sitting in a bar celebrating our exodus. I asked if it was worth it (staying for the bonus).
One person said yes. Another said maybe. Seven people regretted staying. The bonus amounted to less than 20% of salary and we were under market at the time.
We used to have coffee and discuss how much we hated our boss Mike (not a pseudonym. Fuck you Mike, you brown nosing ladder climber). My peer called our favorite table the Conspiracy Table.
Listen, Software Developers should not give up whatever we got so far. If we pushed for these salaries and quality of life, hold on to it. Don’t sit here and tell the tribe “some of you want too much”.
Few professions earned this quality of life, doctors and lawyers, and I can promise they aren’t sitting around going “maybe we’re spoiled, maybe we oughtta curtail our expectations”.
No, take the life you have and don’t go backward. Most people working aren’t given an ounce from their industries, many of them still fight for basic stuff to this day.
Tech should not be okay with these levels of lay offs and still revere these companies. This is the stuff the car industry did when they just offshored jobs, and collapsed entire cities (Detroit). Why should we be okay with the same playbook?
Absolutely! I declined multiple offers this summer because they would have been pay cuts. We agree.
> Few professions earned this quality of life
Well that is a can of worms. I'm going to guess Doctors deserve much better. I think the unfortunate reality is that, maybe, tech workers haven't earned this quality of life. Instead, we are the lucky recipients of decades of growth. This is something that isn't even shared in Canada or Europe, much less Asia, in terms of salary.
> This is the stuff the car industry did when they just offshored jobs,
Agree, this is going to be bad. Now that we have shown productivity with work from home, how tied are companies to these high USA salaries?
I'm not ok with it. But I also remember that when I'm running around looking for a job, the people with that job are making the demands. This is something that tech workers haven't actually experienced for a decade, but every other industry has.
> okay with these levels of lay offs and still revere these companies
Revere these companies? Founders are taking risks to make a LOT of money. They aren't here to make employees money. I don't revere these companies, and I don't put any stock in their Family Friendly or work life balance encouraged, marketing nonsense.
> Absolutely! I declined multiple offers this summer because they would have been pay cuts. We agree.
This is financially nonsensical. Every month you delay working you have to make more to get the same amount over the course of the year.
Just to make up a number, if your target was $120K and they offered you $110K and it took you a month longer to get $120K, you would need to make over $130K just to reach $120K.
I would take close to what I wanted and then change jobs if something better came along.
>This is what I hate about the internet rage machine.
I think the issue (also related to how we interface with the internet) is that most of these replies completely dodged the question. The OP was asking about personal accountability, not about "how are your going to make this as palatable as possible?"
Consider two scenarios:
(1) A manager fires half their workforce, but gives them a generous severance. In response, the manager gets a massive bonus.
(2) A manager fires half their workforce, but gives them a generous severance. In response, the manager forgoes their salary for a year for being the one making that decision.
The second has personal accountability because they are making a personal sacrifice beyond what they expect from their subordinates, even though the employees are affected equally. I'd be willing to bet one organization has more institutional trust than the other.
My ex worked in a tiny office, the company got into trouble and her boss was asked to cut $###K from payroll. He had to cut at least one person that they really needed. It was bad.
In theory he had to cut her too, because he was something like $30K short of the goal and her salary as an office admin would have more than covered that. But then he’d have to do her job. His solution was to cut his own salary enough to hit the target to the decimal point.
They landed a new contract a handful of months later and were eventually able to hire back one of the people they lost.
I think he may have even backdated some raises they missed out on. He was her best boss.
Does it not matter when you're deciding on employment though?
If the through-line wasn't obvious, it's that leadership quality matters. Trust matters. When you decide to stay with a company or invest in a company, you don't have the privleged access to know that their actions "won't have any effect" on your ability to pay your bills in the future. In the context of uncertainty, leadership quality matters.
No, any job is just a method to exchange labor for money. I expect nothing from them but to keep their end of the bargain. I keep myself in a position where I just need a job, not the specific job.
A job is not a marriage. I’ve been through many “uncertain times” in over 25 years.
I depend on my savings, network, skillset, updated resume and updated career document, not “trusting” a for profit company.
Do you not expect anything out of your teammates? Do you have no expectations from customers? From politicians?
At a certain point, how you manage interpersonal relationships can limit your path. Sure, you can just devolve everything down to a transaction (even a marriage) and maybe that works for you. And you can create a life free from any obligations or commitments, outside what you want for the aesthetic life of your choosing.* But it doesn't seem like it would be the type of existence many people envy.
* David Brooks book "The Second Mountain" does a good job explaining the downsides of this approach.
> Do you not expect anything out of your teammates?
I expect the same from my coworkers as I expect from myself - that they do their best work for 40 hours a week.
> Do you have no expectations from customers?
I work in the cloud consulting department of BigTech. The expectations of my customers are spelled out in detail by high priced lawyers.
> From politicians
Hell no.
> At a certain point, how you manage interpersonal relationships can limit your path. Sure, you can just devolve everything down to a transaction
A for profit business and your relationship with your company is transactional. Especially in any large company. The CEO of my company wouldn’t know me from the other 1.6 million people that work at the company.
The 14 weeks of severance alone is probably worth ~$60 M [1]
Scrounging on the web suggests that Stripe may be EBITDA-profitable but not GAAP-profitable. $60M (perhaps double that with all the other benefits laid out here) is easily enough to delay GAAP profitability by a quarter or two. That may not seem like much, but it has a huge impact on investor sentiment.
How does this delay GAAP profitability? They paid out 3.5 months severance and their full 2022 bonuses. If they hadn't laid these people off then in the next 3 months (1 quarter) they would have paid them 3 months salary and their full 2022 bonuses.
To parent's point: no actual consequences for the people making the decision despite the claims that they are "fully responsible".
"Feeling super bad about this" is not actually a consequence.
I worked at a company that had massive layoffs, leadership claimed it was the hardest day of their life, two weeks later they were literally laughing about the people they laid off when they realized they already had to rehire for some of the positions.
Saying "we take full responsible" here doesn't translate to accountability, it means they want to start the conversation by absolving themselves of any guilt.
Maybe you need to reread the question. I think he's asking how this will affect you personally, not what you're doing for the people being layed of. This doesn't answer that question at all or at least comes across as a politicians answer.
> PTO. We’ll pay for all unused PTO time (including in regions where that’s not legally required).
I'm sorry, but the wording rather funny. That sort of suggests that it was somehow an option to not pay for used PTO, even if they are legally required to.
I want to say the same thing... this is a very generous severance package.
At one startup... I got called into the HR office on Monday morning, laid off with no advanced notice, and was only offered two weeks severance provided I signed a non-disclosure agreement that banned me from saying anything negative about the company for two years (and there was a lot I could've said).
That company also lied big time about their financials to get me to join in first place. So I learned some valuable life-lessons...
I have no horse in this race, but an observation: the extraordinary value of this severance package is not a response to the GP's question. They asked how Stripe's leadership is personally demonstrating accountability, not what the corporation is doing to soften the blow.
I was in a somewhat similar situation - got laid off in 2020, with a great severance pay etc. I was on a working visa which got canceled within a couple of weeks (not sure how it works in the US, I was working in a different part of the world). The market was low so it was difficult to find something quickly to get another job visa. On top of that I couldn't get back to my home country, since the borders were closed due to COVVID. I had to live for several months on short-term visitor visas and had to renew the visas constantly - it was a separate bueracratic hell. Eventually I found a job and got a permanent visa, but these months cost me and my family a lot.
So here's the question - would it be (legally?) possible to put the visa holders on garden leave and pay them i.e. $1/m until they found a new job? Or at least do it temporary, for like 3 months or so. Because honestly, I didn't care at all about the money and stuff, the visa problem was absolute hell.
Immigration support should read like this if it is to align with even a grain of truth.
"We know that this situation is particularly tough if you’re a visa holder. Basically you are fucked. Here is a dildo sign to show you in picture what your situation is. There is nothing called non-employment visa. So here is a picture of two dildos if you are still reading this"
Why are any of those things necessary? Are those people unable to get other jobs or go launch their own startup (putting that massive severance package to good use)?
These risks come with the territory; there's a whole rest of the world outside of Silicon Valley where things move a lot slower; beyond that, there's still another rest of the world where people are literally struggling to put food in their mouths.
Working in a startup and getting big salaries and stock options, but possibly losing said options, are all part of the risk of doing a startup, and the people who took the initial risks will always deserve a bigger piece of the pie.
Given the labor market you could even argue those getting laid off are coming out ahead of those they're keeping. Getting laid off into a super tight labor market with that kind of severance package is almost like winning the lottery.
I want to make it clear that i'm 100% supportive of what Stripe is doing though. It's exceptionally generous and unorthodox to do this for your (soon to be former) employees.
Ya know.... Founders and CEO's are responsible every day. They created the business for people to have jobs, they have to deal with it when the business cannot support the jobs. When things in the macro economy change, sometimes the business can't operate at the same level it was before.
People like to <poop> on CEO's & leaders in good times, but employees often forget that while the employee can just go get another job, the leaders have to keep hundreds, thousands, of people employed while also retaining customers and dealing with investors. They have to deal with keeping those hundreds/thousands employed every...single... day.
Please. Stripe is privately held so let's look at a market comp, SQ.
SQ 2021 Revenue: $17B
SQ 2021 cash and short term investments: $5.3B
Stripe 2021 Revenue: $12B
Similar businesses, operating in the same market, with the nearly the same number of employees (about 8000). Barring exceptional circumstances, we would expect their financial health to be roughly similar.
You said it yourself:
> the leaders have to... [deal] with investors
The economy is contracting and their share price is falling. They could afford to dip into cash and keep everyone on board but their investors are more concerned about propping up the valuation. They don't have two shits to give about the people they're letting go.
Disagree. A CEO does not cut employees during a time when others are laying off unless business doesn't need / can't support/ not prudent to retain those employees.
Why? Because periods like now is the absolute best time to steal market share from established companies - which would grow the team and business. Startups (competitors) begin to post less risk because they'll be hard to find financing.
So - if growing the business is a CEO's top responsibility...if the leadership felt they could steal business from others that experience attrition - they would. My guess is they don't seem to feel that way about the current moment.
> The economy is contracting and their share price is falling. They could afford to dip into cash and keep everyone on board but their investors are more concerned about propping up the valuation.
They're worried about surviving the contraction, nobody knows how long it will last and that cash only goes so far.
> They created the business for people to have jobs
No, the created the business in attempt to get wildly wealthy and unfortunately they can't do this without also having to hire a bunch of people. They certainly don't create the business for the sake of employing people.
> People like to <poop> on CEO's & leaders in good times
In my experience the opposite is true, in good times people can't help but <polish the nob> of CEO's & leaders, since easy employment and good pay make the fundamentally exploitative nature of their relationship less visible.
