Overall CEOs work for the board and most of these CEOs doing layoffs are doing exactly whats expected of them - and the market is immediately responding favorably.
If you want to argue for a particular CEO not executing on grand strategy beyond the layoffs that's completely valid.
If you just want to be mad at the persons responsible the CEOs are the intentional scapegoats, the root cause is above them.
This is ultimately why I support board-level employee representation and why I think it's a good idea for employees to collectively own a non-trival amount of corporate stock. Providing jobs to generate stability in society has become a critical role of business, and the public at large is coming to expect more from publicly traded corporations than just quarterly profits. Wall Street shouldn't be the only voice in corporate governance.
Board-level employee representation was won in Germany with nothing but a couple of world wars and a Russian revolution. So tell me, how exactly does one go about "supporting" it?
Without the threat of the Soviet Union or even a semblance of an organized labor movement, there is nothing meaningful to support.
I recall reading an article that for some companies in germany, the board-level employee representative have successfully negotiated during the GFC, to not have layoffs, but instead collectively took a pay cut and survive through the difficulties. The company got to retain the talents and save on the costs of retraining etc.
Having a dissenting voice can lead to better ideas. However, if the intention is to prevent employees from being fired even when it is in the best interest of the shareholders, then this employee representation is only going to decrease the shareholder value, and ultimately the profitability of the company.
> collectively own a non-trival amount of corporate stock.
how do these stock get granted? Because if the employees themselves pay for the equity, then they're part owners. If they don't actually pay, then they'd be usurping control in a way that is not fair to those paying the equity.
Personally as an employee I’d rather have a layoff than a compensation cut. Even if I’m affected I’ll take my chances finding a different job at high compensation.
I am pretty sure most non tech people around me would take the pay cut over the risk of becoming unemployed for an uncertain amount of time, having to find a new job, maybe moving to a different place etc….
Are we talking standard layoff of 1-2 weeks of salary pay per year worked at a company or are we talking about the insane packages only FAANGs give? Because that goes without saying.
You're not in the United States, I presume, or have never been on work visa!
In the States most important benefits (like healthcare) are tied to your employer, no job means no health insurance. If you're out of job on work visa, then you either find a new job within (about) 2 weeks to sponsor new work visa or leave the country, abandoning everything you might have built.
Unfortunately being unemployed, no matter your pay, is not an option for lot of people.
It's not really the end of the world if shareholders lose a little value in order to enrich the employees. Cuts down on the chance of socialist revolution.
> If they don't actually pay, then they'd be usurping control in a way that is not fair to those paying the equity.
From a capitalist point of view. Socialists would argue that shareholders are already usurping the labor of the employees by not paying their fair value.
> labor of the employees by not paying their fair value
but then you have to question the idea of what fair value is. The market rate is a pretty fair value to use. The argument that the employee's wages are always less than the full market value of the goods/services they produce, thus they must not be paid their fair share, is not correct - what happened to the capital that the employees uses to produce their output (the guaranteed wages are also considered capital in this case)?
I'm not actually a socialist, so I have no passion to argue this, but you could make arguments about how the labor markets are constrained by the current rules that favor capital (both in legal and tax treatment), so we don't actually know the fair value of an individual's labor in most markets. Also corporate consolidation has suppressed wages and limited avenues for entrepreneurship, so that further reduces the paths to prosperity for most people. Someone would probably also point out that employee wages are hardly guaranteed given that 49 states are at-will, and Montana has fewer people than the city I live in; virtually all Americans can be laid off tomorrow for any reason other than race or other protected status (and even then, we all know there are ways around those laws).
Again, I think capital should get profit in exchange for risk taking and organization, but there is no moral argument that shareholders should continue to rake in record profits while working Americans continue to get squeezed tighter every year. At what point does it become rent?
A government is only as good as it's opposition. Having a strong range of voices and differing viewpoints on the board is a good thing. Employee representation is one of those range of voices
A guy who mows your lawn a few times is not an employee. You can argue for decades over what precise threshold makes you an employee, but in general employees are like groundskeepers who are with you long term. Yes, it is good to involve groundskeepers in big decisions that affect them and their work. If you want to sell the mower for cash, the groundskeeper says “well if you do that I can’t cut the lawn and everything will look terrible and you will then fire me for failing to keep the lawn looking nice” then you should listen. A lot of discussion of this only happens at the end of that cycle, when the CEOs start firing the groundskeepers for failing to keep the lawn etc., so it seems futile to add them to the conversation at the exact point when you know what they’re going to say (“you shouldn’t fire us, you should buy a new mower so we can do our job”). The trick is to do it earlier and incorporate the knowledge embedded in your workforce into your decision making. If you have a hundred people working for you who can see and experience the problems you have first hand, you should find a way for their brainpower not to go to waste.
Giving employees regular input into big decisions is a good idea in the long term. Giving them stock is a way to motivate them to be less inward-looking and think about the company as a whole, and a convenient mechanism to formalise and fine-tune the power balance. If you have a bunch of stock (initially 100%), you can think of the voting power it entails as a resource that you can spend on people who are going to vote well with good information and the right kind of interest in making the company sustainable. Giving it to employees is a good way to spend that resource. They know more than regular shareholders and are empowered to change the course of the company from within.
If you can’t bring yourself to give away any stock due to unstoppable greed and a belief that employees are dumb lawn mower operators who would never know what’s good for them, then basically… good luck. There is a reason so many law firms operate as a partnership to buy into, so many investment firms give out units of a trust, so many startups and megacorps alike give out equity (usually as options). Of those, it’s usually only law firms that are giving out voting power. All people are saying here is that we should not shy away from giving out voting power as well as the economic interest that this practice is usually restricted to.
Not necessarily disagreeing, leadership should certainly try to get feedback from those on the lines, but from everything I’ve heard, law firms are intensely political, more so than your average corporation. I’d be curious to hear more about how it plays out in German companies, but it seems like distributing power might broaden those power struggles and might draw away from the ability of the company to focus and adjust quickly. There’s a reason that in wartime, the Roman Republic would (temporarily) become a dictatorship by handing power to the Consuls. Companies that don’t have market dominance are essentially in a state of war and need the ability to be nimble, including firing large portions of their staff to reallocate their resources when needed, it’s only the sleepy giants with heavily entrenched power that can afford to relax and focus on spreading the spoils of rent seeking to all interested parties, and even they can only do it for so long until a disruptor comes and tries to break them, somehow.
