These type of investors have been chomping at the bit to do this for about a decade. I sort of knew it was coming which is why I transitioned to become a trader of capital rather than a trader of my time.
That being said, the salaries will still be great, just not "I make more than a surgeon" great.
US FAANG IT salaries are insane, well beyond normal, especially compared to european ones. I know these companies made an insane amount of money, but still they were outrageous.
Person A and B create system X that is responsible for some % increase in revenue.
Person A and B should be compensated well, so they don't go over there and create system Y. Especially given the FTC might be clamping down on non-competes, this is a plausible scenario.
Person A and B eventually tired of maintaining system X, so they bring in new people. The new people, once they have earned the trust of persons A and B are now the successors. The successors should also be paid well for the same reasons.
Scale this up, and you get the salaries.
I know this because I spent my career becoming the new persons A and B, and the bean counters always hated people like me.
The salaries are thus well deserved, but that is why the companies are trying to create electronic slaves that can be driven by a few persons A and B.
That worked for big american tech companies only thanks to the insane amount of money they made, also thanks to the de facto oligopoly they have. Alphabet inc alone made 70B of net income in 2021.
I know no other market like this.
Outrageous salaries are part of FAAMG’s* moat. It’s very hard to lure a googler away to your startup when you can only afford to pay them half their current salary. And even if said googler is interested, their lifestyle is now depends on that salary.
* I don’t count Netflix as in league with the others
The basic problem of supply and demand for skilled labor doesn’t go away.
This may make talent at the top end more tolerant of risks and willing to dive in and try and disrupt a company facing the inevitable morale and operational challenges that come after layoffs
They're giving the appearance that they're working on marvels. Given the amount of raw human intelligence they've hired over the years and the profoundly underwhelming output of the organization it's pretty clear it's was an illusion to trap investors.
wow. the hubris and inhumanity. How can someone who isn't running the company day-to-day purport to know exactly what staffing levels ought to be. Also why is a billionaire begrudging people for making 300k/ year. wow
> Billionaire Chris Hohn’s 13-Year Winning Streak at TCI Ends With Fund Slumping 18%. Sell off in equities hurt bets such as Alphabet and Microsoft. Last year’s loss was the second since the fund started in 2004.
He moaned about cost reduction to Sundar Pichai in Nov 2022 too[2]. I wonder whether these sentiments were echo'd by other such investors too and how much all that contributed to Google's recent layoffs[3].
His fund has done activist moves in the past too so this sort of advocating isn't new to them[4]:
> In 2008 the US railroad company CSX won a court case against the Children’s Investment Fund and 3G Capital Partners, another hedge fund, after the funds announced that they had acquired about 20% of CSX’s stock.[9] TCI succeeded in electing four of its five directors to the CSX board, but CSX shares declined by about 50 percent after the meeting. TCI declared defeat and sold its shares, taking its directors off the board. Chris Hohn, the founder of TCI vowed to abandon shareholder activism as an investing strategy.
>TCI’s stake represents 0.27% of outstanding Alphabet shares, according to Factset data, a position that the hedge fund has steadily accumulated since 2017.
>However, the company has three classes of shares, and co-founders Larry Page and Sergey Brin still have solid voting control thanks to their nearly exclusive ownership of Class B shares, according to the firm’s 2022 proxy report. That makes an activist takeover effectively impossible.
You are moving the goalpost. The prior comment said "taking on an investor." Public trading doesn't work that way. That's a concept for privately held companies. Those are just facts.
The headcount in tech recently grew way faster than the rest of the economy, and faster than the companies growth as well. As you get bigger headcount shouldn’t necessarily rise by more than the company is growing, which is what happened.
In a full blown recession going back to the headcount of 2 years ago isn’t exactly some Gordon gecko capitalist evil. It’s pretty reasonable.
Especially as it seems most tech companies are culling admin and hr staff, which is not where value is being created.
I disagree. I think that companies should have a strong obligation to back their employees during downturns otherwise it is just another form of externalization: make the profits when you can and saddle society with the costs when you can't. That leads to more and more wealth inequality.
You could argue your point the other way round. When times were good these companies clearly overemployed staff. That is very unfair to investors. Cutting back at this time finally prioritizes investor goals, and it’s pretty minimal anyway.
Not to mention the insane benefits these employees get, these are the best employers in the world. It’s clear employee happiness was much more important during good times than any investor sentiment. Investors just shut up as the business was still growing.
There is very little that a CEO can do that is unfair to investors short of defrauding them on purpose.
Investors are a rule are smart enough to realize that they - by virtue of being 'passive' - allow people that know more about the business to run it. Back seat drivers are hardly ever welcome as investors, if you're that good you should go and run another company, surely that's a better use of your talent then than to try to run a diversified fund.
If you don't want wealth inequality, let everybody from birth on start at the same zero, or rather, the same 1 million, or whatever is possible. Otherwise, what kind of equality are we talking about here?
With AI, capital will dominate everything. Crass inequality will be the norm. The only path out of this will be paved with blood. Except if humanity is much smarter than I think it is.
We're talking about the difference between the billionaires that are the subject of the article and the people who end up being laid off (who are still pretty rich compared to many people). This guy is utterly isolated from the consequences of the decisions that he is asking for and effectively wants society to pay for his results. That's mismatched at many levels.
So what? All people in power are utterly isolated from the consequences of the decisions they make. I don't see any mismatch here. I feel it is quite pointless to talk about the morality of billionaires. They are amoral pretty much by the definition of a billion.
Apologies for being rude but this is a discussion forum and I'll determine for myself what it is pointless to talk about and if you feel that you don't care then don't bother entering the discussion.
FWIW I don't think that it is pointless to talk about the effect that billionaires are having on our lives precisely because their billions insulate them from the consequences which effectively makes them our new kings with their own dynasty. And the kings of old were at least somewhat accountable to their population in times of hardship and their influence was limited to the countries that they governed (or decided to go to war with).
I sincerely believe that if we don't find a way to reign this in that it will come back to haunt us.
What he is saying is that in any society the elite are isolated, this isn’t something unique to billionaires. You think Chavez in Venezuela or Xi in China is still a man of the people?
Perhaps this is a good thing. You can’t make emotional decisions when you are responsible for millions of people potentially. You literally wouldn’t be able to have leaders if leaders were emotionally involved in tens of thousands of peoples hard lives.
Then maybe the solution is to do away with the leaders who can't. Because lots of people who crave power are exactly the ones who shouldn't have it in the first place. Xi for instance is not exactly lighting the way in terms of ethics.
What Switzerland did in the 1940's has absolutely nothing to do with what they do today, likewise the aggressor Germany, hardly anybody alive back the is still alive today and certainly not in a position of power.
You asked for an example, I gave you one.