> employees often forget that while the employee can just go get another job, the leaders have to keep hundreds, thousands...
of thousands of dollars in their account even when they "fail".
The key difference is that if I don't get another job, I lose my house and ultimately the ability to feed myself. If I don't play the game I quite literally am sentenced to death. The CEO of that lays off thousands can very easily spend the rest of their days in comfortable retirement at any given point.
I need to sell my labor to live, CEOs need my labor to get richer.
I don’t understand responses like this. They are returning to February headcount. The executive team also made the long term planning decisions which gave those people jobs for the last 9 months (and income for the next 3). Would the right thing to do have been not choosing to give more people a living for 13 months at least? Are companies to never speculatively invest in growth?
A lot of people would genuinely prefer for companies to never make risky investments in growth, yes. If you’ve ever wondered how the Japanese norm of lifetime employment can be sustained, this is why; many employees prefer it to a system where they might discover one day that their job was dependent on a speculative investment that didn’t pan out.
In a lot of ways it is, and it's my understanding (although I can't claim any personal knowledge of this part) that in the past couple of years things have been changing. But I've had conversations with people who know their job is worse than it would be at the Stripes of the world - worse pay, worse office, worse benefits, worse hours - and yet they're still not interested in applying elsewhere because they're confident they can stay in their first job until retirement. Some people really do value stability and job security above anything else in their career.
Why act like the founders have to grovel and beg for forgiveness? They don't. If they had been extra cautious during covid in expectation for the economy to take a dive would stripe be in a better position today? Absolutely not.
They are taking responsibility by admitting their strategic error. That's enough. They have not performed poorly as executives they are not going to punish themselves in the manner proposed by OP.
> Are you slashing your own future stock grants, cutting your own salaries, diluting your positions with stock grants to everyone else?
This sounds a bit emotional to me. Layoffs can be an emotional topic, but let's reflect for a moment.
I guess the thrust of the remark is to put some sort of public "shame" on companies that perform layoffs (especially such fast ones) for the major inconvenience they cause for thousands of people. I suppose the fear is that without any "Shame" these companies will hire and fire spuriously without repercussion?
Relatively speaking I think Stripe handled this well. Yes it was a mistake to hire these people, but now that you're here it would be a bigger mistake to keep people you don't need.
I wonder if every company would be so forthright about this or whether many would just "cut" "low performers" at an accelerated rate over a year with no severance.
> the thrust of the remark is to put some sort of public "shame" on companies that perform layoffs
I don't think that's what he meant. He is asking whether the CEO is just blowing hot air when they say "we take full responsibility..." or whether there are consequences to their bad decisions, i.e., responsibility for those decisions.
I'm not a native speaker, but I think taking responsibility does not necessarily imply consequences. The opposite of taking responsibility is assigning blame (eg "our underlings hired too many people it was their mistake").
That's probably true, and likely why the commenter finds that a CEO "taking responsibility" is so obnoxious.
Either the CEO is implying that they aren't always responsible, which is bogus, or they are stating an obvious fact as an empty platitude, which is most likely the case, or perhaps they're implying that to them "responsibility" means more than just "taking the blame" which is probably not the case here.
not even necessarily CEOs... just the phrase "taking responsibility" seems to have been diluted to usually mean nothing in most corporate settings.
software dev here - was working with a client, and a pm was pushing some not-great idea. I pushed back - "this is not core, not important, shouldn't be a focus, other things are more important, and already decided".
Pushback from them: "no no no, this is vital. Look... if there's a problem, I'll take responsbility".
6 months later, there's a lot of complications that I'd foreseen (and documented) earlier which were summarily ignored at the time. The "I'll take responsibility" person isn't on the project any more - they left. I'm fielding a bunch of "why was this done? this wasn't agreed on - what were you thinking?"
Well... when I don't do what they ask for, I'm stubborn/obstinate/roadblocking/etc. When I do it... it's wrong. Even if that original person was still around, I would be the one fixing all the bad data, having to reverse out the changes, revert to earlier state while keeping newer code in place. The "I'll take responsibility" is essentially meaningless in many situations. And I called that out too at the time and was told I'm too negative/cynical. It's just experience.
Lest this be seem like doom and gloom, I've experienced the opposite situation from above, where 'ownership' and 'responsibility' and whatnot were more enforced and honored across an organization, but it's been very rare in my experience over the last 20 years, and seems to be getting even less common. Having seen both situations, it's easier to tell the difference.
More and more folks having shorter tenures makes it harder for any org/team ethos to 'stick' for any meaningful impact, and absent that, it takes a lot more organizational effort to keep a commitment to stated corporate values. Not impossible, just hard to do, and often slips...
>taking responsibility does not necessarily imply consequences
I guess that's the problem? These days leaders have no problem "taking responsibility" to make themselves look good when there's no consequence("hey I did what all good leaders do").
This is being obtuse and trying to deflect the concern.
The concern is that if a company's leadership is allowed to make mistakes without suffering any personal consequences then they will continue making bad decisions.
The op question is not emotional in the slightest. The executive leadership made a series of mistake. People are left in the lurch and the business has suffered because of these mistakes. Asking if the incentives are aligned here is a strict matter of rational business calculus.
> What are the two of you doing to show accountability? Are you slashing your own future stock grants, cutting your own salaries, diluting your positions with stock grants to everyone else? ...
They don't owe you anything. Not an action. Not even an explanation. The world doesn't owe you anything either.
You think there should be negative consequences to the founders for expertly managing the business...?
To many it looked like covid, wfh, etc resulted in a new world with a permanent step level increase in the internet economy that caused Stripe's business to dramatically increase and thus the founders grew the company to support the activity and continue being the best and most innovative internet payment service.
It turns out unfortunately the growth was temporary, inflation skyrocketed, and the world is probably heading into a recession that will further decrease or slow the growth of the internet economy and thus Stripe's business, so the founders are acting quickly and responsibly to cut costs in order to maintain a position of financial strength and continue growing the business and being the best and most innovative internet payment service.
In time, if Stripe continues to succeed and have exceptional business performance, the consequences to the founders should be financial reward for taking quick and effective beneficial action that grew the business.
I thought "fully responsible" means that the decisions were theirs and came from them. It was not from some other executives, nor from their investors or their board of directors. If there's any consequence from the layoff, the consequence will be on them. Given that layoff is not necessarily evil as many perceive, their claim of taking full responsibility seems fair.
You could have made billions on the stock market by accurately predicting this.
It's good to see leaderships take responsibility and change course in the best possible way. But the whole this is our fault, we should have seen this coming story is a bit nonsense. They are just being nice about the messy situation and taking responsibility even though its outside their control.
Personally, what I want out of "accountability"—in general, not just here—is not consequences for their own sake (or for punishment) but rather taking actions to address the problem and bearing the natural costs of those actions. This should include immediate as well as long-term actions:
1. Some way to help with the immediate layoff. Reasonable severance/etc is about what I'd expect.
2. Concrete action to prevent the problem in the future. The post identifies specific errors in judgement and at least pays lip service to avoiding layoffs in the future.
I'm not sure how serious they are about 2—given the structure and incentives of large corporations, how serious they even could be about it—but at least they're talking about it. I would not be surprised to see growth pressure overwhelming any strategic or cultural changes they make today if business conditions pick up again, with the whole cycle repeating over the next 5–10 years.
I'm British, so I appreciate that there's a difference in approach across the pond, but I still think this is a shitty thing to do. They are still growing (and setting records it would seem).
Just hold on to the staff and swallow the small dent in opex.
Not how it works from a financial analysis point of view. When interest rates rise money further down the line is rapidly devalued and cash flows in the near future are reprioritized. And firing people today and taking small layoff costs is much more accretive to the bottom line than growth down the line.
Also: Seems like the whole of VC is now on the FCF/Opex control train.
People own companies. Just like people own tvs, computers, phones. Do you ever go to someone and say "hey, are you using your phone in the way that's best for humanity?"
Yikes, that's a huge cut. Hopefully this is part of defaulting alive and they won't have to make another cut like that. Layoffs are painful for everyone involved.
I've been laid off twice, and it's always painful, hurtful and damaging to my mental health. Take care of yourself the best you can, there is a fair amount of research now that says layoffs can have lingering mental health affects for years to come. [1]
Some resources that might be helpful: flexjobs.com is a good curated job board for remote work. teamblind.com is a professional social networking site for engineers, it's generally super toxic, but the community comes together for layoffs and a lot of people will offer referrals.
> We were much too optimistic about the internet economy’s near-term growth in 2022 and 2023 and underestimated both the likelihood and impact of a broader slowdown.
This is one of the most interesting statements ever written. If you ran a 'Idea Fourier' on this signal, so many things fall out: cheap interest rates pushes crazy valuations and estimations, believing the low interest fantasy was a requirement to getting their funding in the first place, now how easy is it to just say 'oops, no take back-sies'
And a refreshingly honest statement. Too often these layoffs are put on external factors. Having someone admit the actual mistake is due to human optimism (greed maybe) just +1’d my respect for Stripe.
It's a somewhat humorous misappropriation of a mathematical term being applied conceptually.
Roughly speaking, a Fourier transform takes as input a signal (like audio) and produces a spectrogram (the signal's component frequencies).
So "Idea Fourier" is a roundabout way of saying "take the component ideas from a statement". But really, GP just suggested making inferences or deductions, which has nothing to do with Fourier transforms.
I run revenue planning for a large-ish public SaaS company. We knew all of these factors were a risk this year but they were immediately shot down when brought up or part of models. "Focus on what we can control" "Usage and growth is so high there are no signs of slowdown". Whenever we used data to show that macro factors might be artificially driving up usage and demand it was dismissed. Politics plays a large role here as senior leaders want to take credit for all the growth. What's funny is now when it's all trending down of course macro is the factor and rarely anyone's fault.
1) Any Stripers looking for work we have plenty (https://publicdomaincompany.com/) and it's as meaningful as it gets. breck7@gmail.com or 1-415-937-1984
2) Saving this in case I ever need to tell a portfolio company how to do a layoff.
They're paying severance, bonus, healthcare, etc which is the only way to do an ethical layoff. CEOs that wait until the last minute to do layoffs and then pay little to no severance are shitty people, and no one should trust to work for them ever again. CEOs that provide a softer landing for laid off employees should be rewarded by not having their reputations destroyed in the mind of current and prospective employees. It's a display of ethics and competence.
Reading this letter, seems like they're also going to try to cut cloud costs. A consultant who wanted to travel around companies and help them lower cloud costs could make a KILLING right now.
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[ 2.2 ms ] story [ 361 ms ] threadLooks like we're going to see this eat through most software companies. Headcount planning is hard.