I don’t think we should seek to require that employment be more stable, because down that route lies moribund companies and an ossified economy, and at some point, that can no longer sustain the standard of living that Westerners are accustomed to, because companies in places that don’t have that will eat their lunch. I think we should just seek to make the penalties of not being employed less severe, with much improved social safety nets. Let people continue to compete hard, let them continue to associate and dissociate freely, but don’t let the penalty for dissociation be financial ruin for employees. If we achieve that, we’ll likely make the economy more dynamic, as risk taking is no longer so personally risky - it would give everyone the ability to operate from a place of security and rationality rather than fear and anxiety (from “a position of fuck you”, if you’ve seen that clip from The Gambler) and do what they should do rather than just trying to tread water.
My answer to that is basically that these are the same things people say about autocracies vs democracies and it doesn’t really play out that way in practice. The argument goes that autocracies have a big advantage in agility through top down control. But somehow when you mobilise them for wars, democracies are much better at it. Somehow they keep winning, but only when the citizens agree with the aims of leadership. The huge information flow in an open society producing better analysis and better technology, and the enablement of distributed effort through distributed power, amounts to a better machine. Even if democracies have a tendency to become more centralised in wartime, because to some extent there is an optimal balance for each scenario like you say. But the underlying forces of democracy stick around, and leaders still act in a way that’s constrained by it lest they get thrown out. Modern democratic wartime politics is not much like the Consuls at all. Back to companies, if you can find a goal that your employees support, then they will similarly be a better machine at working towards that goal.
If your response to challenges as a company is to shut out your employees and tell them to obey, you are missing out on this machine’s power. The only reason you would want to miss out on that power is if you had no other choice, because you were unable to frame the challenge in a way the employees can respond positively to. Democracies have a way of correcting that (among other things), which is called getting voted out; companies don’t by default, so at best you’re usually running a shitty version of democracy and yeah, bad democracies sometimes perform pretty poorly.
Thanks for the well thought-out response. Good point, if you can get people to feel real ownership of the company, that’s extremely powerful (I’ve experienced that in my own small company, but I don’t think I’ve seen it in a large company, maybe somewhat at Apple under Jobs).
I think my main argument is to not mandate structure with law, I’ve seen a number of people calling for that. I think that if we strengthened social safety nets, this sort of thing would become more common, as people became more free to leave workplaces they didn’t feel invested in, and more companies would try to foster it to attract employees.
If it’s a better strategy then companies that do adopt it will out-compete those that don’t. Social safety nets are a fine idea generally but I don’t think they would specifically encourage this practice. You don’t really want people feeling free to leave the workforce entirely. (This is an unpopular conclusion of capitalism but if nobody has to work then nothing happens and then nobody gets to eat.) The better structure is for people to be able to move to better places that make them feel empowered and rewarded etc. Safety nets are useful in that people can try things and fail, which is another desirable quality in a society, but I don’t think you can rely on them to make employers improve their offerings.
A pretty huge issue in modern capitalist economies is that people are locked into underpaid jobs with no prospects and no investment in their future other than to hold on for dear life. That’s a massive waste of our potential and a terrible experience for those workers. (And because failing these people is part of the complex of interconnected root causes that lead to anti-democratic sentiment, it is an existential problem.) You want companies to compete to use people better than that, and sharing in the rewards and the decision-making makes for a much better plight for a worker at the lower end of the pay scale. Heck, there are companies today that pay everyone the same salary, determined by the company’s profit divided by N. Their people post on HN sometimes.
The great thing about the free market in America is you can create a company and run it as you please. If you're more successful, other corporations will copy it.
Small error: in the Roman Republic, the dictatorship took power away from the consuls (with short term limits - normally 6 months), who were the normal leadership. And one of the things that republican dictators prided themselves on, was the speed at which they resolved the urgent issues and handed power back to the consuls, often in weeks if not days.
Of course, this all went to pot at the end of the Republic when the rival warlords from Sulla through to Octavian saw the dictatorship as a means of taking control of Rome, so had extended periods of dictatorship "the problems are so vast I need to be dictator for 10 years".
Whoops, you're right, thanks! It's been a while since I listened through Mike Duncan's The History of Rome :-) Looks like the consuls nominated a dictator. Was the dictator ever a self-nominated consul?
I keep looking at this and the original comment and it saddens me. It took about 2 minutes for WalterBright to type out his original (IMO awful) analogy then disappear from the conversation. This comment however was carefully written and thoughtfully provides a thorough rebuttal of the analogy while also contributing a lot to the discussion raised by the original piece. But it's not going to get the attention it deserves and doesn't look like it'll get a response from Walter :-/
Apologies for adding a slightly empty comment but clicking the little "upvote" button didn't feel like it was enough.
Don’t worry, I am used to it. When the Walters of the world run off, that’s fine, I have people like you to get through to. Thanks for your kind words.
This is just par for the course on HN. Only engage with the weakest responses to your comment. Do not engage with anything providing a decent rebuttal. Makes your thoughts look more solid and the “opposition” look worse as the thread develops.
Nowhere did I say that management should not gather input from employees. Nowhere did I say that it was a bad idea to give employees stock.
I said that being paid for a job does not imply ownership.
> If you can’t bring yourself to give away any stock due to unstoppable greed and a belief that employees are dumb lawn mower operators who would never know what’s good for them
That rude comment doesn't deserve a reply, but I wrote one anyway.
I suppose I did speak a bit accusatively with the word “you” instead of impersonally, sorry, but this is how some people think of their employees, it’s an attitude you almost outright expressed with your analogy, and it was worth addressing. Obviously what you said is the legal position, nobody was saying otherwise. But it could imply ownership if you wanted. That’s a plausible change you could make to either the law or company structures. It’s something that can change over time simply by publishing information on company regulators’ websites that people look at when they start companies, if you want. Are you open to that kind of change? That’s the question, and you didn’t seem very open to it at all. Some people, especially labour activists who have been trying to give workers more rights since forever, would probably respond positively. You don’t have to have an answer.
The parent I replied to wanted to use the government to force the issue.
You and anybody else are free to set up and run a corporation the way you please. If it works better, others will copy it. You can even set up a collective, or a commune, or a workers' cooperative. It's not illegal in the US.
Whether I am open to your vision of how a company should operate is irrelevant. In a free market, you get to choose how your company will operate. And the best structure will win.
Company owners are not so stupid they will turn down a corporate structure that will be more profitable. Tech companies are famous for handing out stock options like popcorn. Back when I ran Zortech, which was privately held, we gave each employee a cut of the monthly sales.
When I worked at Boeing, I bought Boeing stock out of my own pocket. It paid off handsomely.
We also demanded that employees could wear whatever they wanted in the office, but when meeting a customer, they had to wear a suit. This caused some grumbling, which we dug into, and found they were simply reluctant to buy a suit. So we paid for their suits.