Have a read to see how Switzerland created their political system out of necessity:
I care about the topic, and I don't think we are too far away in our opinions. Apologies for being rude, I just don't think you are approaching this from a fundamental enough point of view, but a naive point of view where you think that this game has rules you can use to win. No, you have to change the game entirely.
As for me being naive: I am pretty realistic in my expectations but I do believe that the achilles heel of these characters is exposed: their wealth stems from a bug in capitalism that allows the unfettered collection of money, power, influence once you achieve a certain base. The fact that we don't have a way to effectively tax transnational entities is something that is absolutely fixable, and we currently do not have rules for that. Changing the game entirely is throwing the baby away with the bathwater, taking care of < 500 individuals in such a way that their tricks are no longer going to cause the upheaval of the lives of 100's of thousands of others is definitely something I would be happy to see implemented.
I am not trying to shut down the discussion, just what the discussion is about.
The game needs to be changed entirely, and we need to talk about how. Communism didn't work, capitalism does not work anymore, and the topic you'd like to discuss is really just a logical consequence of raw capitalism. I understand that capitalism was probably good to you in particular, so you are not interested in changing the game, just fixing it here and there, but that is pointless, as I already said.
My empathy with overpaid Googlers is also quite limited. Maybe they can now do something useful with their lives. I don't think Google's website works better than 15 years ago, so what are all these people doing?
Whether capitalism has been good to me or not is besides the point: you can wish for the moon but you will probably not get it, so it helps to set realistic and achievable goals. 'The revolution' isn't going to happen, as long as people are fed and there are 50 channels of sports, besides that typically they result in new bosses who are the same as the old bosses.
Capitalism, like democracy is broken, but it is the best we've got - so far. Replacing it outright with some new system that somehow magically overcomes all of the shortcomings of the old and does not introduce new ones is a pipe dream, but you can make moves to fix the biggest holes and then keep doing that until you have incrementally arrived at a much better solution.
As for my empathy with overpaid Googlers: given the choice to sympathize with them or with their nil contributing rent seeking shareholder billionaire overlord I will side with them, and given the choice between them and a homeless person, inmate or mentally ill person my sympathy will be with the latter. Dealing in absolutes will get you quite literally nowhere, it's tilting at windmills at best and a distraction at worst. But feel free to pursue your goals in your way and leave me to do the same in mine.
There isn't a hard choice between these and no reason why we can't both pursue our goals in different ways and end up in a better place. It increases the chances of positive change.
I might buy this argument for privately owned company, but for public traded company, wouldn’t they acting against their interest saddle the society with the costs (as the public, or in other words, society, is their owner)
I understand the follow up argument about a majority of people might not hold ownership in any public company at all, but that feels like a separate topic.
The public is not in general the public that is active on the stockmarket, in spite of the name 'public company' you are looking at very large amounts of institutional capital and a relatively small part owned by the guy in the street. Of course in times of a perceived downturn all of those institutional investors will be trying to offload their holdings onto the guy in the street before the music stops and that is one way in which the 'public' then participates in the market: they lose their shirt.
> The headcount in tech recently grew way faster than the rest of the economy
I am confused - are you saying did google management made an incompetent decision to hire them and now firing them is the rifgt decision?
Of decision 1 was incompetent, why do you believe decision 2, by same management, is competent? What if they fire all the wrong people? What if you need to fire the management? Has anyone even checked if management needs to be fired?
It's a business, not a charity. They have absolutely no obligation to keep tens of thousands of overpaid people on their payroll. It's not like we're talking about abused minimum-wage workers with no alternatives here either. And they're getting some pretty big severance packages, too.
I feel bad for the people on work visas, but that's a problem with the American immigration system, not Alphabet, and would apply anyone working at any company that needs to lay off people.
> I feel bad for the people on work visas, but that's a problem with the American immigration system, not Alphabet
If Google had even 10% of the resources working on lobbying the US to fix the immigration system as it did lobbying the US to not antitrust it to death, I would buy this.
I can feel bad for tens of thousands of overpaid people because being laid off sucks. Choosing Alphabet is also choosing for presumed job security. Among tens of thousands, I can bet 100% that among them will be visa holders, people paying off huge medical debt, people with disabled dependents, people with huge student debt, people who are trying to get their children through school, people with complex medical conditions that now risk changing their medical support system due to insurance changes, people who will struggle to do the interview grind because of being a single parent, etc.
The "of course businesses need to be ruthless sociopathic monsters that care only about profit for investors, even at the expense of their employees and customers" is a choice that society made. IMO, an ethical system would have employers really consider themselves obliged to their employees.
At the very least, if we want to go in this direction then we need to retire the term "job creator" from our lexicon permanently. Employers can't get credit for being oh so generous in granting jobs when the response to cutting jobs is "well what did you expect, your employer hates you."
> They have absolutely no obligation to keep tens of thousands of overpaid people on their payroll.
I’m not sure why you think they were overpaid. Surely a lot of these people delivered value well above and beyond their salary for Alphabet, who required them to live in a very high COL area. A 300k salary in the Bay Area, unfortunately just gives you enough to live an okay life. It’s not like 300k in Alabama where you can live like royalty because of the depressed area.
Your perspective seems to be an internalization of extreme capitalism that only benefits the capitalist class. The workers, be they middle or low income, do not share this sentiment. Most other advanced nations do not allow this type of worker exploitation.
Why shouldn’t they have an obligation to keep employees on their payroll? They’re not in danger of going out of business. In fact, they’re wildly profitably. So, there is no need to make these cuts, only a desire to. The company made the mistake, but now society will have to pick up the tab, not the company managers and investors who ultimately made the decision to hire those people in the first place.
More efficient businesses are better for the world et large. It’s not an indoctrination into extreme capitalism. Things cost less and businesses produce more when they’re run efficiently.
And really, your perspective on Bay Area salaries is detached from reality. Yes it’s expensive, but there are people there who survive on below minimum wage, under the table jobs. Make friends with your janitor or something and get some perspective.
The rest of the country is starting to hate tech workers, and takes like this are why.
> there are people there who survive on below minimum wage, under the table jobs.
What you’re describing is someone who’s living in the margins of society. Committing tax evasion just to survive while still living in poverty with multiple roommates just to get by is not what I would consider an okay life. This person will have no hope of retiring, so they’ll work until they die, which will be early because they won’t have access to quality healthcare in our expensive, privatized healthcare system. That’s certainly not a life I want to live, and I doubt you would want that either.
> Things cost less and businesses produce more when they’re run efficiently.
If you take a narrow perspective where the only thing you want to maximize is economic output, that’s true. But what we see in American society is that this comes with antisocial trade-offs. Wealth inequality has skyrocketed, health outcomes have plummeted, homelessness is a plague. I think there should be a balance. Yes, we want effective and efficient businesses, but we need to balance it with overall benefits to society and that’s not happening in America.