Though the bottom 14% is a pretty big amount to cut, almost certainly some decent performers in that group.
Would be useful to see some charts of all those "hiring sprees" that happened during the last 2 years at the big US tech companies, and how the curves on those charts would compare to "normalized" charts had the pandemic/hiring sprees not existed (i.e. if the headcount in 2020-2021 would have increased following the same hiring trends of 2019, 2018 etc).
VCs were way too exuberant and founders were more than happy to mop up the capital.
I see stocks as fundamentally two things. A statistical thing (something that tracks the underlying fundamentals of a business, and a probability (a belief in that company). Yes, this alludes to classical frequentist statistics vs Bayesian statistics interpretations.
I don't think you can only cut "poor performers" in any sort of bulk layoffs. You can avoid it in aggregate, but there will be enough mistakes, enough teams that need to cut a number but don't have enough poor performers, or even enough high performers who are just on teams that are deemed no longer necessary.
There's always management infighting, especially in lean times.
If it's just some folks getting miffed because someone from another department stepped on their toes or made some unkind comments about their team, then that shouldn't be too serious.
I'm assuming it's mostly the latter at Stripe...
The time to do that would have been in a reorg (Stripe's philosophy for that is at https://stripe.com/guides/atlas/organizations-and-hypergrowt... ) prior to layoffs.
During a layoff, if you want to transfer to a different team, apply for a job on that team if they've still got some open headcount.
The company in question was able to stomach this because it would go on to undergo significant structural changes anway but it basically had to start building a new company culture from scratch and doing it top-down is much harder than building on something you've developed organically via your early hires.
EDIT: Since I'm rate-limited right now, I'll elaborate here: it was a company with a number of employees in the low 2 digits at the time and the employee in question had been involved (indirectly via another venture in the same office space and later directly) since before the company even got off the ground. They were in a non-technical role at a tech company but on good terms with most employees and genuinely cheerful about company branding and everyone being "the company" rather than just working on cool tech that happened to be sold by that company. Basically they acted as social glue, both between other employees but also between those employees and the company. Some other (higher performing) employees left after them but I doubt most could point at what it was that pushed them to quit even though this employee's departure was likely a major contributing factor. I could go into more detail but I want to preserve the anonymity of everyone involved, especially those no longer working at the company.
I get what you're saying and have worked with people like that. But I see that as a different management problem that also needs to be solved.
In the latter case it's simply impossible for a single person, not in middle-management or exec level, to be in a critical 'social glue' position.
Dunbar's number, etc.,
So what you usually end up at 3 or 4 digit companies is astroturf and mandatory fun days. The adhesion to the company will be fueled by sales and marketing, the cohesion within teams will be imposed by team building techniques. It's all very artificial and superficial because you can't grow social bonds top-down.
It can be profitable and when you've grown this large employee churn will likely be less of a problem (see Meta) but it's a much less pleasant environment to exist in as a human being.
I imagine they could've went for 10-20x their current value like most IPOs during that time...
IIUC - Stripe actually has good financials.
As a comparison - Twitter had ~7500 employees. Stripe had ~8000.
So I wouldn't be surprised if they have room to cut ~14%. Though, I'm interested why now.
Are they planning to IPO soon or something? It just doesn't seem like a good time for that...
So, not really a surprise that this happened to Stripe.
[0] https://news.ycombinator.com/item?id=20993919
[1] https://news.ycombinator.com/item?id=32566652
[2] https://news.ycombinator.com/item?id=31062227
somewhat? It has 8 THOUSAND employees to run a payment processor.
How does a company breaking records 36 hours ago conclude they need to lay off 14% of the workforce? Even with economic storm clouds on the horizon that seems very jumpy.
As much as people complain about businesses only looking at the next quarter, they do typically have a longer horizon than that. When you have the US fed raising interest rates every meeting and outright saying "unemployment is going to increase" then you should expect pretty much every business to take note of this and adjust appropriately.
I worked at companies that were in no way impacted by the 2008 financial crisis (in fact, business was booming). Leadership managed to use it as an excuse to do a hiring freeze and plead with existing employees that they are the lucky ones and they need to work harder during “this difficult time”. Facebook and Google just turned to that page recently in the “ruthless business playbook: version 1 (it never needed to be updated since the dawn of time)”.
It’s kind of psych 101 stuff. Never underestimate the true nature of business: Amorality.
There is some genuine bullshit going on now days because we have record low unemployment and open job positions. If they say it’s all in the service and labor sectors, well, that just means you gave more people an opportunity to earn money. Those people will then go online and spend it, so how the fuck would Stripe get less business? Unless Stripe is genuinely retarded, in which case I wouldn’t blame the 14% layed off, I’d look to replace leadership. But you see, Stripe isn’t retarded.
Be ready for your company that’s in some booming industry to use the recession and inflation as an excuse.
Hence, it's disingenuous for businesses to put up prices by CPI. In fact, businesses putting up prices is often a driver of CPI.
Businesses face their own changes in prices, yes, but not by CPI.
Or they just took the opportunity when customers are expecting price hikes anyway.
I inferred that you meant record ^low^ unemployment?
Look at all the openings they have: https://stripe.com/jobs/search
https://www.verywellfamily.com/what-is-the-r-word-3105651
Your post brings up interesting view points, thanks for sharing.
Anemic, impotent, bald, and on and on.
Language is abstract. Some conditions are generally disfavored. Referencing that disfavor abstractly can be meaningful.
Come now. At the root of all of this is an ableist, patronizing assumption: People with mental disabilities must have the language used around them carefully policed because they can't handle the implied disfavor and emotional harm that language may communicate via their own agency, not like the rest of us.
Even if it were though, it seems obvious being on the receiving of that slur would have significantly less impact on you, as it didn't actually target anything you saw as part of your identity. I don't see how your experience puts you in a position to absolve others for their use of the term.
Personally, I think we should give significantly more weight to folks who are actually in the impacted community (those with intellectual disabilities, their loved ones, etc). The vast majority of whom _do_ object to the use of the word as a derogatory slur.
The parent comment already covered this. You don't believe you are, based on how you've talked about this experience. At no point do you say you identify with the word, just that it was used against you.
> If we trust the experts on this I'm severely handicapped.
I mean they themselves basically said they do not identify with it:
> If people ran around calling you the N word on a daily basis would it be a comfort to you that you aren't actually black?
There is no reason for school or experts to retract that claim, because they never made it. The claim was done by other kids.
Your anger at Stripe is reasonable, why are you belittling an entirely unrelated set of people in your attempt to express that anger?
It's clearly controversial, and the commenter very well knew it would be before they commented, and after they got the replies they did.
It takes less time than it took for them to reply justifying their choice. As I said, be better.
[0] https://archive.ph/UONL2
I like to think we’re not kids here, and some level of off color talk can be somewhat interpreted as humor at best, sardonic, sarcastic, dark humor, and at worst, appropriately inappropriate - as in, we aren’t kids, and I hope you got me.
So for example, let’s not worry that I used the word, because those who are truly retarded are actually retarded enough to not be offended. Imagine if you took what I just literally. Or did I say it to make a point?
What is adult levity, I guess, is my question? What is non pc, non safe for work (within reason) conversation, among adults? Is it a constant “watch what you just said, but I won’t even consider the context of it”.
"There is one person in charge of every office in America, and that person is Charles Darwin..."
"You don’t call retarded people retards. It’s bad taste. You call your friends retards when they are acting retarded."
Is it worse to have some condition of your birth used as a casual insult -- a reminder of your misfortune? Or is it worse to be constantly patronized, often behind your back by throngs offended on your behalf?
The answer depends on your culture and outlook on life I suppose.
These don't happen because they're fun fashion choices. They happen because people are becoming aware. The dynamics may resemble whimsy, but it's more than aesthetics underlying.
All describe generally disfavored conditions folks don't have much control over. Referencing that disfavor abstractly doesn't bring it into being. Ignoring it doesn't make it go away.
This isn't about awareness in my opinion. We're pretending status doesn't exist. We're assuming folks with some condition will be offended and won't be able to handle those emotions with their own agency, so we're patronizing them by carefully policing language. That is, in my opinion, as ableist as it gets.
Bringing Charles Darwin into the conversation does not help your point.
"Is it worse to have some condition of your birth used as a casual insult -- a reminder of your misfortune? Or is it worse to be constantly patronized, often behind your back by throngs offended on your behalf?"
This is a false trade-off. The whole conversation started because someone used a harmful word, knowing full well it was harmful. If they refrained from using the offensive word they knew was offensive neither condition would have happened (casual insult or patronization).
Come now. At the root of all of this is an ableist, patronizing assumption: People with mental disabilities must have the language used around them carefully policed because they can't handle the implied disfavor and emotional harm that language may communicate via their own agency, not like the rest of us.
It's hypocritical virtue signaling.
There are lots of injustices happening in this world that deserve your attention. Policing the use of a word is not one of them.
And I am not sure which is worse, being selective or being consistent but annoying.
Bringing Charles Darwin into the conversation does not help your point.
"Is it worse to have some condition of your birth used as a casual insult -- a reminder of your misfortune? Or is it worse to be constantly patronized, often behind your back by throngs offended on your behalf?"
This is a false trade-off. The whole conversation started because someone used a harmful word, knowing full well it was harmful. If they refrained from using the offensive word they knew was offensive neither condition would have happened (casual insult or patronization).
Lots of conditions of being are generally disfavored as a condition of our biology. Referencing that disfavor abstractly doesn't bring it in to being. Ignoring it doesn't make it go away.
Sure, we shouldn't use harmful language and emotional intelligence matters. If you're overweight and talking with someone and they constantly find ways to derogatorily refer to your weight or even being overweight abstractly, they may be a jerk. But if someone online abstractly calls something fat, it's not directed at you. That's part of emotional intelligence in my opinion.
Conversely, people tried to introduce the term "special needs" to avoid the connotations of "retarded", and then "special" became an insult.
The word "lame" is also incredibly widely used and no longer considered offensive even though it's still a valid term for those who have difficulty walking.
I don't have a point, just find the whole thing very interesting. "retarded" is definitely in the grey area where I personally try to avoid using it, but it's still commonly used. Perhaps "crazy" and "insane" are next.
I could understand your objections if jesuscript called something/someone retarded, but they explicitly wrote "But you see, Stripe isn’t retarded." I think that whether a word is offensive or not depends on the context in which it is used.
About the article you linked... perhaps I'm mentally disabled, but despite its "Why Use of the R-Word Needs to Stop" title, I was not able to understand why the use of the r-word needs to stop. Would you mind to elaborate?
https://www.pacer.org/bullying/info/students-with-disabiliti...