And ... they loved them! They were really proud of their suits (for many it was their very first one) and enjoyed visiting customers with them on. Our customers liked it, too, and would remark that no other tech company representative would wear one. They took it as a mark of respect for the customers, as tech representatives usually were slobs. It was a big win for us, and a fun way to differentiate us from our competitors.
The conventional wisdom is one's dress doesn't matter, but in my experience it makes a big difference.
Corporations are creatures of the state; they are legal fictions with no existence outside law. Why do you think they have boards? Because the state requires them to.
If the state deems it good policy for corporations (say, above $x,000 capitalization or y employees) to have employee representation on their boards, the state is well within its rights to introduce this condition.
The state should also perhaps consult the public as well, what with us all living in "democracies" and all that other stuff you read in marketing materials.
All real world data shows that won't work well. Should we go by data or feels?
Silicon Valley pays the highest and employs the most number of programmers and has done so with employees on boards. Other places and countries with board-level employee representation seem to do worse.
What's the logical argument that board-level employee representation won't employee pay or total employment?
The CEO that hired a ton of people last month and is laying them off this month is demonstrating that they're unable to plan even a few months ahead for a likely scenario. The root cause here is not reading the writing on the wall, not planning properly for the economic environment, and possibly keeping people around that should have been let go a long time ago. They're also setting the business to lag when the economy recovers.
Day to day moves in the market happen for many reasons. I doubt that over any sort of reasonable term (let's say a few quarters) the companies doing massive layoffs are going to outperform the companies that are not.
How is it impressive and worth multi-million dollar salaries to lay off people when your revenue is down?
How is it amazing to do what the board wants all the time?
What about mistakes and past decisions? If you make a decision, it turns out to be wrong, you aren't exceptional to then fix it. If I am making a customers order at McDonalds, get it wrong, then redo it that's certainly nice but how is that more than what anyone else would do?
If a companies revenue is down the CEO's decisions should be analzyed to see if his actions contributed to it and perhaps lose his job if so.
>>>If a companies revenue is down the CEO's decisions should be analzyed to see if his actions contributed to it and perhaps lose his job if so.
Agree. However, will you also apply the same logic to the current administration of your government who created the economic conditions which set the CEOs up to fail?
You did not have to have a degree in economics to see the effects of shutting down an entire countries economy for over a year would eventually come back to bite us in the arse. The Tech crowd predominately leans left and a large majority supported these measures and even heralded them at the time.
This is now the fallout of those decisions and we are to live with the result of our convictions.
Saying you want someone else to take the fall is just asking to have your cake and eat it too, which I do not support at all.
1. There is a lot more influencing the current economic climate than shutdowns.
2. The most severe shutdowns were in the early stages of the pandemic, under President Trump and a Republican Senate. Not sure why you are laying the blame entirely at the feet of those who “lean left”.
3. During those same shutdowns, the companies laying people off today went on hiring sprees. That wasn’t the decision of the employees being hired, it was the decision of management at the company. So even if it is true that this economy was inevitable due to the pandemic, and that anyone should have been able to see it, then the responsibility lies with those who chose not to act accordingly but instead overhire, which again, is management.
In the US and most of europe it did happen, no matter how much you say no with your hands over your eyes.
Schools, Restaurants, department stores, and just about anything that wasnt a pharmacy, grocery store, or gas station was forced closed. Borders with countries allies and foes alike were closed. In some 1st world countries like Germany this went on for MORE than a year.
Then you had a partial shutdown of the economy with vaccine requirements that shut out the economy for millions who did not have the vaccine yet or had no plans to get the vaccine.
You supported this. I will bring it up to you again, and again, and again because what you supported was wrong.
I will not stop telling the people that you and whoever supported these horrible measures are part of the reason we are in the situation. No matter how much you say No No No. You are partly responsible.
>> The CEO that hired a ton of people last month and is laying them off this month is demonstrating that they're unable to plan even a few months ahead for a likely scenario.
>This, so much this.
It might appear to be a lack of planning, but another way to look at it, is these companies are running at full throttle in a vehicle sense, and the CEO and others have taken their foot off the throttle to negotiate a bend.
>How is it amazing to do what the board wants all the time?
I've seen stats delivered to management and the board, and I've seen the board tell management to reverse their actions within minutes of those stats being delivered at shortly after 6am.
Keeping a currently work-to-rule, minimum-productivity workforce happy when it affects the business in other ways is important to the board.
> If a companies revenue is down the CEO's decisions should be analzyed to see if his actions contributed to it and perhaps lose his job if so.
Look at the UK Prime Minister situation, 3 PM's in a year. Its an interesting lesson for the whole world if you consider the British PM to be a CEO of a country.
Look for the parallels and whose Authority do you trust?
Do you find pieces of paper from a University to be an interesting Authority object? Do you find money to be an interesting Authority object?
Do you find the internet, regardless of website to be an intelligent training exercise? Do you find life and society is one giant over populated prison?
No one knows the right number of people to have at a given company and much of it has to do with cost of capital. In 2020 capital was extremely cheap, so cheap that you could hire very inefficient employees and still have upside. No one predicted that, and it was very much a result of the whims of central bankers.
The companies of CEOs who were able to higher employees quickly and capitalize benefitted.
Now capital is much more expensive and companies cannot afford some percentage of those inefficient employees. CEOs that act quickly on this and cut staff typically end up protecting more company revenue.
CEO decisions also are absolutely analyzed by the board and CEOs are typically fired based on performance relative to the market as a whole.
"In 2020 capital was extremely cheap, so cheap that you could hire very inefficient employees and still have upside. No one predicted that"
No one could have predicted that you could hire people you don't need or are ""inefficient"" and a company could still be profitable?
Again, is this a complex notion? Is this like some revelation that could only be understood after a certain date? I mean I think not. It's such a simplistic concept
Also you keep claiming the people hired were inefficient and the people fired were inefficient. How do you know that? Like what is inefficient? It bothers me how you said it twice and implied everyone was inefficient (of those fired and hired)
Those inefficient people can still be profitable when interest rates are near zero. It's also not the people, more often than not it is the product they are working on. Some products can only exist when interest rates are low and money is plentiful. A company might have an NFT building division for example that brings in tons of revenue during times of near-zero rates. What do you do with those employees that specialize in designing NFTs when interest rates increase and the NFT market no longer exists?
And if you can predict interest rates, then no need to be a CEO, you can make billions just by placing a few trades per year.