> It's a business, not a charity. They have absolutely no obligation
Should keep this in mind next time a corp asks for a bailout, taxbreaks, or has major court case against them. Then it suddenly becomes all about understanding their situation and protecting valuable business
I find it either so naive or just to be a self-relaxing attempt to blame the gamer instead the game itself. Attacking and blaming those individuals or those patciular campanies which play the game as the rules are set, have always been easier than criticising corny capitalism we are living in.
Virtue signaling over individuals or particular companies like this have always been a comfortable spot to be rather than trying go for the real reasons such as crony capitalism indeed is incentivizing everyone in the game to drop everything else but just what's written in the law related to morals or anything about being a human and just focus on the profit.
In most of the times those individuals know all the rules they are given so good that they even calculate the penalties if they break them and they do so if breaking them is more profitable than paying for them.
Yet we the people working under this rule feeling so accomplished pointing at fingers to those while all we do is distracting ourselves and everyone else from the real reasons not realizing doing so is just the same thing as sending "thought and prayers" to the ones who lost their jobs and mostly lost about their future, at least for a while.
I think that. I am definitely feeling the squeeze myself. I don't like that this works but I cannot deny that it worked on me. Edit: I do not work at Google, can't say much about myself and my own situation more than what I've already shared here, but it seems that every company is going through this now.
Are you expecting people on tiktok to post videos of their actual workday of "Sat behind a screen for 8 hours, tapping on a keyboard"? I get its a bad look, but people purposefully curate their images and lives on social media platforms to look more fun/exciting/interesting than they actually are.
"And another thing, employees keep using up a full allotment of oxygen every day. Consider half portions or cutting breathing gasses out of the budget entirely."
"Due to supply chain issues, oxygen prices are at a decades-long peak. Consider mixing up to 30% CO2; also tout your commitment to combating climate change."
Reducing headcount growth to a level 2 years ago, doesn't really sound that crazy in a recession. Also, headcount in tech, grew at a ridiculous fast pace over the past 3-4 years only. All these lay-offs aren't really surprising to me. What is surprising is the amount of people actually being surprised.
A recession is defined as three consecutive quarters of negative growth. A single quarter of negative growth doe not meet that definition. Even technically.
Exactly. There is no source for the unsubstantiated 'three successive quarters' claim.
> though the official determination in the US is made by the NBER
I would not wait for an entity to determine and tell us if it is too late. Hence why businesses are preparing now, even when they should have done in November 2021.
And of course, I am not saying this in hindsight either, since the warning signs were there in [0] and finally when it happened [1].
CNBC talking heads, economists, etc. have been calling for one. Better to prepare now. By the time the recession is confirmed it will probably be over anyway.
We've been "preparing" for a recession for a year. Since then, we've seen low unemployment, flattening inflation, GDP growth, and wage growth in the US. It really is starting to look like the "soft landing" is working.
Why though? It’s not like they need the money in the short term. They have almost $200 billion in cash. For the majority of Google’s departments the need for employees isn’t tied to demand.
Google desperately needs to find another money printer, and ostensibly they staffed up to help them do it. That hasn’t changed, and Google‘s workload won’t drop noticeably in a recession outside of a few departments.
And even in the those departments, they have so much still growing cash on hand, that they’d probably be better off to weather the storm the lay off only to rehire in a year.
Being the steward of $200 billion is an enormous responsibility. Just because you're sitting on a pile of cash does not mean that you can do stupid things with it and not face immediate consequences by your employers (the shareholders).
While we're not in a recession, I agree with your point. It sucks for the people it happened to, but the big tech layoffs so far have been minor compared the headcount growth the last couple of years. Economy wide, unemployment is at record lows. Step outside big tech and companies are still struggling to find talent.
There's also an argument that big tech keeping a bunch of people on payroll when they don't need to slows down overall growth in the industry as it makes it harder for startups to find talent.
Correct, yet the conditions do exist that point to a potential recession in the next 6-12 months. The stock market reactions and business reactions are forward looking. Even just the specter of a recession (not to mention the raising interest rates and sticky inflation for certain goods/ housing) can impact behaviors and allow business activity to slow enough for one to occur, sort of a self fulfilling prophecy. I'd imagine the Fed is not pleased that companies are hording talent and mis-allocating capital in this way (high wage inflation) to retain them (unnaturally). The wages and salaries are artificially inflated, built up over the last decade of near 0% interest rates. The Fed will persist at slowing business activity until the point it breaks. There is 3.5% unemployment in general in the US but within software developers it is more like 2.2%. Once a developer is let go, more/less they immediately find work. This is only partially what the Fed wants. It is good to curb the demand by freeing up these workers but they want real unemployment to rise before they will start to ease.
Yes, sadly, there is nothing illegal about being a giant pile of <moderators will ban me for continuing this sentence>.
Instead of suing, unionize and take a bit of the power we all ceded to the hedge fund managers back. It won't make things perfect, but at least you'll have federal protections and Weingarten rights and the like and the ability to push back and have the tiniest bit of power in your work place.
When I read your comment, I assumed he actually had a 365 million salary, which would be amazing. He'd be paying 50% tax on the majority of that. I'd actually give him some respect for that, actually paying tax "fairly" and not optimizing.
I don't know anything about his tax arrangements but he lives in South Kensington (in London) I think. I seem to recall reading about one of those classic South Ken arguments with neighbours because of him building a basement swimming pool or something.
He's our Prime Minister's old boss as well. Rishi Sunak used to work for TCI[1].
It is likely that the shares are held by a family trust or an offshore company registered in another jurisdiction, rather than being held personally by him. Although I am not familiar with the UK's tax laws, in other countries, loopholes exist that allow for taxable income from dividends of shares held personally to be reduced or eliminated through capital loss and depreciation deductions.
I didn't downvote, but I can see how people would think it's off-topic, as examples from more-guns-than-people-land aren't necessarily enough to draw a worldwide conclusion.
The problem is with the mega rich avoiding taxes while the rest of the plebs pay taxes.
It's not moral to avoid taxes while the rest of the people pay taxes and you use public services.
If the rich lobbied to abolish all taxes so it was fair, that's fine. But that's not the case. They lobby to create laws that help them avoid tax whilst making other people pay tax. Because at the end of the day, it's in their best interest for the government to function, just not on their dime.
At least he said directly what everyone knew and what every CEO hid behind "I take the full responsibility": the current layoffs are a maneuvre to lower the compensation of the employees. These companies know they can rehire these people at any point in the future, so they are doing this to keep the wages in check.
I find it funny that there are economists who still use the argument of class warfare for wealth taxation, indeed we're living a class warfare, but now we know that it's the working class that's being assaulted.