So, there are certain... specific... groups of people with specific characteristics who are sometimes not well thought of by some other people. And there's a word to refer to this specific group of people, and it's considered a Bad Word. And then we as a society come up with a new word for these people, which is now a Good Word. But in a couple of years, it starts being used as a slur (by the other people who dislike the specific people) and quickly becomes a Bad Word. This process keeps repeating ad infinitum and you're not going to solve it by successively banning each subsequent word and coming up with a new one which is now politically correct.
I don't think the words themselves are the problem here? The problem is that some people don't think well of some specific groups of people and whatever term is being used to refer to the specific group of people quickly becomes a Bad Word. And I don't think we'll solve this problem by banning the Bad Word and replacing it with the Good Word.
In western culture it is usually considered offensive to use a characteristic that is a consequence of birth as an insult. For example: "Don't be such a black person/jew/asian" is considered offensive because you cannot control the trait of your race any more than you can control an intellectual disability.
Compounding that, as I mentioned above, the term 'retarded' or 'mentally retarded' is no longer used medically or legally, in the same way that 'moron' and 'idiot' aren't considered diagnoses anymore.
Therefore, using the term 'retarded' is culturally associated - exclusively - with insulting a person's actions by comparing them to someone who is disabled with the implication that a disabled person would necessarily act foolishly or irrationally.
It would be the same as if you needed an explanation simplified for you, and from then on every person who then needed a simpler explanation was then said to have 'needed a Tasuki'. You can surely understand, even if you personally don't mind, how that might cause offense.
After all, you are 'somewhat offended' by someone assuming that a link might provide a sufficient explanation instead of holding your hand through the explanation like someone who lacks reason, empathy, logic and intelligence ... Or do I need to Tasuki that further for you?
The problem is the insult, not the characteristic that is a consequence of birth. "You're retarded" is offensive, while "you're Asian" isn't. What about "You don't have legs" said to a person born with no legs? It might or might not be offensive, depending on the context.
> Therefore, using the term 'retarded' is culturally associated - exclusively - with insulting a person's actions by comparing them to someone who is disabled with the implication that a disabled person would necessarily act foolishly or irrationally.
I get how calling someone retarded might be considered offensive, but jesuscript specifically said that Stripe was not retarded. How is that offensive? Would you be offended if I said you were not retarded?
> Or do I need to Tasuki that further for you?
Oh please do tasuki that further for me, I'm a simple man and not offended by you suggesting so.
Why is it the author could understand certain actions only if someone has a medical condition?
Surely there could be multiple other reasons.
The context in which the word is used isn’t appropriate. Many find using the word when referring to a medical condition to be derogatory.
Saying someone/something isn’t a derogatory word isn’t kind. The words association and connotation is still there.
> The problem is that some people don't think well of some specific groups of people and whatever term is being used to refer to the specific group of people quickly becomes a Bad Word.
If a group of individuals actively find a word offensive and ask others not to use it, I think it’s generally kind to respect their request.
Word associations may change over time, and it’s great you have that insight. I don’t have a solution, other than recognizing the words we say invoke feelings in others. We live in the now.
Finding someone whom feels targeted by the word and is open to a conversation can help you understand why the word is harmful.
Or is it worse to be constantly patronized, behind your back, by throngs hell-bent on pretending away that generally accepted disfavor (and even Darwin himself)?
You Inc.
What avenues have they exhausted before laying off workers?
For example my company during COVID chose to make a temporary 3% reduction to salaries rather than laying off the people. That was that year's minimum salary increase. Basically they took what they gave that year.
Many companies are very disloyal to their workers, vice versa.
What avenues have they exhausted before laying off workers?
For example my company during COVID chose to make a temporary 3% reduction to salaries rather than laying off the people. That was that year's minimum salary increase. Basically they took what they gave that year.
Many companies are very disloyal to their workers, vice versa.
> - We were much too optimistic about the internet economy’s near-term growth in 2022 and 2023 and underestimated both the likelihood and impact of a broader slowdown.
> - We grew operating costs too quickly. Buoyed by the success we’re seeing in some of our new product areas, we allowed coordination costs to grow and operational inefficiencies to seep in.
https://stripe.com/br/newsroom/news/ceo-patrick-collisons-em...
The reality is there's very little evidence for an actual "broader slowdown". GDP growth in the US was decent in the last quarter despite a huge decline in home sales and headwinds from inflation, and unemployment remains at record lows. There's certainly some signs for concern, but the only real, persistent decline has been in the stock market (which, honestly, is why this whole period is kinda weird).
The truth, when I look at these stories, is many of these tech companies expected the major changes during COVID, which lead to huge boosts in revenue for a lot of tech companies, to persist post-COVID, and that simply didn't pan out. The result is a lot of businesses with bloated workforces predicated on long-term financial projections that haven't panned out.
But, Stripe can't admit they made a major strategic blunder--the exact same blunder made by companies like Peloton--so they have to blame it on "a broader slowdown" since then they have an exogenous factor they can point to rather than admitting they were just caught up in the techno-optimism of a transformed post-COVID society.
Tech didn’t get hit by interest rates, it’s just a reallocation of that influx of money back to other sectors. People didn’t stop using tech. Now they reallocated out of tech (the way it was supposed to be around 2019), and all these shithead companies are saying “we’re fucked, our stock tanked”. No, your stock went back to healthy levels, your stock was just a bank for two years, that’s all.
They quite literally say that?
“In our view, we made two very consequential mistakes, and we want to highlight them here since they’re important:
We were much too optimistic about the internet economy’s near-term growth in 2022 and 2023 and underestimated both the likelihood and impact of a broader slowdown.
We grew operating costs too quickly. Buoyed by the success we’re seeing in some of our new product areas, we allowed coordination costs to grow and operational inefficiencies to seep in.”
For example, Lyft is laying off people today.
Are we in a different universe or what?
> nominal consumer expenditures, has remained strong.
Compared to when? Not last year for sure.
https://fred.stlouisfed.org/series/PCE
You threw out random metrics and claimed it is still growing therefore Stripe's revenue should not slow down.
I claimed that two of the largest Stripe customers have their revenue slowing down, and this slows down stripe revenue. These 2 are just examples. Uber, Doordash, and many more companies who are Stripe customers also have their revenue slowing down.
Do you think you metrics is more relevant than stripe customers' revenue?
Stripe earns when their customers earn. My metrics is the most direct one.
Also, online purchase is only 15-20% of all purchases by volume. And we haven't accounted for Paypal, Square, and etc. Your metrics is crap...
I’m saying, Stripes deceleration is not due to macro (ie overall macroeconomic conditions), but a result of post-Covid normalization in the business results of its customers. This is obvious, as overall nominal PCE have not slowed.
It is slowing down.
I looked at the data. US GDP growth was positive in the third quarter. Unemployment is at record lows.
Again, there are headwinds. Inflation is high and as a result consumer confidence is low. That's bad. But the only people crying "recession" are people paying too much attention to the stock market. The real story is far more complex, and there's very little sign of a broad based economic slowdown.
Would you care to provide the data you're using to back up your claims?
For example, Lyft and Shopify who are one of the largest customers of Stripe is slowing down in their revenue growth. You can just look at their financials in the past few quarters. They even have layoffs themselves.
That majorly has negative impact on stripe's revenue.
Again: I have data about the entire economy. That data tells a story that's mixed but relatively positive.
You have two specific examples, each of which represent a corner of entire economic sectors, and those sectors represent only a fraction of the total economy.
And I'm supposed to conclude that you're the one who has it right?
Why would your explanation matter?
The conclusion still remains. Their revenue slows down. Therefore, stripe's revenue slows down.
For sure, it is not growing faster.
You didn't contradict my point at all.
> Again: I have data about the entire economy. That data tells a story that's mixed but relatively positive
Stripe's revenue growth does indeed slows down. There is no dispute of that.
If Stripe was making 1 trillions USD more, they wouldn't have laid off people, obviously.
Now I or the founders claim it is because the macro economic is bad. You might contradict this part.
Well you have been taunting it for 2 comments now. Can you share your evidence? Or we should continue quibble a bit more first?
What do you there is no slowdown? It slows down everywhere. A lot of companies' revenue is slowing down.
I thinks as a payment processor, they are in a better position than most to predict sales trends. This effect might be restricted to their segment of the market. But if the payments they process are down significantly, then does it matter (to Stripe) if parts of the economy that they aren’t involved in are more robust?
I’m not excusing actions, but they have more data on the economy than most, just from their position in it. They may have thought (their part of) the market was going to keep growing (the mistake), but that doesn’t change the fact that it isn’t.
I just feel bad for everyone affected.
Stripe needs to 6-7x its processing to be one of the largest.
Closest comparable is Adyen, processes 516B with 2500 employees.
Stripe processes 640B with 7000 employees.
I'm not sure about 'broader slowdown' but in the industry I'm in we've seen a massive slowdown in signups and expansions in the existing customers. When we speak with our customers, especially banks, they are seeing massive slowdowns on their side.
Someone has bad metrics here, and when most of our customers across a wide range of industries are laying off, then I'd say that's pretty broad.
The last recession had a pretty clear cause you could point your finger at: The collapse of subprime mortgages. This one (presumably we're about to experience one) and the first dot-com crash didn't seem to be caused by anything besides a critical mass of businessmen agreeing "Well look at that, we're headed into an economic slowdown!"
Anecdotally my indie friends all report modest revenue growth this year while my big tech friends report more work for less money (due to equity grants decline).
From the data I see, the “reality” is not the failed indie dev but the failed inefficient big tech company.
I wish I could be in your bubble. In mine, people have been spending more on less month after month. Businesses are seeing slowdowns. Things are going to be even worse when the winter heating starts.
1) The housing market is the largest asset base in the world's wealthiest country and changes in that market reliably predict macroeconomic downturns (1). 2) E-commerce transactions are supported more than the economy as a whole by discretionary income. Interest rates drastically change consumers' spending habits; when rates rise, discretionary spending drops as consumers save more (2). You can infer that the GDP of e-commerce decreases at a rate higher than the larger economy because of that drop in spending. 3) Stripe has a very high retention rate for its customers. That counterintuitively increases the volatility of its stock because of increasing interest rates (3)
Beyond the appeal to intuition you made around tech companies assuming that post-COVID demand would remain, there are plenty of reasons that a payment processor that primarily services e-commerce would need to downsize. They are simply more sensitive to macroeconomic conditions.
[1] https://seekingalpha.com/article/4535186-how-to-predict-a-re... [2] https://www.investopedia.com/ask/answers/071715/how-do-chang... [3] https://whoisnnamdi.com/high-retention-high-volatility/
That is correct. However, I work as a consultant and deal with a lot of senior execs at large companies (mostly non-tech) and I can tell you that they are all in a panic right now and expect an absolute economic bloodbath next year. It's going to become a self-fulfilling prophecy. It really feels like Wile E Coyote after he's run off a ledge but hasn't realized it or started falling yet. Very weird.