Exactly. You get paid $280 million precisely because you're supposed to see past temporary economic conditions. If a CEO can't understand Econ 101 for the millions he gets paid, then it's time for him to go. A fourth-grader can read a spreadsheet and see temporary revenues that will, based on that alone, provide the financial ability to hire more people.
You don't pay an executive millions because he has fourth-grade economic understanding.
The wiki on this concept. It's real easy to ask for and get a raise as a CEO at company A when the people approving your raise also happen to be people whose raise youg et to approve at company B
1. Boards are mostly made up of (drum roll please)... other CEOs. There is a kind of class solidarity making sure that overall CEO pay only goes up and up and well beyond any kind of inflation; and
2. The real issue with many companies having poor financial performance has nothing to do with "bloat" or "over-hiring" and everything to do with poor leadership. Case in point: the tens of billions Meta has sunk into the Metaverse despite there being no product-market fit, no business model and no end to spending in sight.
But it's employees who are bearing the brutn of these poor decisions, which is extra ironic when you remember that those employees have no power over those decisions.
And notice...all management below the CEO are expected to inherit the stockholder priority.
That is to say, management (for which I have been) are the foot soldiers of the capital class. This is done by incentivizing management with larger and larger percentages of compensation based on stock, thus aligning management's incentives with investors rather than with non-management labor.
The root cause really is that Silicon Valley does't hire or fire CEOs, Wall Street does!
Its funny, and indicative, that even "Business Insider" doesn't recognize the difference.
FWIW, Silicon Valley "hires and fires" founders. Sometimes they also happen to be good CEOs for Wall Street, until they are not (involuntarily for performance reasons, or voluntarily because of age or enthusiasm).
Aside from executive error the root cause is if increasing or maintaining higher levels of staffing increased or maintained marginal profit then staffing would not be reduced.
Put more simply if these people were making the company money it wouldn't lay them if managers are rational.
>Tech companies are generally valued much higher than their profits
In the long run tech companies will be valued just like normal companies. Innovation is slowing down. Expect a reduction in tech salary rates relative to more traditional engineering.
Three things propping up tech salaries over the past decade are loose money policy, the advertising bubble, and the rapid turn over hardware and software in the market place.
There are few fundamentally new things of value in 2022 vs 2012. It just costs more to pay programmers to make the same thing and takes more computing horsepower. In the long run this is unsustainable.
For example GB of RAM to run a web browser or OS. I could watch videos online in 2012. I can in 2022 too.
This article is more ideologically driven than a realistic examination of these businesses.
Also, saying Google was surpassed by ChatGPT is equivalent to saying something else reliable than Wikipedia is beating them. That's nowhere near realistic.
The cost of finding good engineers is too high, I used to run a recruiting agency, it takes months to find a candidate who fits the company both from hard and soft skills perspective. So I really don’t understand why companies fire engineers. They should optimize managerial positions instead
Shortage of devs is (was?) a very popular talking point, but is it really true? If each developer was so unique, special and valuable, would companies be laying them off now?
If the developers were so hard to find, wouldn't companies adjust their expectations and work with who they can find, instead of having them play Leetcode and other crazy games that have very little to do with day to day realities of work at the company?
When there's a famine, people don't complain that their T-bone steak is medium well done, they eat what little food they can find.
I don’t disagree with your line of thought, but found it interesting the the OP specifically mentioned cost but not scarcity. Or rather scarcity of candidates that meet an employers criteria—criteria that may be unrealistic or out of touch.
> Shortage of devs is (was?) a very popular talking point, but is it really true? If each developer was so unique, special and valuable, would companies be laying them off now?
When companies were executing on projects that required workers and couldn’t find them, yes there was a shortage. When companies cancelled several projects and had extra headcount, they let workers go. I suspect in the not so distance future the very same companies laying off workers now will need more of them, and that will be even more difficult than today.
It seems to take months for hire devs, because there are now months of screens, tests, interview rounds, panels, etc.
I suspect plenty of devs just can't be bothered with it; they either stay where they are, jump to somewhere they already have an 'in' by personal recommendation, go full time time on a side project or freelance, and maybe just play the interviews for practice.
> it takes months to find a candidate who fits the company both from hard and soft skills perspective.
Is it really that bad or companies just mindlessly parroting FAANG interview process? No, you don't really need 5-stage leetcode-style interview to hire your Billy-the-junior-React-guy.
Hiring junior devs is not a problem, everybody understands that they can deliver some serious stuff in 2-3 years. My experience was with senior/lead developers. There are so many things should match to hire such people. Some examples. A one guy refused the offer because he did not want to relocate, another guy was turned down because of his political views (due to war), most people could not pass technical interview. The # of candidates topped 100+ for this position.
That's actually how bad other companies have bungled this. Intel did a better job than most everyone. They gave everyone several months notice of layoffs, prioritized internal candidates for new roles, gave a decent severance package and leaders are actually taking a pay hit.
It's not perfect, but it doesn't make Google look all that great. Google dumped tons of engineers and has plenty of engineering roles currently open, they didn't even bother trying to move folks around.
Generally yes, in this mass layoff access was just removed. I don't think Google's 'culture' will ever be the same. Intel folks have known they were getting laid off for months now. Which is helpful whether they're choosing to stay or leave.
From a LinkedIn post that I assume this author sourced for their opinion:
Things Intel did this time around, that weren't done last time, nor by Google/MSFT:
* Advance notice it was coming to all employees.
* The goal was budget reduce, so large business units had some ability to reduce (not eliminate) layoffs with extreme cost-cutting measures. Point is, there was a clear stated goal besides elimination of jobs.
* Per public sources, the CEO is taking a 25% pay cut, leadership team 15%, etc, with the goal of reducing that number of people laid off.
* Some Intel business groups gave people a chance to 'sign up' for voluntary separation.
* Personally told by my manager I was impacted.
* 1-2 weeks to wrap up my work.
* Then 9 weeks(!!!) paid employee of Intel for the sole purpose of finding a new opportunity inside or outside Intel.
This is all on top of the severance, which is the lone similarity with the other big tech layoffs.
> Tech CEOs screwed up: Now laid-off employees are paying the price
tech ceo's didn't screw up. the current economic turmoil has been caused by overstimulus in the context of the covid lockdown and related supply chain knock-on effects, and subsequent over-easing of the money supply. Everybody knows this already. And the stock market mini-bubble preceding the recent dip should have been obvious to everybody (me included), because why with a pandemic lockdown would we all think that it made sense for the stock market to soar so high?
They, or the shareholders driving exec policy, screwed up in buying into this abnormal environment rather than considering that eventually there might be a massive pullback from the massive money-printing.
nothing in your comment singles out "tech CEOs" which was the thesis. I'll single them out here: in good times and in bad, tech has a beta of about 2, so we expect techs to rise more and drop more.