Employment contracts are often written for periods of 4 years and include vesting schedules. It wouldn't be possible to lower a base salary of an employee without termination their employment contract by laying them off.
Google pays up to 24 months of compensation in the form of a severance package includes salary, vacation pay, bonuses and accelerated GSU vesting to laid off employees.
The minimum compensation for a laid off employee at Google in the US:
"We’ll pay employees during the full notification period (minimum 60 days).
We’ll also offer a severance package starting at 16 weeks salary plus two weeks for every additional year at Google, and accelerate at least 16 weeks of GSU vesting.
We’ll pay 2022 bonuses and remaining vacation time.
We’ll be offering 6 months of healthcare, job placement services, and immigration support for those affected.
Outside the US, we’ll support employees in line with local practices. "
After layoffs, it's hard to get comparable high compensation offers at other companies.
> The median salary at Alphabet in 2021 amounted to nearly $300000
Let's say the average salary of the 12k people they just fired was $300000. That's 3.6bn a year. Last time I checked Alphabet were burning ~180bn a year. I'm not saying 3.6bn is pocket change, but how is such a small % supposed to make a difference? For comparison, they were fined ~4bn in Europe recently.
Funny. I interviewed at a company that doubled down on development in a downturn and subsequently ate their competitors when things came back.
Maybe it's just doing what investors want, or using that as an excuse to trim some fat. But when you're profitable I'm not sure it actually makes sense to slow down just because the economy has.
My salary is 100, I have to spend 99 on food monthly, leaving me with 1 money as profit. If I can eat only 98 money, I double my profit.
I am not saying that is the case here, but reducing a small percentage of cost could matter if your margin is small. And in the case of those big corps, you can think of them as multiple companies internally, it’s likely they are doing layoff on departments/ divisions that have thin margin or unprofitable (ie. if you are in ads, very few were probably laid off)
Times are good now. $3.6 billion is $36 billion in a decade. One day, Google may need that money to survive. Also, Google’s 2022 profit was $67 billion (down significantly from 2021) so they just increased profits by more than 5%.
I suspect one of the strategic reasons FAANG keeps us around to work on bullshit projects is to prevent us from going on our own and making awesome competing products.
With that much control over our collective mind their preference for bigger businesses and publishers will ultimately be their own unmaking. In the global village sense we wont need them to find big vendors. Google would benefit more from promoting small players for a more chaotic, more competitive landscape where advertisement is actually useful.
Would you give me 2% of your salary if I asked you to? This isn’t intended to fix every problem, right away. This is a single measure. By the way, the fine you referenced is also calculated using a percentage of revenue: https://competition-policy.ec.europa.eu/antitrust_en
I donated 1% of my salary to a charity for a while, which I got back via tax deductions. Some guy transferring some of his wealth to some organization has nothing to do with a corporation trying to cut expenses during a downturn, though. It's a weak strawman.
The median is probably much much lower than average, but perhaps not by enough to change your point, and odds are those fired are around the median not in the stratosphere.
How is it "rent seeking" to state the fact that Alphabet has too many employees, and is overpaying them.
It's been a continuing meme on hacker news for the last decade, that Google/alphabet hoover up all the talent in the market and pay them "f*ck you money" with golden handcuff stock vesting schedules, in order to keep them off the job market and out of competitor's hands. that's been the understanding of the situation for 10 years.
Alphabet has hoovered up some 180+ small businesses that threaten their monopolies over the last decade, only to throw away all the IP and bench the employees, just to keep their markets intact.
Those are things to be upset about, and much more serious and manipulative business practices. Don't be upset that an investor has just pointed out Alphabet's bullshit and wants them to course correct, now that the free money has dried up, and you can no longer afford to feed an army of useless rest'n'vest employees.
And the Overton window has absolutely nothing to do with this conversation.
What is interesting is that value creation isn’t discussed at all in the letter or comments. That would be a far more interesting cross section of Google to discuss.
You don't have the headcount to keep the service(s) running. You have the headcount to develop new features and services. It still remains to be seen how the reduction will effect Twitter in the long term.
There's always bloat somewhere, but some of that bloat is there to allow your company to weather unexpected occurrences.
Sure you have two extra SREs you don't "need", and your HR department might be slightly overstaffed. But then one critical employee gets cancer and is off work for 6 months, and another employee has to go on maternity leave, and you don't have any extra employees in that department anymore. Hope you didn't fire your bloat!
Perhaps they should only have headcount to keep the service running. Twitters value proposition is still exactly the same as it was 10 years ago, and removing any new features since would not be noticed by most. Developing new features once the initial success has come could be considered making it worse if anything (e.g. reddit). Isn't the lack of new features one of the reasons we like HN?
Twitter made only very small, incremental product improvements in its ~10 years as a public company. It may as well round down to zero. That's one of the reasons its been gutted by Musk and co. Trimming the fat was the right decision there.
> Perhaps they should only have headcount to keep the service running.
These companies are generally valued as they are on the expectation of future growth. If Google said “yeah, we’re just going to keep everything as it is, forever, on a skeleton crew”, its investors would _freak out_, and rightly so.
I used to run Clara.io. It was a SaaS-based 3D editor. We shifted priorities back in 2015 but we were able to keep Clara.io running until December 2022 with less than one person investment per year. Details: http://www.cgchannel.com/2022/12/clara-io-is-closing-down/
Keeping a well designed website running isn't a major investment. Evolving a product though is.
I think the jury is out whether Twitter is going to continue to being a going concern. It could very well a major success.
But the fact that it didn't just crash and burn isn't that surprising.
I mean, if all mechanics and car designers and the entire auto industry were Thanos-snapped, my car would keep running for probably 6 months. There wouldn't be any new cars, though?
That depends on how you define "running fine". It wasn't running fine for 3rd party app developers and now they are cut off completely. DMs and like counts have been screwy ever since the layoff. There have been major outages, whole days where nobody could log in, other days where people were forced logged out. It's only "running fine" I'm the sense of how Twitter ran 10 years ago.
> still running fine is the elephant in the room here
No, it is not. Twitter had more down times in the last weeks than ever before. Regularly the timeline is not loading and since a few days the viewer count is broken.
I'm a bit unsure how to interpret these layoffs. Are they a consequence of recession? Or are they a consequence of recent anti-AdTech GDPR rulings?
I'm referring to the recent fine applied to Facebook. The ruling is long, but TL;DR would be as follows: It will become impossible to pay with privacy in the EU. My crystal ball is as good as yours, but I guess this will significantly squeeze AdTech. I wouldn't be surprised if AdTech revenue, valuation and salaries drops to whatever "good" IT companies make these days.
Why do people view this with such vile? He's a shareholder, and he's in because he thinks the company will make lots of money.