I suppose they could say "we thought the economy might contract in 2022 as it would eventually, but that risk was more palatable than not growing and missing out vs our competitors if the contraction didn't happen."
A lot of this was driven by covid-cautious WFH culture. Someone working from home in the Bay Area in January 2022 might not realize the extent other industries are back in the office and other regions are done with covid.
I am glad they did it transparently, but I wish they had been more open about this fact. Shifts the entire perspective IMO.
If this is the only cut (big if), then I imagine that most areas outside of HR will not feel much different.
I’d love to get laid off with a quarter+ of a year paid for.
Only a few pay the $400k-$500k Google level salaries you hear about for mid level employees.
It might be relatively easy to find a $120k job but that doesn’t mean every laid off person can now walk into Google with ease when even big tech is laying people off or freezing hiring.
Don't compare yourself to the .1% of software devs.
A 2 bedroom apartment in NYC or another high cost area where these jobs are generally located will cost $4000-$6000
In this scenario the person has made the decision that it isn’t really that great of a salary considering cost of living, yet you’re on here getting angry this person is being “entitled”. No decision was made to accept this salary as a good one in this scenario.
I would be jumping with joy to make 200k a year with where I live now. However if I was in offered the same job in the bay area for 200k a year I would not be nearly as happy.
I'm not saying the area is inexpensive. Don't argue with a strawman.
Don't misconstrue what I am pointing out what you're doing. They are not lying about how expensive rent can be there, this is simple to verify.
People want to live where they want to live. Get over it.
Even if you’re somewhat disciplined about spending you are probably spending $40k a year easily in a higher cost metro on normal everyday expenses/personal travel, leaving you with maybe $20k-$30k to tuck away. Difficult to save up for a family or house on $20k/yr to save/invest.
Even in Manhattan, there are plenty of 2br available for <$3k. Zillow is bringing up hundreds of results. You're not living large, but you'll have money for savings.
Most people who live in Manhattan don't live there alone, anyway. That luxury apt for $6k is a great place to live with 1-2 roommates.
and you’ve mistaken what I said if you think I’m suggesting it’s “hard” to live on $200k in NYC. the point is more that it’s just a normal salary in a high cost area at this point, and after taxes and retirement savings and regular monthly expenses you’d be lucky to save $30k a year. hard to save for a house or start a family and care for dependents without being close to paycheck to paycheck at that income.
We're also using an extreme, living in Manhattan is a luxury. It is one of the most expensive places to live on the planet. Even using this extreme your argument doesn't hold water. You would do well on $200k paying $3.5k/m in rent. That's high, but shouldn't kill you.
I would argue that using the median or average in an area that has so much luxury housing is also dishonest. I know people paying over $5k for STUDIO APARTMENTS in NYC.
They love the building, I dunno!
JC median 1br is $3k, north bergen nj 2br is $2,400.... but there are plenty of 1 and 2br in JC and NB that are under $2k on the market right now. Thousands of units, actually.
Including kids, or if you have a stay at home spouse or something, you're right. You can't really live in the area on $200k. That is a problem. Your wife needs to work and bring in at least $80k, especially if you have more than 2 kids. But we're kind of moving the goalposts here, aren't we?
No reason why Stripe couldn’t have gone public in 2020-2021 at a huge valuation but from past interviews it sounds like the decision to remain private was just a founder preference thing because “focus” or something. Now the IPO market is completely frozen and its valuation is likely cut in half from peak, at least.
They do have a slick integration process for outside developers, but is that enough for to justify the financial values attached to them in the recent past?
Developer docs and easy API integration was, and is still, their "stickyness". But the eco-system of new products they've added have grown that moat to make it easy and cost-efficient to offload more and more of the financial and subscription stack onto Stripe. It's a virtuous cycle
Delaying going IPO this way, amongst other things, is about retention.
Lock up periods aren’t set in stone. They probably didn’t need to raise money and could have done a direct listing and let employees cash out immediately.
Stripe is a rarity in that it issues one-year equity grants, which would make it more susceptible to brain drain after an IPO compared to companies with longer vesting schedules.
While it might have been nicer to IPO by now, early employees are doing extremely well.
Folks who are getting screwed are the ones that joined in ~2017 when they started issuing RSUs instead of ISOs.
So you wish they would have got to dump overpriced shares on the public to further enrich insiders?
It's not like Stripe engineers were earning minimum wage digging ditches for 10 years...
I guess about 8,150 employees and 1,150 are being laid-off.
> John and I are fully responsible for the decisions leading up to it.
What are the two of you doing to show accountability? Are you slashing your own future stock grants, cutting your own salaries, diluting your positions with stock grants to everyone else? What's the consequence for this decision on your end that shows you're accountable for what happened, not just responsible for it? Since you have no intention of cashing out, the valuation cut is ineffectual as a consequence to you, and the support/severance package will probably have minimal impact on your own bottom line since it's all largely been accounted for (payouts of planned bonuses, existing unvested stock etc)
Yeah we know you're responsible for it, but how are you being held accountable for it?
No one will remember in two years time, but my hope is it'll factor into candidates' decisions around whether to pursue a career with Stripe. If I've got senior executives without accountability, it's a distraction to my ability to deliver the product as well as to lead my own teams supporting their vision because it means I can't rely on them, and this outcome with absolutely no accountability behind it is a good enough reason for me to never want to join Stripe in the future.
Good examples of accountability to the board? All over. But boards care (by mandate) only about profit unless specified otherwise. There's no incentive for a board to care about whether people are put out on the street either; it's one of the major reasons for why unions exist and are successful: they provide a mechanism for accountability that ties adverse employee decisions back to future revenue loss.
Tl;Dr: nope, and that's sadly by design because why would anyone be self-accountable when the consequences hit the wallet? I was hoping for a ray of light to pierce the dark.
Why would the union do this? It seems like a contrived example to prove a point. Unions would conceivably benefit from more hires because they would have more union membership.
My anecdotal experience is that unions are a massive benefit to laid-off employees. Laid off employees were given 80% pay while they waited with a known re-hire date. In other cases, they are given priority when the company is looking to rehire with an unknown rehire date. Unions have downsides, for sure, but I don't think your example points them out here.
And my example was simply continuing the original poster’s insinuation that a union could have helped management avoid the over hiring mistake they were about to make by making the consequences of that mistake greater.
What you said does make sense though. The union apprentiships were extremely competitive, possibly because they were constrained to low numbers.
Also, Japanese execs are paid substantially less than their US/UK counterparts.
I doubt that it has happened in quite a while, but there have been CEOs that have committed suicide, when their companies failed.
Doubt that will catch on, in the US.
A lot of the nice stuff that musicians and actors have, is actually owned by the company.
Gilded cage, so to speak.
(Tbf, I'm sure he was told to resign. But that's largely because the Navy has tried to institute a culture of accountability, albeit imperfectly)
After having to layoff a lot of their staff in the 90s, Chouinard decided to switch his compagny values and reason of being.
This article sums it up I guess, https://medium.com/@adamler/limiting-the-engines-of-growth-a...
https://www.fastcompany.com/3056662/she-created-netflixs-cul...
Remember, “companies don’t exist to make you happy. You know that, right? The business doesn’t exist to serve you. The business exists to serve your customers,” reminds McCord.
she was apparently a big deal but i think you gave her more credit than deserved there heheh
Why do people keep working and earning more when they are set for life--what actual practical purpose does megawealth serve once you've guaranteed your standard of living for you and your offspring? The purpose is lack of accountability. Megawealth means you can spend every remaining day of your life screwing up, and besides doing something illegal that lands you in jail, you'll never suffer a consequence.
I think this is the wrong question to ask -- "what end is this a means to anymore". One of the largest challenges in life is pursuit of meaning, and Zuck has, at least he thinks, found it. He still has consequences, but they are higher up on Maslow's hierarchy of needs.
You could argue that those in charge should have enough at stake to feel the burn of a layoff like this, but this issue isn't dissimilar to biology. We often make local (and temporary) sacrifices on behalf our own bodies, knowing "we" will still be around afterwards to enjoy life and the removed parts won't (removing limbs, wiping out blood cells, organ removal, etc.). This isn't 1:1 with Zuck, because Zuck is more than just his role in Meta, but close enough.
Actually, yes, as it could open up career opportunities for others further down the totem pole. At almost every company I've ever worked, the CxO, SVP, VP roles were all hogged up by already-set-for-life people (or people who became set for life by working there a few years). They just hang on to those very senior roles like barnacles, while the rank and file fight each other their whole careers for a few open Director or manager roles.
If already-rich people could just admit they won the game and gracefully resign to "spend more time with their family" or "look down their noses" or whatever rich people like to do, maybe some of those Directors could be promoted to VPs and some of those managers could be promoted to Director and so on. This would help refresh the tree a little, cycle new blood through leadership, and help even more people climb the ladder.
Is that ritual suicide?
If they just give it to you straight, there’s no bullshit - the people fired may be mad or upset but they'll be mad or upset regardless because being fired sucks. If they start hand-wringing, talking about how painful it was for them and how they take full responsibility people will ask “hang on, how exactly is this painful for you? how are you taking responsibility, what are you doing about it?”
Such execs are usually already so wealthy that they never have to work another day in their life, no matter what happens or how much they screw up.
They can always find other prestigious, high paid jobs, and sometimes even get rewarded with huge amounts of money from the very companies they screwed over.
This is the norm I've witnessed. They're rewarded for making bold bets, whether or not they pay off.
Just to be sure, there is a big difference between a bold bet based on your market or product insights vs putting everything on black on the roulette table.
If leaders were rewarded for being conservative instead of making bold bets, Linux and open source would never have taken off, nor would most tech startups.
Their psychic abilities failed? A coin flip came up tails but they bet on heads?
“Do you care to know why I'm in this chair with you all? I mean, why I earn the big bucks?
I'm here for one reason and one reason alone. I'm here to guess what the music might do a week, a month, a year from now. That's it. Nothing more. And standing here tonight, I'm afraid that I don't hear - a - thing. Just... silence.”
-John Tuld, Margin Call
is "we're a fast growing business but this cannot last indefinitely, let's not overexpand" ´really too much to ask for? It's constantly happening to tech companies because of their internal fantasies.
Isn't it interesting how we want to absolve execs of all blame when they bet wrong and get unlucky, but declare them geniuses and masters of business when they bet right and get lucky?
Not surprising to see execs and founders on here patting each other on the back and trying to convince everyone that they deserve their millions because of how innovative they are all the "value" they create. Looks like the old HN to me.
But overall Stripe has A+ execution -- of which very little was luck -- and the founders deserve credit for that.