I'm not singling out CEOs but I'm just saying someone at the top screwed up in overestimating the market. At the very least, like this comment suggests, the finance guys.
the market can be misestimated without any screw up. it's hard not to not screw up, the information you need is too diffuse. How will the Apple CEO predict how many new cars will be sold next year when the auto CEOs don't know? Apple needs to know because how many new cars will be sold is a really indicator of how much working people have as disposable income, and especially autoworkers, and if you can afford a new car, you'll probably upgrade your cellphone. (and so on for other sectors, agriculture, insurance, etc.)
It's amazing how well the world economy works most of the time given that everybody is flying by the seat of their pants.
if one tech CEO screws up (Zuckerberg with Meta?) you can see it. But when the whole sector screws up it's a pretty good sign something macro is taking place.
Not even close to Beta 2.0, more like 1.0, i.e. just copying market trends. Moreover, from all those companies, only Apple, "the worst" of them beta-wise, didn't have layoffs.
No it hasn’t. The current economic turmoil has been caused by companies using the stimulus as something they can blame inflation on when they raise prices even though they’re actually increasing their margins. You can trivially see this by looking at the financial reports of public companies that have raised their prices: If they were raising prices to cover increased costs, their margins wouldn’t change; in reality, lost of companies have taken the opportunity to increase their margins.
The whole “Many Americans got an extra few grand in 2020 and that caused inflation!!!” narrative is as fake as the “Organized shoplifting is causing retailers to lose a huge amount of money!!!” fake story and the “Our cities are burned out hulks because we defunded the police!!!” fake story and the “People aren’t applying for these open jobs because they’re lazy and can get paid to sit around!!!” fake story.
Every one of these stories serves a particular purpose for which it was designed, planted, and amplified by specific groups of people with specific policy objectives.
If the effects of the stimulus were so dire how come publicly traded companies are continuing to post record profits? You need to account for this in your model if you want to be taken seriously by anyone who isn’t a Mises goldbug.
That's exactly why. If the printer didn't print ther ewouldn't be money to circulate. Maybe the businesses that are dying now would have died earlier. Maybe America shouldn't be allowed to print or else blow them up like Libya.
> No it hasn’t. The current economic turmoil has been caused by companies using the stimulus as something they can blame inflation on when they raise prices even though they’re actually increasing their margins. You can trivially see this by looking at the financial reports of public companies that have raised their prices: If they were raising prices to cover increased costs, their margins wouldn’t change; in reality, lost of companies have taken the opportunity to increase their margins.
Why do you think those greedy companies got greedy since 2020 and didn't in 2019? They were always greedy, they are just responding predictably to market conditions caused by the Fed and Congress. That's what changed, not the companies.
> Why do you think those greedy companies got greedy since 2020 and didn't in 2019?
That's a misinterpretation of the point. The companies were greedy in both years, but 2020 gave them an external thing to blame. Consumers largely accepted the "it's COVID, what can you do?" explanation.
In my city, the privatized gas/electricity utility is blaming COVID now, in 2023, for massive billing issues where folks are getting $10k bills and I'm only getting a bill every other month. It's not very plausible, but they're still using it as an excuse.
I think it's entirely possible that there's been a more severe than usual change in culture, there really does seem to be a vibe out there where ultra rich people have absolutely no shame anymore at their greed...I mean, at some point the gap has to get so staggering wide between the rich and the poor that the notion that these people have any morals has to go out the door, doesn't it?
But then 10 years ago I'd have never imagined it possible for things to ever get to this point, so what do I know.
>>>The whole “Many Americans got an extra few grand in 2020 and that caused inflation!!!” narrative is as fake as the “Organized shoplifting is causing retailers to lose a huge amount of money!!!” fake story and the “Our cities are burned out hulks because we defunded the police!!!” fake story and the “People aren’t applying for these open jobs because they’re lazy and can get paid to sit around!!!” fake story.
I cant tell if this is sarcasm or trolling.
Between PPP and the stimmy checks sent out, amassed to about 6 trillion dollars of direct stimulus during the COVID outbreak. Yes, this will have an effect on inflation. No I am not an economist but you would have to be trolling or demented to think not.
> The current economic turmoil has been caused by companies using the stimulus as something they can blame inflation on when they raise prices even though they’re actually increasing their margins.
This is not how economics works. Companies don’t need an excuse to raise prices, and margin has nothing to do with what the price point should be; margin simply sets a floor for the price, and it gets too low the business is not viable and shuts down to move the capital to another business with better margins.
Prices are increased if and only if the overall profit increases because the lost sales due to the higher cost are offset by the increased revenue from the price increase.
This is not due to any artificial excuse or fake stories. This situation can be caused for a lot of reasons, but macroeconomic situations are certainly part of it.
Imagine you sell eggs and bird flu kills a ton of chickens around the country, but you’re chickens are fine. Your comment makes it seem like you are supposed to keep selling your eggs at the same price, because your margins haven’t changed. It still costs you the same amount to raise the chickens, so raising the price is just going to increase your margins.
But if you don’t raise prices, you are just going to sell out too fast and there will be an egg shortage. The correct thing to do is to raise prices to match the supply with the demand. Yes, this means the margins will increase, but that isn’t dishonest or wrong. There is a reduced supply, it has to happen.
While I agree with the premise, what is your point?
Just accept the outrageous inequality of tech capitalism so that the chosen ones (programmers, tech people) can keep on making six and seven figures at the expense of everyone else?
Well, what do you suggest would help? You haven't really addressed if these people are right or wrong, just that they're all angry, and it's somehow not okay for a lot of people to be angry at the same time and talk about it to each other?
Agreed; there's no substance to this, and bringing up how common overhiring and layoffs have been points to these CEOs being average performers, not bottom 6%. The more interesting story would have been where are the CEOs who saw this coming, but even that's just hindsight bias.
Every single CEO layoffs letter so far:
“I take full responsibility for this decision” — proceeds to suffer ABSOLUTELY NO CONSEQUENCES while strolling merrily to the bank reserve to swim in their gold coins.
This is your daily reminder that tech capitalism is fundamentally an extreme inequality engine, and corporations do not give a damn about YOU, they never have, they never will.
The problem isn't so much the CEOs but 'the market' and our current financial system (shareholders demanding instant gratification), which treats workers as just another commoodity to be hired and fired according to the short-term market conditions.
The reason companies exist in the first place is to respond to market conditions and make profit for shareholders, not for employees and not for the public good. It's not your boss' job to take care of you or be concerned with your welfare. That's what family and community are for.