We should decide whether we like free market capitalism or not. What this guy is doing is very much the core of free market capitalism. He's also not doing something inhumane - it's not about funding new sweatshops or something, it's about not paying extremely high salaries to people if there's no need.
I know we're mostly well-paid tech workers here on HN, and I think we're all a bit scared that power balance might change a bit. I get that - but it doesn't make this action that despicable in my opinion. He's just trying to make money, and a public letter to call our the management is just so much better than eg. releasing self-driving cars that cause accidents or even hyping up worthless "currencies" that'll make less informed and vulnerable people poor.
> We should decide whether we like free market capitalism or not.
Nothing should be treated as absolute. The man considered as one of the fathers of free market capitalism, Adam Smith, directly appeals to humanity and sympathy in his other popular book, The Theory of Moral Sentiments. Yet for some it's like, either we have full on free market, with child labour, capital having all the power and all, or a command economy.
How about a middle ground with a free* market with regulations restricting the worst abuses of the greedy human nature? That's what already exists btw, it just needs more tuning. With more regulations to stop newly found abuses - today it's not child labour, it's pollution of all sorts, or disregard for (near-)slave labour, or optimising for short term profits at any cost.
People’s reactions suggest they too believe themselves to be overpaid. The harm to the laid off Googlers is they will not be able to find a job paying anywhere near as much because they are not each adding $300K plus benefits to the value of the company annually.
Is this guy serious? Imagine having so much money and then being mad for other people trying to earn more money so that they don't have to work for 40 years.
There is absolutely no accountability today. Is it not the CEO at fault if the company made a wrong decision? If he gets to reap the benefits his employees make which results in him getting obscene compensation, is it then not logical to also get a pay reduction if employees get fired.
I have a feeling these CEOs would be a lot less willing to do firings on a whim, if by firing 20k people they lost 30% of their compensation.
The older I get, the more I realize how much Nassim Taleb is right. All of the points made in his book are valid and are still standing the test of time.
There is no Skin in The Game today, hedgies and C-execs just jump ship when it is time to face your consequences. There is a big difference between being a Founder and being a CEO. The former actually deserves some respect.
Very weird to assume that Google is still a growth company. Advertising is slowing down and it’s only real business is ads. GCP might eventually make money but that doesn’t require a huge speculative investment. It should be treated like a utility.
I mean, IMO he’s right for the wrong reasons. The head count of Big Tech companies is - to me - absurd. I…imagine that there are some negative societal precipitations of orgs being that big, of all of that human effort pouring into some shit Google is going to - at best - launch and axe a moment later, instead of something with more use and longevity, all subsidised by squeezing more and more from their ad business.
I don’t give a rats about Google’s profitability though. Even if Google’s engineering ranks are filled with incredibly privileged highly paid people, I’m all for them sucking the company dry if it perturbs people like this investor.
I’ve also got the privilege of nobody caring what I think. If there were an iota of a chance that me writing this comment changed the head count at Google, I’d keep my mouth shut.
I assume Pachai's response will be essentially, "Well, like, that's just you're opinion man." This is a letter that lays bare exactly nothing new about the investor id, which is the capitalists id: more money, more money, more money! That means more profit. There are only two ways to get more profit: increase revenue or lower costs. Canning 100k people doesn't mean anything. Investors are simply avatars of a fundamentally indifferent universe, a human mouthpiece rendering a (surprisingly simple) equation.
Personally, I'd argue that naked indifference represents a wholesale abandonment of the good (cooperate/cooperate) Nash equilibrium for the bad (defect/defect) one, and rationally society should punish those advocating for this phase change of society at any level, since it represents an overall loss of productivity and profitability at a societal level. Andor (great show, btw) points out that seeds of rebellion are constantly forming in tyrannies, but the converse is also true, that the seeds of tyranny are constantly forming in liberal societies. This seems like such a seed, and it's worth asking what mechanisms are in place to undermine such seeds before they have a chance to grow into trends, into movements, and into the world in which our children find themselves. How about shame, guilt, reputation? Communal responsibility is always the first casualty of income inequality, which leads to a positive feedback loop of less responsibility, more wealth inequality.
In summary, Christopher Hohn should be ashamed of himself, people should spit on him in the street[1] and in his food, he should be sneered at and verbally abused by everyone in his community for being a greedy, inhuman monster that would destroy 100k lives for his spreadsheet. That this type of recourse is generally not available is a failure mode of our society that should be addressed through enacting any and all policy changes until this type of recourse is online once again. If this mechanism for basic humanistic correction isn't possible or practical, then Christopher Hohn and others like him should be taxed into oblivion.
It’s easy to blame the company for cutting jobs, but maybe the bigger problem here is hiring too many people too quickly in the first place, and worse, at stratospheric compensation levels. Not that I want to defend a greedy investor but he has a point.
Outside of Silicon Valley $300K/year median for rank-and-file employees is a number that just makes people’s jaw drop. Is that the actual median compensation?
In another time that same greedy investor would be hounding the CEOs of big tech companies about how they can't hire talented software engineers, if they didn't offer stratospheric compensation, and how competing for talent is the most important thing in the world.
It wouldn't surprise me at all to also find letters from these assholes to Silicon Valley city councils complaining about how the councils insisting on spending valuable real estate for affordable housing is hurting the region, because that's poor use of capital and they should instead build office buildings for tech companies.
This is the kind of bullshit that a union should be fighting. Wish we had some kind of organized labor for the employees so billionaires like this can't play with familys' visas to line their own pockets.
340 comments
[ 2.8 ms ] story [ 289 ms ] threadThat being said, the salaries will still be great, just not "I make more than a surgeon" great.
Person A and B create system X that is responsible for some % increase in revenue.
Person A and B should be compensated well, so they don't go over there and create system Y. Especially given the FTC might be clamping down on non-competes, this is a plausible scenario.
Person A and B eventually tired of maintaining system X, so they bring in new people. The new people, once they have earned the trust of persons A and B are now the successors. The successors should also be paid well for the same reasons.
Scale this up, and you get the salaries.
I know this because I spent my career becoming the new persons A and B, and the bean counters always hated people like me.
The salaries are thus well deserved, but that is why the companies are trying to create electronic slaves that can be driven by a few persons A and B.
* I don’t count Netflix as in league with the others
This may make talent at the top end more tolerant of risks and willing to dive in and try and disrupt a company facing the inevitable morale and operational challenges that come after layoffs
Edit: haha my bad. I was too furious reading the letter. Hate billionaires and their influence tbh.
not by 150k
Which is about 20% versus the 10% announced.
What marvels Google is working on?
But mostly trying to find another cash printing machine before their current one runs out.
Given the output of every other company tackling self driving cars, for example, I think there’s some evidence it’s the latter.