That is because any exec worth her salt would negotiate a generous golden parachute even before starting the job. And why is she able to do that? Because there are very few competent candidates available in the market. If you think the job is easy, just go and get one of those exec positions and you will learn.
Just because you're hired for one of those positions doesn't mean you're competent.
Do you have an idea to judge exec competence effectively? If so, you can have a very successful company based on that.
https://www.google.com/search?hl=en&q=meditating%20collison%... Gives nothing at a glance. Do you have anything?
I was talking about the alleged 'responsibility' by the billionaire owners. Yet said responsibility doesn't lead to job loss or anything. It's empty words.
It's about the empty platitudes they and all people like them spew. "they take responsibility" what does that even mean? It's meaningless.
Are they taking a paycut themselves? Letting themselves go instead of their employes? Cutting down on bonuses to keep their people employed?
It means they're not blaming anyone else for this. The opposite of taking responsibility is assigning blame. They aren't assigning blame, they're taking responsibility.
I believe the company’s revenue is heavily tied to Shopify whose stock is down -75% ytd…
Severance pay. We will pay 14 weeks of severance for all departing employees, and more for those with longer tenure. That is, those departing will be paid until at least February 21st 2023.
Bonus. We will pay our 2022 annual bonus for all departing employees, regardless of their departure date. (It will be prorated for people hired in 2022.)
PTO. We’ll pay for all unused PTO time (including in regions where that’s not legally required).
Healthcare. We’ll pay the cash equivalent of 6 months of existing healthcare premiums or healthcare continuation.
RSU vesting. We’ll accelerate everyone who has already reached their one-year vesting cliff to the February 2023 vesting date (or longer, depending on departure date). For those who haven’t reached their vesting cliffs, we'll waive the cliff.
Career support. We’ll cover career support, and do our best to connect departing employees with other companies. We’re also creating a new tier of extra large Stripe discounts for anyone who decides to start a new business now or in the future.
Immigration support. We know that this situation is particularly tough if you’re a visa holder. We have extensive dedicated support lined up for those of you here on visas (you’ll receive an email setting up a consultation within a few hours), and we’ll be supporting transitions to non-employment visas wherever we can.
Would've been a different story for instance if pc/jc were diluted with new grants to departing and existing employees.
But in the face of fundraising headwinds, a decision to cut costs like this only improves (or stabilizes anyway) their ability to raise at a valuation closer to what they're looking for in this down market. The severance package here only deferred the benefit to the bottom line, but it wasn't a consequence for over-hiring and potentially disrupting lives.
In other words, the layoffs actually benefit the founders directly, and it ends up becoming a perverse incentive to over-hire and lay off again with the next boom/bust. Successful accountability means people actually avoid doing shitty things.
This is exactly how business works. You should not be surprised. Their job is to ensure the company survives and that is really it. Everyone is expendable. None of these employees were guaranteed a long leisurely employment at Stripe.
Businesses change overnight. But it's always a cyclical market. As the founders I would expect them to benefit themselves. There doesn't have to be consequences, only change and adaptation. It's just business, they aren't your family.
This is all complete nonsense. They're handing out millions of dollars they have no obligation to pay. Unlike cheap talk on the internet, this actually costs them quite a lot. This is extremely generous.
I would still take the deal. I would work there if they hired me. If there are enough people like me to continue the business, then this thing turns out to not be shitty. Only time will tell.
"Leaders eat last"
"We cut the fat starting at the top"
"Leaders need to have endurance beyond their troops"
I have no skin in the game either. The severance packages are commendable, but I don't think it actually answers the OP's question about accountability. I don't want to speak for the other commenter, but I think what they're looking for is some indication that the leadership has personally sacrificed something equal to or exceeding what they expected out of their subordinates. Giving out millions in severance, while commendable, isn't a personal sacrifice.
I keep a go to hell fund, an updated resume, an updated career document, a strong network of former coworkers, managers, and external recruiters and make sure my skillset is in line with the market.
I don't think "for profit" and "good leadership" are mutually exclusive.
You don't expect them to pay you? Treat you with respect? To observe labor laws? Surely, you expect something from them. Being willing and able to walk away is not the same thing as saying you have zero expectations.
2. I addressed the other one. When the pay/bullshit ratio goes the wrong way, I leave.
Do y'all expect them to cut their arm off? I'm not defending pc but the OP's comment wreaks of corporate SJW.
> but I think what they're looking for is some indication that the leadership has personally sacrificed something equal to or exceeding what they expected out of their subordinates
Millions (and billions) come out of their valuation as a result. It's not like they're getting whisked away on a golden parachute.
It's the exact opposite. They're more likely to stem the bloodletting of their valuation with layoffs extending runway or boosting profitabiliy than see it get worse.
That depends. Are they expecting their subordinates to cut their arms off?
I do think a lot of discussion seems to point to how we, as a society, have adjusted our social norms about what's expected out of leadership.
Do you expect company management and subordinates to have symmetrical work obligations?
It feels like the social norms have shifted to accept one but not the other. In other words, we're only supportive of an asymmetrical risk:reward ratio that favors management.
Actually we have, the risk:reward ratio is generally consistent across founder/management vs IC.
Are you simply saying that because CEO to IC pay ratio has expanded drastically in recent years that it's not accurately accounting for the risk? You realize that ~x% cut in workforce includes managers right? In fact, often times cheaper more productive ICs stay and expensive middle management is first to go. Seems like that is accounting for it no?
It’s something a lot of us are sensitized to these days because of all the narcissists who “take full responsibility” which seems to mean to them that taking the blame is a dire punishment and no other consequences are necessary.
Being the scapegoat is not a real consequence. Not getting that villa you were talking to an agent about is a consequence. Not getting your bonus at all is a consequence.
The general argument for high CEO pay is that it is a reward for their skill in the job. By that argument, if there is evidence that they're making mistakes that negatively impact the company shouldn't that directly impact them in terms of their compensation?
I just read the rest. On top of 3.5 months pay, they get accelerated vesting, cash payment for healthcare benefits, all unused PTO paid, and more. That’s incredible.
At the moment the precedents are still heavily employee biased, but you ask for whatever you want in your contract during negotiations. Negotiate your sick pay, negotiate your PTO, negotiate your vesting schedules and exit terms, negotiate your hours and time in lieu policies. Negotiate your Intellectual Property terms. That one is super common to see lopsided toward the employer. We don't have unions or award rates, so we also miss out on some of those protections, hence why we need to make sure it's in the contract.
Even the nicest, fairest business owners I've worked for will start with industry standard contracts that do their best to shaft you, because it's industry standard and they don't see it as lopsided. But I've never had trouble negotiating for this stuff to be made clearer and fairer.
Generally, employees in America do not have contracts. While plenty of things are open for negotiation during the offer/hiring process, I doubt you'll get an exception to a corporate policy on paying out on PTO if it's not something they already do.
That said, IME, accrued PTO has always been paid on departure (voluntary or not). For this reason, most of the places I've worked heavily encourage (or even require) taking PTO, because it's a liability on their books.
Is that true? The company surely has terms for you, like expected working hours, terms about your sick leave, performance and health terms, out of office expectations, intellectual property disclosures and NDAs? Non-compete clauses? When does all that become binding if not through a contract?
I've never seen this in the US. The only things typically up for negotiation is the sign on bonus/equity and base pay. If you start trying to negotiate vacations and holidays, you're going to look pretty silly.
> The Fair Labor Standards Act (FLSA) does not require payment for time not worked, such as vacations, sick leave or federal or other holidays. These benefits are matters of agreement between an employer and an employee (or the employee's representative).
https://www.dol.gov/general/topic/workhours/vacation_leave
Everything is up for negotiation. Just depends whether or not you have options. I have seen PTO negotiated in the US.
Everything is negotiable. That said, the bigger the company, the harder it can be.
F500 company and you want a line out of your mid-level developer contract? Their legal likely doesn't have time and they will just hire someone else.
Startup? Literally write your own contract.
In any major city in the US, a software engineer is probably making in the top 10% of area and there is little excuse to not have 3-6 months savings.
Reminder that the US has the highest median disposable income in the world, not just the highest top percentiles.
In California, accrued vacation is part of wages and must be paid out as part of wages. However, unlimited PTO policies typically don't accrue vacation.
In Washington, it's "read your contract." If your contract doesn't say that they pay out accrued PTO upon separation, they don't.
The smart businesses would just actually bank the dollar amounts and not worry about it, but those are rare.
In my experience, if you’re job hunting and don’t have an offer in hand by November 1st, you’re probably not going to get one until mid-January.
The “normal” interview process takes 4-6 weeks in my experience from application to offer/rejection. That is doubled between Thanksgiving and New Year’s Day.
Not poking at you directly. I've got 25 years of experience. I was on a team a few years ago with people with... 2-4 years experience. We were both labelled to the end client (contracting company) as 'senior developers'. It's just weird all around. When everyone is 'senior', it loses any useful meaning.
The levels are fresh out of school, have learned enough to not need hand holding, and able to make good decisions about code. You cover them very fast. There is a staff level about that, but most people don't reach that level. There just isn't need for too many of them.
If you are handed $73,000 and still need to frantically look for a new job, something strange is going on.
also all the income and benefits are taxable
Keep in mind that this is interviewing without a job taking 40 hours (or maybe more) of their time every week.
Interviewing is much, much easier when it replaces your job and you're still collecting paychecks for several months.
You can get health insurance from healthcare.gov
Granted not California, but the federal bit is the same - https://oci.wi.gov/Documents/Consumers/HealthInsuranceLostCo...
> I thought the open enrollment period was already over for HealthCare.gov. Can I still enroll?
> Yes, if you have just lost your health insurance, you are eligible for a 60-day special enrollment period. You can work with an enrollment assister, an insurance agent, or use HealthCare.gov to enroll in a new insurance plan. You may also qualify for a special enrollment period if you have experienced a life event such as moving, getting married, having a baby, or adopting a child.
Your taxes would only be 40% (actually 47%) if you make beyond $500k a year. Cobra rates are quite affordable. I was on Cobra when I was laid off due to covid, and it was $550 a month for top tier healthcare.
$550 for gold level insurance is expected for someone young, which I guess you are.
You can ballpark almost anyone’s premiums based on the figures in link below. I would use Omnia Gold or Omnia Silver HSA numbers, and plus or minus 20% for your state.
https://www.state.nj.us/dobi/division_insurance/ihcseh/ihcra...
Those two statements are in odds with one another. $550 is quite a large sum of money to put out each month, particularly when you don't have an income.
https://www.healthcare.gov/glossary/premium-tax-credit
Generally, decent insurance costs anywhere from $400 to $1,200 per month, depending on age of insured, plus up to $9k out of pocket maximum for individual and $18k for families, per calendar year.