An employee is an economic input, just like land or capital or machinery. Why do you think you're entitled to not being treated like a commodity exactly? It's their money and their risk:reward profile, not yours. You don't get a vote just because you have emotions. Labor IS a commodity. Labor takes no risks when they show up to work and collect a guaranteed paycheck.
All you can do is focus on gaining competitive skills that allow you to enjoy the luxuries you think you're entitled to automatically. You're entitled to nothing.
"The reason companies exist in the first place is to respond to market conditions and make profit for shareholders"
It is not, and this attitude that profit is all that matters is exactly what's wrong with our current system, or why the current system is just wrong. Eg 'shareholder value' was only enshrined as the existential goal for companies in the early 20th c, and only really driven aggressively following the Lewis Powell collusio.. uh, memo.
Yes, companies should be profitable, to prove that they are doing something that society values, given the lack of any other realistic gauge (maybe we can invent something less clumsy and random, more elegant, in future).
But the reason for work, and therefore companies, is to provide goods and services to society, not just to 'make profit'. What does 'make profit' even mean, really? Markets, capital, profits, are all just current (flawed) methods to enable work, to decide what work should be done, to encourage invention of new valuable work, etc. The reason for the work is to feed, clothe, educate, heal, entertain ourselves.
The employee does take a risk. The risk is that it is wasting its time vs an alternative opportunity. Also in most jobs there is risk is to health to various degrees.
Working does consume one's time, energy and health.
If one is not getting the best bang for one's potential in wage terms then one is feeling the negative potential of this missed opportunity risk.
Conversely if one is getting paid more than they are worth and one is experiencing the upside of this risk. The downside is still present too...they could be laid off and find a less well paying job.
So employees absolutely take on risks by engaging in particular jobs vs. alternate opportunities.
The most valuable things any person possesses are time and health.
To the extent that the labor market is efficient and human capital is well utilized this risk is minimized.
Reed Hastings is the biggest hypocrite from Silicon Valley.
Reed recently step down from CEO position to become Netflix executive chairman. No, he should fire himself, completely quit Netflix.
In his famous Netflix culture deck slides, he said "adequate performance gets a generous severance package" (source: https://www.slideshare.net/reed2001/culture-1798664)
Last year, Netflix stock was down 39% and lost 200,000 subscribers (source: https://finance.yahoo.com/news/netflix-down-39-why-144055539...)
This is not "adequate performance" it is a TERRIBLE performance. If he applies his glorified rules to himself, he should have been let go after the release of first quarter report last year. Sure, Netflix added some subscribers since then but is it much more than "adequate performance"? Nope, don't think so.
In the hypothetical alternate universe where the CEOs hired +25% instead of +30% over 2 years and then -5% cut after, would everyone somehow be better off?
I dunno.
It's doubtful CEOs saw the end of ZIRP (the driver of this crazy growth) coming, given that nearly 0 people in the industry on this board did, etc.
The forces that lead to the "everything bubble" including overhiring, and the subsequent pop & cooling are much larger than any one CEO or even industry.
Everyone wants so malign actor to be responsible when bad things happen, but systems are more complicated than that.
Only makes sense if just one CEO/company made a “mistake”. Senseless to fire CEOs for market forces, or because they are following a trend, or whatever that is causing them to act in unison.
From other historical news on the strange fate of a group of skiers in the Ural Mountains: “In classic Soviet style, a number of officials who had little to do with the tragedy were either punished or fired, including the director of U.P.I. and the chairman of its sports club, the local Communist Party secretary, the chairmen of two workers’ unions, and a union inspector.” https://www.newyorker.com/magazine/2021/05/17/has-an-old-sov...
It would be amazing if there were a silver bullet like this that everyone could identify the root cause of companies' woes. And could be reset by flipping a switch.
But I think it's much deeper -- having worked at a couple big companies now, I realize (at least to my limited observations) that the path of a company is set by the deeply ingrained culture that has been established over many years by its founders, by its evolution, its successive leaders, and in fact, the competitive environment in which it operates. Things (good or bad) that last far beyond any one leader.
It manifests in the little incentives that people far below the CEO understand to do their jobs in a certain way, to pursue certain things and decide to drag their feet or ignore certain other things.
If you were hired at a company and worked there for years understanding that if you did <x>, you got <y>, it will be hard to change a whole workforce of that notion, especially when one individual gets beaten back in line if they stray. Even if others want to change just as much. Even if the CEO says to change. It takes years for that info to percolate. Sometimes it never does.
No, sometimes companies need to die in order to be reborn.
You're describing life under caretaker CEOs, which true to form are a self-fulfilling prophecy for mediocrity. The vast majority of large public CEOs are caretaker CEOs, and it's why working for large public companies can feel so slow and dreary.
But then you get turnaround CEOs, the ones the board hires because the company is in dire financial straits, who comes in, fires executives, sets new strategy, communicates openly and plainly across all layers of management and labor. Things can change quickly under the right leadership.
I experienced two turnaround CEOs, and they were the ones that did all the firing. One let the company bleed away headcount until it became desirable for a buyer.
For the one that let the company bleed, it was supposed to be, until the previous recession hit, and it became more of “a soft landing is better than a hard one”.
The same happens in companies led by founders. I've seen it, and lots of people at google when under larry and sergey will tell you. People under Zuckerberg at FB, Bill G at MSFT, there are stories from all these places if you talk to folks who were there.
And they were all smart guys, courageous, right incentives etc. Large organizations are complicated. The post above is right - there is no silver bullet.
I was under the impression that they were largely stepped out because they couldn't continue the business side of being executives and felt like they were letting the company down? Maybe just impressions I got regarding their departures. I kinda feel like from an outsiders perspective Google had already started to turn into not quite awesome before Larry stepped down. The only interest I have in Google these days is following their next to be cancelled project blunder, year after year.
Well they're sacking a lot of people to avoid thinking about strategy. Maybe firing CEO's is the silver bullet. A big stick incentive to remind the C suite to drive value creation rather than whatever they do now.
My only experience with turnaround managers at any level boils down to people who don’t take the time to understand how things work before making sweeping changes that they either had at previous employers or wished they had at previous employers. It never seemed to work besides by accident, and definitely seemed to have little to do with a desire or ability to improve the quality of a business.
I agree. I think when Steve Jobs returned to apple, direction was coaxed from the workforce. The memo to stay or leave. The product confusion and the "4-quadrant" idea (laptop/desktop consumer/pro)
I also remember what happened when steve jobs came back from medical leave, and lots of directionless meandering was cancelled out as someone took the rudder again.