An “illusion to trap investors” seems like a big leap without any real evidence to support it.
hopefully this letter is fake
The letter is published on TCI's own website[0].
He is salty about his winning streak ending[1]:
> Billionaire Chris Hohn’s 13-Year Winning Streak at TCI Ends With Fund Slumping 18%. Sell off in equities hurt bets such as Alphabet and Microsoft. Last year’s loss was the second since the fund started in 2004.
He moaned about cost reduction to Sundar Pichai in Nov 2022 too[2]. I wonder whether these sentiments were echo'd by other such investors too and how much all that contributed to Google's recent layoffs[3].
His fund has done activist moves in the past too so this sort of advocating isn't new to them[4]:
> In 2008 the US railroad company CSX won a court case against the Children’s Investment Fund and 3G Capital Partners, another hedge fund, after the funds announced that they had acquired about 20% of CSX’s stock.[9] TCI succeeded in electing four of its five directors to the CSX board, but CSX shares declined by about 50 percent after the meeting. TCI declared defeat and sold its shares, taking its directors off the board. Chris Hohn, the founder of TCI vowed to abandon shareholder activism as an investing strategy.
Apparently he hasn't exactly abandoned it.
[0]: https://www.tcifund.com/CorporateEngagements/Alphabet
[1]: https://www.bloomberg.com/news/articles/2023-01-20/hedge-fun...
[2]: https://www.tcifund.com/files/corporateengageement/alphabet/...
[3]: https://blog.google/inside-google/message-ceo/january-update...
[4]: https://en.wikipedia.org/wiki/The_Children%27s_Investment_Fu...
Makes for nice clickbait though, I guess.
https://www.cnbc.com/2022/11/15/alphabet-must-cut-headcount-...
>TCI’s stake represents 0.27% of outstanding Alphabet shares, according to Factset data, a position that the hedge fund has steadily accumulated since 2017.
>However, the company has three classes of shares, and co-founders Larry Page and Sergey Brin still have solid voting control thanks to their nearly exclusive ownership of Class B shares, according to the firm’s 2022 proxy report. That makes an activist takeover effectively impossible.
You think they took a $6B position without chatting with the company about it?
Not always (like in a hostile takeover), but if you think TCI just punches “$5,000,000,000 of GOOG” into their trading platform you’re wrong.
In a full blown recession going back to the headcount of 2 years ago isn’t exactly some Gordon gecko capitalist evil. It’s pretty reasonable.
Especially as it seems most tech companies are culling admin and hr staff, which is not where value is being created.
Not to mention the insane benefits these employees get, these are the best employers in the world. It’s clear employee happiness was much more important during good times than any investor sentiment. Investors just shut up as the business was still growing.
Investors are a rule are smart enough to realize that they - by virtue of being 'passive' - allow people that know more about the business to run it. Back seat drivers are hardly ever welcome as investors, if you're that good you should go and run another company, surely that's a better use of your talent then than to try to run a diversified fund.
With AI, capital will dominate everything. Crass inequality will be the norm. The only path out of this will be paved with blood. Except if humanity is much smarter than I think it is.
FWIW I don't think that it is pointless to talk about the effect that billionaires are having on our lives precisely because their billions insulate them from the consequences which effectively makes them our new kings with their own dynasty. And the kings of old were at least somewhat accountable to their population in times of hardship and their influence was limited to the countries that they governed (or decided to go to war with).
I sincerely believe that if we don't find a way to reign this in that it will come back to haunt us.
Perhaps this is a good thing. You can’t make emotional decisions when you are responsible for millions of people potentially. You literally wouldn’t be able to have leaders if leaders were emotionally involved in tens of thousands of peoples hard lives.
What is your blueprint for achieving this practically, instead of saying nice sounding dreams?
You asked for an example, I gave you one.
Have a read to see how Switzerland created their political system out of necessity:
http://www.athene.antenna.nl/MEDIATHEEK/KOBACH-1.html
As for me being naive: I am pretty realistic in my expectations but I do believe that the achilles heel of these characters is exposed: their wealth stems from a bug in capitalism that allows the unfettered collection of money, power, influence once you achieve a certain base. The fact that we don't have a way to effectively tax transnational entities is something that is absolutely fixable, and we currently do not have rules for that. Changing the game entirely is throwing the baby away with the bathwater, taking care of < 500 individuals in such a way that their tricks are no longer going to cause the upheaval of the lives of 100's of thousands of others is definitely something I would be happy to see implemented.
The game needs to be changed entirely, and we need to talk about how. Communism didn't work, capitalism does not work anymore, and the topic you'd like to discuss is really just a logical consequence of raw capitalism. I understand that capitalism was probably good to you in particular, so you are not interested in changing the game, just fixing it here and there, but that is pointless, as I already said.
My empathy with overpaid Googlers is also quite limited. Maybe they can now do something useful with their lives. I don't think Google's website works better than 15 years ago, so what are all these people doing?
Capitalism, like democracy is broken, but it is the best we've got - so far. Replacing it outright with some new system that somehow magically overcomes all of the shortcomings of the old and does not introduce new ones is a pipe dream, but you can make moves to fix the biggest holes and then keep doing that until you have incrementally arrived at a much better solution.
As for my empathy with overpaid Googlers: given the choice to sympathize with them or with their nil contributing rent seeking shareholder billionaire overlord I will side with them, and given the choice between them and a homeless person, inmate or mentally ill person my sympathy will be with the latter. Dealing in absolutes will get you quite literally nowhere, it's tilting at windmills at best and a distraction at worst. But feel free to pursue your goals in your way and leave me to do the same in mine.
There isn't a hard choice between these and no reason why we can't both pursue our goals in different ways and end up in a better place. It increases the chances of positive change.
I understand the follow up argument about a majority of people might not hold ownership in any public company at all, but that feels like a separate topic.
I am confused - are you saying did google management made an incompetent decision to hire them and now firing them is the rifgt decision?
Of decision 1 was incompetent, why do you believe decision 2, by same management, is competent? What if they fire all the wrong people? What if you need to fire the management? Has anyone even checked if management needs to be fired?
It's a business, not a charity. They have absolutely no obligation to keep tens of thousands of overpaid people on their payroll. It's not like we're talking about abused minimum-wage workers with no alternatives here either. And they're getting some pretty big severance packages, too.
I feel bad for the people on work visas, but that's a problem with the American immigration system, not Alphabet, and would apply anyone working at any company that needs to lay off people.
If Google had even 10% of the resources working on lobbying the US to fix the immigration system as it did lobbying the US to not antitrust it to death, I would buy this.
Who says they are "overpaid"?
It always baffles me how worker solidarity ends at the slightest sign of someone making good money.