So to adequate insure one’s self for healthcare expenses, you would need $18k or $36k for out of pocket expenses (since things can happen at end of calendar year), plus $400 to $1,200 per person per month minus any premium tax credits. For a young family, I would guesstimate $24k to $30k per year in premiums minus any tax credits.
Basically, be poor enough to qualify for free healthcare, or earn enough to be able to spend a few tens of thousands of dollars for a healthcare emergency, but try not to be inbetween.
(I actually do not have any compulsion to drink coffee, or anything much other than tap water).
On a serious note, I cannot blame many young people for eschewing forming families of having kids when faced with the numbers I quoted.
Obviously family plans etc. will be considerably higher.
You'd get that withheld money back after filing taxes, but most people who are laid off would prefer to have that money now.
If Stripe is making regular salary-like payments instead of one lump sum, then the taxes would be pretty much the same as always.
That 3.5 months and healthcare buys them some time to start interviewing and line up new work. However, they're competing with everyone else that's been laid off recently. There's another article on HN right now about Lyft laying off staff. Meta is getting pummeled in the stock market right now and Google has recently had hiring freezes. I'm not sure now is a good time to be looking for tech work in SF.
Unused PTO should be paid out. That was already earned by the employees.
Accelerated vesting is only good if you can afford to use it. How long do they have to exercise their options? What's the secondary market like right now for Stripe stock? Are they allowed to sell stock currently or required to hold it? In a worst case scenario, people could be unable to exercise their options because they don't have the savings to cover the tax bill and want to hold onto cash because they're unemployed and need the liquidity.
As for healthcare benefits, that's a result of a very broken system in the US and not something that should be celebrated.
Happy that some companies also start to do this in the US, but yeah it sounds that this is not a given. It will generate a better transition and avoid serious mental problems/personal issues.
This is pretty normal in my experience. Having experienced layoffs (never as a target, always from the side) for the last 25 years. There are probably edge cases, but some amount of severance (based on time with the company, typicall), healthcare coverage, bonus acceleration, etc, is all completely normal.
On HN, of course, you're mostly only going to see the edge cases posting, so it's easy to get a distorted view of normal.
Note that Europe is a big place, and laws are not standard for layoffs/redundancy. I got laid off this year, and basically got one week's severance pay, plus my two weeks notice.
In Ireland, I believe the standard amongst larger companies is one month per year served, but the cap is very low so generally tech companies will make much of the payout conditional on an NDA.
So I got doubly paid as soon as I found a new job. Good times. :)
They told me I could win jackpot but they would still legally owe me unemployment pay. It is all about actually woking. If you work and then get paid for that work, that's when you cannot claim unemployment pay.
So, technically, if you do contract work and still claim unemployment, then you are breaking the law.
IME 14 weeks minimum is really generous in the US.
I've been at 2 companies where it was 1 week per year of employment. At one company they added on 1 month of severance during a really large layoff. The tenure at tech companies in the US tends to be quite short, so getting 14 weeks probably unusual at typical tech company.
Depending on the political environment of the state one is in. It could be capped at a useless amount, or the unemployment department minimally staffed. I know someone in NJ that has a pending status for 2 years with no response or ability to contact the state, and they have 8 years of W-2 showing they paid unemployment insurance.
In the event you do get through, you reach a line level agent, and they say a supervisor has to look at the case, and to wait 6 to 8 weeks before calling back. That’s it, nothing else.
I assume many people just give up.
Is silver like "second place" or like "middle-aged" companies?
Faangs are obvious, good tier is up and coming businesses who pay and act like faangs. Examples are brex, stripe, Uber(at least back in the day, no idea what they’ve been up to the past year.
Silver tier are the places that still pay well above average jobs but don’t go into the mega compensation and suffer a talent drought as a result. Places where they’re paying 120k total comp for a senior engineer and won’t part with any equity because the leadership can’t emotionally handle the investment needed to compete for engineering talent for reasons that I could go on for hours about.
Wood tier are the companies that need tech but still try to pay <80k because they’d never pay high wages to any employee or still think they don’t need software and end up with some real shit engineering
I'm genuinely asking this question - I'm not trying to be a smart ass.
I worked at a tech company (~3500 worldwide) that had an office in almost every major US city area (e.g. Bay Area, NYC, Boston, Chicago, Seattle, and a bunch of Tier 2 cities as well (Atlanta, Raleigh, Houston, etc), and remote workers (e.g. sales) as well.
They had a big layoff and in theory they could laid off 500/15% people worldwide without laying off 50 people at each site. Would that still trigger the WARN act?
You should still do it.
Do you think their doing it for shits and giggles? Or do you think that they've actually done the math?
How did Stripe end up with expenses they need to reduce if they did the maths? Yes, their world changed, but at some point they made choices that were incorrect.
Of course, its presented as largesse to the recipients, but its very much not.
60 work days must be paid out, which is 12 weeks of work. So essentially they're giving people only an extra 2 weeks of severance to sign away their right to a wrongful termination lawsuit.
As the owner of a (much, much) smaller company, I'm inspired by how the Collisons run their business, especially under adverse circumstances. Yes, they fucked up in estimating the future market, but they are in good company among CEOs and non-CEOs lately.
Well done stripe. Maybe others can follow your example.
If you "walk out" i.e. quit, then severance doesn't apply. Severance is for people they're laying off. But, yes, if you get let go on Friday, you can work elsewhere on Monday, unless Stripe has specific non-competes in place (which aren't legal a lot of places).
> This setup is incredibly generous in my mind to the point where there's a lot of incentive to get laid off. If you got another job in a couple days
When we're in an economic downturn, and a lot of other companies are conducting layoffs or hiring freezes that is easier said than done. Definitely was a rough experience in 2007/08 during the last big one.
But either way, they should still come even if you get hired immediately (except I guess hired back at Stripe).
That’s very generous severance and the company doing right by its employees.
I don’t know how long the process is for non US citizens. But in my over 25 year career, and changing jobs eight times as a software developer, it has never taken me more than a month from actively looking to having a couple of offers. 14 weeks and bonus and paid out PTO is more than enough.
I also lived through 2001 and 2008. I think the last 12 years of perpetual growth have created some amazing expectations from people. I can only hope that, once I get laid off, I'll have to "settle" for some $175k job in an office after my 3 months of severance runs dry.
I kept my job through that but it was a very head-down situation. Just put up with this shit until the market recovers. Then the company had a good year and so a bunch of us stayed to get the bonus. So February 2010 saw nine of us who had quit in 8 weeks, sitting in a bar celebrating our exodus. I asked if it was worth it (staying for the bonus).
One person said yes. Another said maybe. Seven people regretted staying. The bonus amounted to less than 20% of salary and we were under market at the time.
We used to have coffee and discuss how much we hated our boss Mike (not a pseudonym. Fuck you Mike, you brown nosing ladder climber). My peer called our favorite table the Conspiracy Table.
Few professions earned this quality of life, doctors and lawyers, and I can promise they aren’t sitting around going “maybe we’re spoiled, maybe we oughtta curtail our expectations”.
No, take the life you have and don’t go backward. Most people working aren’t given an ounce from their industries, many of them still fight for basic stuff to this day.
Tech should not be okay with these levels of lay offs and still revere these companies. This is the stuff the car industry did when they just offshored jobs, and collapsed entire cities (Detroit). Why should we be okay with the same playbook?
Absolutely! I declined multiple offers this summer because they would have been pay cuts. We agree.
> Few professions earned this quality of life
Well that is a can of worms. I'm going to guess Doctors deserve much better. I think the unfortunate reality is that, maybe, tech workers haven't earned this quality of life. Instead, we are the lucky recipients of decades of growth. This is something that isn't even shared in Canada or Europe, much less Asia, in terms of salary.
> This is the stuff the car industry did when they just offshored jobs,
Agree, this is going to be bad. Now that we have shown productivity with work from home, how tied are companies to these high USA salaries?
I'm not ok with it. But I also remember that when I'm running around looking for a job, the people with that job are making the demands. This is something that tech workers haven't actually experienced for a decade, but every other industry has.
> okay with these levels of lay offs and still revere these companies
Revere these companies? Founders are taking risks to make a LOT of money. They aren't here to make employees money. I don't revere these companies, and I don't put any stock in their Family Friendly or work life balance encouraged, marketing nonsense.
This is financially nonsensical. Every month you delay working you have to make more to get the same amount over the course of the year.
Just to make up a number, if your target was $120K and they offered you $110K and it took you a month longer to get $120K, you would need to make over $130K just to reach $120K.
I would take close to what I wanted and then change jobs if something better came along.
I think the issue (also related to how we interface with the internet) is that most of these replies completely dodged the question. The OP was asking about personal accountability, not about "how are your going to make this as palatable as possible?"
Consider two scenarios:
(1) A manager fires half their workforce, but gives them a generous severance. In response, the manager gets a massive bonus.
(2) A manager fires half their workforce, but gives them a generous severance. In response, the manager forgoes their salary for a year for being the one making that decision.
The second has personal accountability because they are making a personal sacrifice beyond what they expect from their subordinates, even though the employees are affected equally. I'd be willing to bet one organization has more institutional trust than the other.
In theory he had to cut her too, because he was something like $30K short of the goal and her salary as an office admin would have more than covered that. But then he’d have to do her job. His solution was to cut his own salary enough to hit the target to the decimal point.
They landed a new contract a handful of months later and were eventually able to hire back one of the people they lost.
I think he may have even backdated some raises they missed out on. He was her best boss.
If the through-line wasn't obvious, it's that leadership quality matters. Trust matters. When you decide to stay with a company or invest in a company, you don't have the privleged access to know that their actions "won't have any effect" on your ability to pay your bills in the future. In the context of uncertainty, leadership quality matters.
You bet on the jockey, not the horse.
A job is not a marriage. I’ve been through many “uncertain times” in over 25 years.
I depend on my savings, network, skillset, updated resume and updated career document, not “trusting” a for profit company.
Do you not expect anything out of your teammates? Do you have no expectations from customers? From politicians?
At a certain point, how you manage interpersonal relationships can limit your path. Sure, you can just devolve everything down to a transaction (even a marriage) and maybe that works for you. And you can create a life free from any obligations or commitments, outside what you want for the aesthetic life of your choosing.* But it doesn't seem like it would be the type of existence many people envy.
* David Brooks book "The Second Mountain" does a good job explaining the downsides of this approach.
I expect the same from my coworkers as I expect from myself - that they do their best work for 40 hours a week.
> Do you have no expectations from customers?
I work in the cloud consulting department of BigTech. The expectations of my customers are spelled out in detail by high priced lawyers.
> From politicians
Hell no.