But first you need a company in dire enough straits that a critical mass of people understand a turnaround is necessary. Otherwise, that transformational leader may fire a few people but end up undermined by the masses who just don't care.
Satya Nadella 180'd Microsoft's culture on a dime. You're right that it isn't just about specific decisions, it's about pervasive culture, but I think a given CEO is (or at least can be) the person who defines the culture
I don't think that's a fair comparison; a lot of the so-called "improved Microsoft culture" is (1) the product of the growth of greenfield orgs and acquisitions (Azure, Github, etc), and (2) a PR smokescreen. Microsoft still has a VERY substantial old guard.
> No, sometimes companies need to die in order to be reborn.
Absolutely agreed, but here's my take: Enabling failure to be more equitable either helps fix a company's problems faster, or causes the company to fail faster. These are both healthy things.
You describe corporate culture as being something that's very difficult to change. Absolutely true. If culture, to some degree, is a root problem for why a company isn't performing well, lay-offs aren't going to improve things. They're only going to make things worse. Exiting the CEO or other leadership and bringing in new leadership that can reorganize, push culture in a specific direction, increase output, etc; could help things. Change isn't easy, and many people will resist the change, but being able to view that resistance through the lens of a conversation with the people resisting rather than a broad and blind lay-off actually helps. At a high level, you can build the framework of new expectations; identify problem departments, teams, and people; help them adjust to the new normal; and at worse have that hard conversation.
But, of course, some companies are just rotten beyond repair; and changes like this would change too much and potentially disrupt the whole organization. It sucks, but its better to identify that sooner rather than later.
Saying "ah darn, well running a company is hard, if only there was a panacea for our problems ah darn!" is so fucking often used as an excuse to keep bad leadership around. No: There isn't a panacea. That does not exempt leadership from criticism!
Over 95% of all comments on HN about business come from people who have never run a non-trivial business. This is beyond obvious to anyone who has.
While I am sure it feels great to have and voice an opinion about everything, at some point, in the interest of not engaging in self-deception, one has to be honest in recognizing lack of knowledge.
Put a different way: If you have never had to fire 100 people or more, it might be a good idea to recognize you likely are not equipped to understand that reality.
This is the vibe I got reading the article as well. "I don't like CEOs and it feels bad that they make money" - then everything else is backfilled to "argue" that.
Do you realize he is the CEO of a PR firm which LinkedIn shows having only four employees, including him? This is a click-bait. Very few people are qualified to pass judgement on a company having to lay off thousands of people, much less this guy and the vast majority of those compelled to do so on HN.
Hold up now you're switching the goalposts. Your original post suggested he was just a nobody, an idealistic (lefty? poor?) non-CEO penning angry screeds motivated by envy. Now that it turns out he's actually successful in his own right, you're now suggesting he's simply not equipped to talk about this - not part of the elite, untouchable few who are allowed comment on the goings-on in Silicon Valley?
Also just a heads-up: copy-pasting the first few words of someone's comment and formatting your reply around it looks really juvenile and petty.
> Your original post suggested he was just a nobody
No, it did not. At all. My post had exactly nothing to do with the article’s author. Not one bit.
> not part of the elite, untouchable few who are allowed comment on the goings-on in Silicon Valley
Yet another misrepresentation. Please read what I actually wrote.
> looks really juvenile and petty.
That’s your interpretation. From my perspective it’s poetry in motion, a light-hearted intro to a reply rather than the offensive style you chose to assign to it. Take it easy. All in good fun.
Is there a word for the paradox where it seems everyone always would act more righteous than the politicians, CEOs or even celebrities under similar circumstances?
Not an attack on OP or the article, its not too bad... its just I get tired of people saying they would _never_ do these things if they were CEO.
We need better labor law than “at will” and healthcare that isn’t tied to the employer. Mass hiring and mass layoffs shouldn’t be able to happen on a whim, especially across an entire sector.
We cant blame CEOs for exploiting workers to maximize profits. This is very predictable behavior that is currently incentivized.
I agree that healthcare shouldn't be tied to the employer, but why should companies be forced to employ people they don't want or need? If the government thinks they should keep getting paid, maybe the government should reform unemployment benefits.
In a perfect world where we're all purely independent actors with guaranteed housing, food, education, you're right, the current system is great.
But unfortunately we have decided to tie your ability to stay alive to your job, so until we fix that we should have safety nets in place so that companies can't ruin their employees lives at a whim.
I was laid off and think at will is great. If I had to be notified et al, I'd have to work and interview at the same time. Right now the state is paying me to do that and I get to relax the rest of the day with a lovely severance package. I went skiing this morning. I wouldnt be able to do that if I had to work my current job while being laid off.
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[ 4.3 ms ] story [ 241 ms ] threadIf you want to argue for a particular CEO not executing on grand strategy beyond the layoffs that's completely valid.
If you just want to be mad at the persons responsible the CEOs are the intentional scapegoats, the root cause is above them.
This is ultimately why I support board-level employee representation and why I think it's a good idea for employees to collectively own a non-trival amount of corporate stock. Providing jobs to generate stability in society has become a critical role of business, and the public at large is coming to expect more from publicly traded corporations than just quarterly profits. Wall Street shouldn't be the only voice in corporate governance.
Without the threat of the Soviet Union or even a semblance of an organized labor movement, there is nothing meaningful to support.
Also by revenue, US automakers are bigger than German ones.
I recall reading an article that for some companies in germany, the board-level employee representative have successfully negotiated during the GFC, to not have layoffs, but instead collectively took a pay cut and survive through the difficulties. The company got to retain the talents and save on the costs of retraining etc.
Having a dissenting voice can lead to better ideas. However, if the intention is to prevent employees from being fired even when it is in the best interest of the shareholders, then this employee representation is only going to decrease the shareholder value, and ultimately the profitability of the company.
> collectively own a non-trival amount of corporate stock.
how do these stock get granted? Because if the employees themselves pay for the equity, then they're part owners. If they don't actually pay, then they'd be usurping control in a way that is not fair to those paying the equity.
I am pretty sure most non tech people around me would take the pay cut over the risk of becoming unemployed for an uncertain amount of time, having to find a new job, maybe moving to a different place etc….
> If they don't actually pay, then they'd be usurping control in a way that is not fair to those paying the equity.
From a capitalist point of view. Socialists would argue that shareholders are already usurping the labor of the employees by not paying their fair value.
but then you have to question the idea of what fair value is. The market rate is a pretty fair value to use. The argument that the employee's wages are always less than the full market value of the goods/services they produce, thus they must not be paid their fair share, is not correct - what happened to the capital that the employees uses to produce their output (the guaranteed wages are also considered capital in this case)?