The "of course businesses need to be ruthless sociopathic monsters that care only about profit for investors, even at the expense of their employees and customers" is a choice that society made. IMO, an ethical system would have employers really consider themselves obliged to their employees.
At the very least, if we want to go in this direction then we need to retire the term "job creator" from our lexicon permanently. Employers can't get credit for being oh so generous in granting jobs when the response to cutting jobs is "well what did you expect, your employer hates you."
I’m not sure why you think they were overpaid. Surely a lot of these people delivered value well above and beyond their salary for Alphabet, who required them to live in a very high COL area. A 300k salary in the Bay Area, unfortunately just gives you enough to live an okay life. It’s not like 300k in Alabama where you can live like royalty because of the depressed area.
Your perspective seems to be an internalization of extreme capitalism that only benefits the capitalist class. The workers, be they middle or low income, do not share this sentiment. Most other advanced nations do not allow this type of worker exploitation.
Why shouldn’t they have an obligation to keep employees on their payroll? They’re not in danger of going out of business. In fact, they’re wildly profitably. So, there is no need to make these cuts, only a desire to. The company made the mistake, but now society will have to pick up the tab, not the company managers and investors who ultimately made the decision to hire those people in the first place.
And really, your perspective on Bay Area salaries is detached from reality. Yes it’s expensive, but there are people there who survive on below minimum wage, under the table jobs. Make friends with your janitor or something and get some perspective.
The rest of the country is starting to hate tech workers, and takes like this are why.
The rest of the country is myopic, then. Workers should strive towards better wages, instead of celebrating layoffs.
It doesn't make any sense to hate engineers who can afford what most families did in the 50s and 60s, on a single paycheck.
What you’re describing is someone who’s living in the margins of society. Committing tax evasion just to survive while still living in poverty with multiple roommates just to get by is not what I would consider an okay life. This person will have no hope of retiring, so they’ll work until they die, which will be early because they won’t have access to quality healthcare in our expensive, privatized healthcare system. That’s certainly not a life I want to live, and I doubt you would want that either.
> Things cost less and businesses produce more when they’re run efficiently.
If you take a narrow perspective where the only thing you want to maximize is economic output, that’s true. But what we see in American society is that this comes with antisocial trade-offs. Wealth inequality has skyrocketed, health outcomes have plummeted, homelessness is a plague. I think there should be a balance. Yes, we want effective and efficient businesses, but we need to balance it with overall benefits to society and that’s not happening in America.
Should keep this in mind next time a corp asks for a bailout, taxbreaks, or has major court case against them. Then it suddenly becomes all about understanding their situation and protecting valuable business
Capitalism for mee but not for thee.
https://www.youtube.com/watch?v=r0mO6UY6uTg
The middle ground that sundar took is weird
I really don’t get the purpose of such a small layoff. Kills employee morale and doesn’t move the needle on costs
Possibly just one of layoff waves.
This would be a Show HN only when billionaire investor Chirstopher Hohn [0] himself posts this. If not, this perhaps is a Tell HN.
[0] https://archive.is/8oghg
Source?
https://www.bea.gov/help/glossary/recession
Exactly. There is no source for the unsubstantiated 'three successive quarters' claim.
> though the official determination in the US is made by the NBER
I would not wait for an entity to determine and tell us if it is too late. Hence why businesses are preparing now, even when they should have done in November 2021.
And of course, I am not saying this in hindsight either, since the warning signs were there in [0] and finally when it happened [1].
[0] https://news.ycombinator.com/item?id=29508238
[1] https://news.ycombinator.com/item?id=33185591
Google desperately needs to find another money printer, and ostensibly they staffed up to help them do it. That hasn’t changed, and Google‘s workload won’t drop noticeably in a recession outside of a few departments.
And even in the those departments, they have so much still growing cash on hand, that they’d probably be better off to weather the storm the lay off only to rehire in a year.
There's also an argument that big tech keeping a bunch of people on payroll when they don't need to slows down overall growth in the industry as it makes it harder for startups to find talent.
Is the management of google so incompetent they cannot find a profitable application to a large part of their workforce?
https://en.m.wikipedia.org/wiki/The_Children%27s_Investment_...
Instead of suing, unionize and take a bit of the power we all ceded to the hedge fund managers back. It won't make things perfect, but at least you'll have federal protections and Weingarten rights and the like and the ability to push back and have the tiniest bit of power in your work place.
This man had the highest salary of anyone in the UK.
https://www.theguardian.com/business/2021/mar/05/the-very-pr...
But no, it's not his salary, it's dividends.
Unless he isn’t resident in the Uk. Which I don’t know.
He's our Prime Minister's old boss as well. Rishi Sunak used to work for TCI[1].
[1] https://www.theguardian.com/politics/2020/mar/08/rishi-sunak...
They are also not counted for NI contributions as far as I can tell.
Admittedly, the difference isn't as much as I thought.
It's not moral to avoid taxes while the rest of the people pay taxes and you use public services.
If the rich lobbied to abolish all taxes so it was fair, that's fine. But that's not the case. They lobby to create laws that help them avoid tax whilst making other people pay tax. Because at the end of the day, it's in their best interest for the government to function, just not on their dime.
I find it funny that there are economists who still use the argument of class warfare for wealth taxation, indeed we're living a class warfare, but now we know that it's the working class that's being assaulted.
Google pays up to 24 months of compensation in the form of a severance package includes salary, vacation pay, bonuses and accelerated GSU vesting to laid off employees.
The minimum compensation for a laid off employee at Google in the US:
"We’ll pay employees during the full notification period (minimum 60 days).
We’ll also offer a severance package starting at 16 weeks salary plus two weeks for every additional year at Google, and accelerate at least 16 weeks of GSU vesting.
We’ll pay 2022 bonuses and remaining vacation time.
We’ll be offering 6 months of healthcare, job placement services, and immigration support for those affected.
Outside the US, we’ll support employees in line with local practices. "
After layoffs, it's hard to get comparable high compensation offers at other companies.
Let's say the average salary of the 12k people they just fired was $300000. That's 3.6bn a year. Last time I checked Alphabet were burning ~180bn a year. I'm not saying 3.6bn is pocket change, but how is such a small % supposed to make a difference? For comparison, they were fined ~4bn in Europe recently.
That is, demonstrating the business was suboptimal? This is awarding incompetent.
in a boom market you optimize for growth: spend some more to be ready to take on the next big thing.
with a looming recession you optimize differently.
basically they are showing they are prioritizing according to changing climate
Maybe it's just doing what investors want, or using that as an excuse to trim some fat. But when you're profitable I'm not sure it actually makes sense to slow down just because the economy has.
It's terrible for the people laid off, but from a company standpoint that falls within normal fluctuation range.