> At a certain point, how you manage interpersonal relationships can limit your path. Sure, you can just devolve everything down to a transaction
A for profit business and your relationship with your company is transactional. Especially in any large company. The CEO of my company wouldn’t know me from the other 1.6 million people that work at the company.
Scrounging on the web suggests that Stripe may be EBITDA-profitable but not GAAP-profitable. $60M (perhaps double that with all the other benefits laid out here) is easily enough to delay GAAP profitability by a quarter or two. That may not seem like much, but it has a huge impact on investor sentiment.
[1] 0.148000200000*14/52
"Feeling super bad about this" is not actually a consequence.
I worked at a company that had massive layoffs, leadership claimed it was the hardest day of their life, two weeks later they were literally laughing about the people they laid off when they realized they already had to rehire for some of the positions.
Saying "we take full responsible" here doesn't translate to accountability, it means they want to start the conversation by absolving themselves of any guilt.
So I start suspecting anyone who talks like this if narcissism. The orange toddler talked like this too.
I'm sorry, but the wording rather funny. That sort of suggests that it was somehow an option to not pay for used PTO, even if they are legally required to.
At one startup... I got called into the HR office on Monday morning, laid off with no advanced notice, and was only offered two weeks severance provided I signed a non-disclosure agreement that banned me from saying anything negative about the company for two years (and there was a lot I could've said).
That company also lied big time about their financials to get me to join in first place. So I learned some valuable life-lessons...
I was in a somewhat similar situation - got laid off in 2020, with a great severance pay etc. I was on a working visa which got canceled within a couple of weeks (not sure how it works in the US, I was working in a different part of the world). The market was low so it was difficult to find something quickly to get another job visa. On top of that I couldn't get back to my home country, since the borders were closed due to COVVID. I had to live for several months on short-term visitor visas and had to renew the visas constantly - it was a separate bueracratic hell. Eventually I found a job and got a permanent visa, but these months cost me and my family a lot.
So here's the question - would it be (legally?) possible to put the visa holders on garden leave and pay them i.e. $1/m until they found a new job? Or at least do it temporary, for like 3 months or so. Because honestly, I didn't care at all about the money and stuff, the visa problem was absolute hell.
"We know that this situation is particularly tough if you’re a visa holder. Basically you are fucked. Here is a dildo sign to show you in picture what your situation is. There is nothing called non-employment visa. So here is a picture of two dildos if you are still reading this"
These risks come with the territory; there's a whole rest of the world outside of Silicon Valley where things move a lot slower; beyond that, there's still another rest of the world where people are literally struggling to put food in their mouths.
Working in a startup and getting big salaries and stock options, but possibly losing said options, are all part of the risk of doing a startup, and the people who took the initial risks will always deserve a bigger piece of the pie.
I want to make it clear that i'm 100% supportive of what Stripe is doing though. It's exceptionally generous and unorthodox to do this for your (soon to be former) employees.
People like to <poop> on CEO's & leaders in good times, but employees often forget that while the employee can just go get another job, the leaders have to keep hundreds, thousands, of people employed while also retaining customers and dealing with investors. They have to deal with keeping those hundreds/thousands employed every...single... day.
SQ 2021 Revenue: $17B
SQ 2021 cash and short term investments: $5.3B
Stripe 2021 Revenue: $12B
Similar businesses, operating in the same market, with the nearly the same number of employees (about 8000). Barring exceptional circumstances, we would expect their financial health to be roughly similar.
You said it yourself:
> the leaders have to... [deal] with investors
The economy is contracting and their share price is falling. They could afford to dip into cash and keep everyone on board but their investors are more concerned about propping up the valuation. They don't have two shits to give about the people they're letting go.
> They could afford to dip into cash
Why should they risk cash reserves with an uncertain future? So that they can layoff 30% later on if things get worse?
https://www.wsj.com/articles/stripe-cuts-internal-valuation-...
Why? Because periods like now is the absolute best time to steal market share from established companies - which would grow the team and business. Startups (competitors) begin to post less risk because they'll be hard to find financing.
So - if growing the business is a CEO's top responsibility...if the leadership felt they could steal business from others that experience attrition - they would. My guess is they don't seem to feel that way about the current moment.
They're worried about surviving the contraction, nobody knows how long it will last and that cash only goes so far.
This an example of how bullshit jobs are created. Why keep people on a payroll if you have no use for them anymore?
It's not like startup founders who haven't been taking a salary (or been taking a below-market salary).
...can usually afford to never work again!
No, the created the business in attempt to get wildly wealthy and unfortunately they can't do this without also having to hire a bunch of people. They certainly don't create the business for the sake of employing people.
> People like to <poop> on CEO's & leaders in good times
In my experience the opposite is true, in good times people can't help but <polish the nob> of CEO's & leaders, since easy employment and good pay make the fundamentally exploitative nature of their relationship less visible.
> employees often forget that while the employee can just go get another job, the leaders have to keep hundreds, thousands...
of thousands of dollars in their account even when they "fail".
The key difference is that if I don't get another job, I lose my house and ultimately the ability to feed myself. If I don't play the game I quite literally am sentenced to death. The CEO of that lays off thousands can very easily spend the rest of their days in comfortable retirement at any given point.
I need to sell my labor to live, CEOs need my labor to get richer.
This sounds a bit emotional to me. Layoffs can be an emotional topic, but let's reflect for a moment.
I guess the thrust of the remark is to put some sort of public "shame" on companies that perform layoffs (especially such fast ones) for the major inconvenience they cause for thousands of people. I suppose the fear is that without any "Shame" these companies will hire and fire spuriously without repercussion?
Relatively speaking I think Stripe handled this well. Yes it was a mistake to hire these people, but now that you're here it would be a bigger mistake to keep people you don't need.
I wonder if every company would be so forthright about this or whether many would just "cut" "low performers" at an accelerated rate over a year with no severance.
I don't think that's what he meant. He is asking whether the CEO is just blowing hot air when they say "we take full responsibility..." or whether there are consequences to their bad decisions, i.e., responsibility for those decisions.
Either the CEO is implying that they aren't always responsible, which is bogus, or they are stating an obvious fact as an empty platitude, which is most likely the case, or perhaps they're implying that to them "responsibility" means more than just "taking the blame" which is probably not the case here.
software dev here - was working with a client, and a pm was pushing some not-great idea. I pushed back - "this is not core, not important, shouldn't be a focus, other things are more important, and already decided".
Pushback from them: "no no no, this is vital. Look... if there's a problem, I'll take responsbility".
6 months later, there's a lot of complications that I'd foreseen (and documented) earlier which were summarily ignored at the time. The "I'll take responsibility" person isn't on the project any more - they left. I'm fielding a bunch of "why was this done? this wasn't agreed on - what were you thinking?"
Well... when I don't do what they ask for, I'm stubborn/obstinate/roadblocking/etc. When I do it... it's wrong. Even if that original person was still around, I would be the one fixing all the bad data, having to reverse out the changes, revert to earlier state while keeping newer code in place. The "I'll take responsibility" is essentially meaningless in many situations. And I called that out too at the time and was told I'm too negative/cynical. It's just experience.
Lest this be seem like doom and gloom, I've experienced the opposite situation from above, where 'ownership' and 'responsibility' and whatnot were more enforced and honored across an organization, but it's been very rare in my experience over the last 20 years, and seems to be getting even less common. Having seen both situations, it's easier to tell the difference.
More and more folks having shorter tenures makes it harder for any org/team ethos to 'stick' for any meaningful impact, and absent that, it takes a lot more organizational effort to keep a commitment to stated corporate values. Not impossible, just hard to do, and often slips...
I guess that's the problem? These days leaders have no problem "taking responsibility" to make themselves look good when there's no consequence("hey I did what all good leaders do").
The op question is not emotional in the slightest. The executive leadership made a series of mistake. People are left in the lurch and the business has suffered because of these mistakes. Asking if the incentives are aligned here is a strict matter of rational business calculus.
They don't owe you anything. Not an action. Not even an explanation. The world doesn't owe you anything either.
They took responsibility by responsibly doing well by their former employees.
To many it looked like covid, wfh, etc resulted in a new world with a permanent step level increase in the internet economy that caused Stripe's business to dramatically increase and thus the founders grew the company to support the activity and continue being the best and most innovative internet payment service.
It turns out unfortunately the growth was temporary, inflation skyrocketed, and the world is probably heading into a recession that will further decrease or slow the growth of the internet economy and thus Stripe's business, so the founders are acting quickly and responsibly to cut costs in order to maintain a position of financial strength and continue growing the business and being the best and most innovative internet payment service.
In time, if Stripe continues to succeed and have exceptional business performance, the consequences to the founders should be financial reward for taking quick and effective beneficial action that grew the business.
It's good to see leaderships take responsibility and change course in the best possible way. But the whole this is our fault, we should have seen this coming story is a bit nonsense. They are just being nice about the messy situation and taking responsibility even though its outside their control.
1. Some way to help with the immediate layoff. Reasonable severance/etc is about what I'd expect.
2. Concrete action to prevent the problem in the future. The post identifies specific errors in judgement and at least pays lip service to avoiding layoffs in the future.
I'm not sure how serious they are about 2—given the structure and incentives of large corporations, how serious they even could be about it—but at least they're talking about it. I would not be surprised to see growth pressure overwhelming any strategic or cultural changes they make today if business conditions pick up again, with the whole cycle repeating over the next 5–10 years.
Just hold on to the staff and swallow the small dent in opex.
Also: Seems like the whole of VC is now on the FCF/Opex control train.
You plan on x growth happening, so you hire assuming x will happen.
Say x/2 happens. You now overhired. Even if x is still pretty good.
And which one is really more important to humanity?
I feel bad for the folks who have been impacted.
I've been laid off twice, and it's always painful, hurtful and damaging to my mental health. Take care of yourself the best you can, there is a fair amount of research now that says layoffs can have lingering mental health affects for years to come. [1]
Some resources that might be helpful: flexjobs.com is a good curated job board for remote work. teamblind.com is a professional social networking site for engineers, it's generally super toxic, but the community comes together for layoffs and a lot of people will offer referrals.
[1]: https://www.wbur.org/news/2013/06/14/recession-layoff-scars
This is one of the most interesting statements ever written. If you ran a 'Idea Fourier' on this signal, so many things fall out: cheap interest rates pushes crazy valuations and estimations, believing the low interest fantasy was a requirement to getting their funding in the first place, now how easy is it to just say 'oops, no take back-sies'
Interesting time to be alive.
Roughly speaking, a Fourier transform takes as input a signal (like audio) and produces a spectrogram (the signal's component frequencies).
So "Idea Fourier" is a roundabout way of saying "take the component ideas from a statement". But really, GP just suggested making inferences or deductions, which has nothing to do with Fourier transforms.
2) Saving this in case I ever need to tell a portfolio company how to do a layoff.