I am not saying that is the case here, but reducing a small percentage of cost could matter if your margin is small. And in the case of those big corps, you can think of them as multiple companies internally, it’s likely they are doing layoff on departments/ divisions that have thin margin or unprofitable (ie. if you are in ads, very few were probably laid off)
This isn’t finance, just a rent seeking guppy casually trying to move the Overton window on 20,000 families.
It's been a continuing meme on hacker news for the last decade, that Google/alphabet hoover up all the talent in the market and pay them "f*ck you money" with golden handcuff stock vesting schedules, in order to keep them off the job market and out of competitor's hands. that's been the understanding of the situation for 10 years.
Alphabet has hoovered up some 180+ small businesses that threaten their monopolies over the last decade, only to throw away all the IP and bench the employees, just to keep their markets intact.
Those are things to be upset about, and much more serious and manipulative business practices. Don't be upset that an investor has just pointed out Alphabet's bullshit and wants them to course correct, now that the free money has dried up, and you can no longer afford to feed an army of useless rest'n'vest employees.
And the Overton window has absolutely nothing to do with this conversation.
Sure you have two extra SREs you don't "need", and your HR department might be slightly overstaffed. But then one critical employee gets cancer and is off work for 6 months, and another employee has to go on maternity leave, and you don't have any extra employees in that department anymore. Hope you didn't fire your bloat!
So you beleieve twitter can maintain it's market share for prolonged period of time with zero improvement? That means it is facing zero competition?
Do you believe free market has failed?
Have changed the algorithms they used to drive engagement, serve you most interrsting tweets, make sure you are angry and depressed?
What do you think about the system they built to manage political slant, nudity, hatespeech and racism?
Or have youjust looked at their UI, and decided there are no new buttons and thus no worl was done?
These companies are generally valued as they are on the expectation of future growth. If Google said “yeah, we’re just going to keep everything as it is, forever, on a skeleton crew”, its investors would _freak out_, and rightly so.
Keeping a well designed website running isn't a major investment. Evolving a product though is.
I think the jury is out whether Twitter is going to continue to being a going concern. It could very well a major success.
But the fact that it didn't just crash and burn isn't that surprising.
Only for people who don't know how software works.
No, it is not. Twitter had more down times in the last weeks than ever before. Regularly the timeline is not loading and since a few days the viewer count is broken.
I'm referring to the recent fine applied to Facebook. The ruling is long, but TL;DR would be as follows: It will become impossible to pay with privacy in the EU. My crystal ball is as good as yours, but I guess this will significantly squeeze AdTech. I wouldn't be surprised if AdTech revenue, valuation and salaries drops to whatever "good" IT companies make these days.
https://www.tcifund.com/files/corporateengageement/alphabet/...
We should decide whether we like free market capitalism or not. What this guy is doing is very much the core of free market capitalism. He's also not doing something inhumane - it's not about funding new sweatshops or something, it's about not paying extremely high salaries to people if there's no need.
I know we're mostly well-paid tech workers here on HN, and I think we're all a bit scared that power balance might change a bit. I get that - but it doesn't make this action that despicable in my opinion. He's just trying to make money, and a public letter to call our the management is just so much better than eg. releasing self-driving cars that cause accidents or even hyping up worthless "currencies" that'll make less informed and vulnerable people poor.
Nothing should be treated as absolute. The man considered as one of the fathers of free market capitalism, Adam Smith, directly appeals to humanity and sympathy in his other popular book, The Theory of Moral Sentiments. Yet for some it's like, either we have full on free market, with child labour, capital having all the power and all, or a command economy.
How about a middle ground with a free* market with regulations restricting the worst abuses of the greedy human nature? That's what already exists btw, it just needs more tuning. With more regulations to stop newly found abuses - today it's not child labour, it's pollution of all sorts, or disregard for (near-)slave labour, or optimising for short term profits at any cost.
Even with the economic downturn, a lot of the companies that did these layoffs still were making massive profits.
Maybe these companies need an organized counterweight to the activist investors in the form of a union.
There is absolutely no accountability today. Is it not the CEO at fault if the company made a wrong decision? If he gets to reap the benefits his employees make which results in him getting obscene compensation, is it then not logical to also get a pay reduction if employees get fired.
I have a feeling these CEOs would be a lot less willing to do firings on a whim, if by firing 20k people they lost 30% of their compensation.
The older I get, the more I realize how much Nassim Taleb is right. All of the points made in his book are valid and are still standing the test of time. There is no Skin in The Game today, hedgies and C-execs just jump ship when it is time to face your consequences. There is a big difference between being a Founder and being a CEO. The former actually deserves some respect.
Interesting argument for a purported long-term investor.
The funny thing is his whole investment in google is just a tiny tiny fraction
but still big enough to get the CEO on the phone.
I don’t give a rats about Google’s profitability though. Even if Google’s engineering ranks are filled with incredibly privileged highly paid people, I’m all for them sucking the company dry if it perturbs people like this investor.
I’ve also got the privilege of nobody caring what I think. If there were an iota of a chance that me writing this comment changed the head count at Google, I’d keep my mouth shut.
This guy can suck a lemon.
Personally, I'd argue that naked indifference represents a wholesale abandonment of the good (cooperate/cooperate) Nash equilibrium for the bad (defect/defect) one, and rationally society should punish those advocating for this phase change of society at any level, since it represents an overall loss of productivity and profitability at a societal level. Andor (great show, btw) points out that seeds of rebellion are constantly forming in tyrannies, but the converse is also true, that the seeds of tyranny are constantly forming in liberal societies. This seems like such a seed, and it's worth asking what mechanisms are in place to undermine such seeds before they have a chance to grow into trends, into movements, and into the world in which our children find themselves. How about shame, guilt, reputation? Communal responsibility is always the first casualty of income inequality, which leads to a positive feedback loop of less responsibility, more wealth inequality.
In summary, Christopher Hohn should be ashamed of himself, people should spit on him in the street[1] and in his food, he should be sneered at and verbally abused by everyone in his community for being a greedy, inhuman monster that would destroy 100k lives for his spreadsheet. That this type of recourse is generally not available is a failure mode of our society that should be addressed through enacting any and all policy changes until this type of recourse is online once again. If this mechanism for basic humanistic correction isn't possible or practical, then Christopher Hohn and others like him should be taxed into oblivion.
1 - He looks like this: https://duckduckgo.com/?t=ffab&q=christopher+hohn&iax=images...
That's $80,000 for each of those 100,000 people. For one person.
Sickening.
Outside of Silicon Valley $300K/year median for rank-and-file employees is a number that just makes people’s jaw drop. Is that the actual median compensation?
It wouldn't surprise me at all to also find letters from these assholes to Silicon Valley city councils complaining about how the councils insisting on spending valuable real estate for affordable housing is hurting the region, because that's poor use of capital and they should instead build office buildings for tech companies.