Again, I think capital should get profit in exchange for risk taking and organization, but there is no moral argument that shareholders should continue to rake in record profits while working Americans continue to get squeezed tighter every year. At what point does it become rent?
How do you support these ideas?
After all, if you pay a guy to mow your lawn a few times, does he now have a say in what you do with your house?
Giving employees regular input into big decisions is a good idea in the long term. Giving them stock is a way to motivate them to be less inward-looking and think about the company as a whole, and a convenient mechanism to formalise and fine-tune the power balance. If you have a bunch of stock (initially 100%), you can think of the voting power it entails as a resource that you can spend on people who are going to vote well with good information and the right kind of interest in making the company sustainable. Giving it to employees is a good way to spend that resource. They know more than regular shareholders and are empowered to change the course of the company from within.
If you can’t bring yourself to give away any stock due to unstoppable greed and a belief that employees are dumb lawn mower operators who would never know what’s good for them, then basically… good luck. There is a reason so many law firms operate as a partnership to buy into, so many investment firms give out units of a trust, so many startups and megacorps alike give out equity (usually as options). Of those, it’s usually only law firms that are giving out voting power. All people are saying here is that we should not shy away from giving out voting power as well as the economic interest that this practice is usually restricted to.
I don’t think we should seek to require that employment be more stable, because down that route lies moribund companies and an ossified economy, and at some point, that can no longer sustain the standard of living that Westerners are accustomed to, because companies in places that don’t have that will eat their lunch. I think we should just seek to make the penalties of not being employed less severe, with much improved social safety nets. Let people continue to compete hard, let them continue to associate and dissociate freely, but don’t let the penalty for dissociation be financial ruin for employees. If we achieve that, we’ll likely make the economy more dynamic, as risk taking is no longer so personally risky - it would give everyone the ability to operate from a place of security and rationality rather than fear and anxiety (from “a position of fuck you”, if you’ve seen that clip from The Gambler) and do what they should do rather than just trying to tread water.
If your response to challenges as a company is to shut out your employees and tell them to obey, you are missing out on this machine’s power. The only reason you would want to miss out on that power is if you had no other choice, because you were unable to frame the challenge in a way the employees can respond positively to. Democracies have a way of correcting that (among other things), which is called getting voted out; companies don’t by default, so at best you’re usually running a shitty version of democracy and yeah, bad democracies sometimes perform pretty poorly.
I think my main argument is to not mandate structure with law, I’ve seen a number of people calling for that. I think that if we strengthened social safety nets, this sort of thing would become more common, as people became more free to leave workplaces they didn’t feel invested in, and more companies would try to foster it to attract employees.
A pretty huge issue in modern capitalist economies is that people are locked into underpaid jobs with no prospects and no investment in their future other than to hold on for dear life. That’s a massive waste of our potential and a terrible experience for those workers. (And because failing these people is part of the complex of interconnected root causes that lead to anti-democratic sentiment, it is an existential problem.) You want companies to compete to use people better than that, and sharing in the rewards and the decision-making makes for a much better plight for a worker at the lower end of the pay scale. Heck, there are companies today that pay everyone the same salary, determined by the company’s profit divided by N. Their people post on HN sometimes.
Apologies for adding a slightly empty comment but clicking the little "upvote" button didn't feel like it was enough.
I said that being paid for a job does not imply ownership.
> If you can’t bring yourself to give away any stock due to unstoppable greed and a belief that employees are dumb lawn mower operators who would never know what’s good for them
That rude comment doesn't deserve a reply, but I wrote one anyway.
The parent I replied to wanted to use the government to force the issue.
You and anybody else are free to set up and run a corporation the way you please. If it works better, others will copy it. You can even set up a collective, or a commune, or a workers' cooperative. It's not illegal in the US.
Whether I am open to your vision of how a company should operate is irrelevant. In a free market, you get to choose how your company will operate. And the best structure will win.
Company owners are not so stupid they will turn down a corporate structure that will be more profitable. Tech companies are famous for handing out stock options like popcorn. Back when I ran Zortech, which was privately held, we gave each employee a cut of the monthly sales.
When I worked at Boeing, I bought Boeing stock out of my own pocket. It paid off handsomely.
That’s really awesome man, I wish you’d started with that.
And ... they loved them! They were really proud of their suits (for many it was their very first one) and enjoyed visiting customers with them on. Our customers liked it, too, and would remark that no other tech company representative would wear one. They took it as a mark of respect for the customers, as tech representatives usually were slobs. It was a big win for us, and a fun way to differentiate us from our competitors.
The conventional wisdom is one's dress doesn't matter, but in my experience it makes a big difference.
If the state deems it good policy for corporations (say, above $x,000 capitalization or y employees) to have employee representation on their boards, the state is well within its rights to introduce this condition.
Silicon Valley pays the highest and employs the most number of programmers and has done so with employees on boards. Other places and countries with board-level employee representation seem to do worse.
What's the logical argument that board-level employee representation won't employee pay or total employment?
I have read the parent comment twice, what is the argument or data supporting employees on boards will be good overall?
What data point do you have? Do you have a causal data point? Would love to hear that!
> Correlation and causation, just because US has high salaries doesn't mean it's because of that etc etc
Read again. I didn't suggest that.
Day to day moves in the market happen for many reasons. I doubt that over any sort of reasonable term (let's say a few quarters) the companies doing massive layoffs are going to outperform the companies that are not.
How is it impressive and worth multi-million dollar salaries to lay off people when your revenue is down?
How is it amazing to do what the board wants all the time?
What about mistakes and past decisions? If you make a decision, it turns out to be wrong, you aren't exceptional to then fix it. If I am making a customers order at McDonalds, get it wrong, then redo it that's certainly nice but how is that more than what anyone else would do?
If a companies revenue is down the CEO's decisions should be analzyed to see if his actions contributed to it and perhaps lose his job if so.
Agree. However, will you also apply the same logic to the current administration of your government who created the economic conditions which set the CEOs up to fail?
You did not have to have a degree in economics to see the effects of shutting down an entire countries economy for over a year would eventually come back to bite us in the arse. The Tech crowd predominately leans left and a large majority supported these measures and even heralded them at the time.
This is now the fallout of those decisions and we are to live with the result of our convictions.
Saying you want someone else to take the fall is just asking to have your cake and eat it too, which I do not support at all.
2. The most severe shutdowns were in the early stages of the pandemic, under President Trump and a Republican Senate. Not sure why you are laying the blame entirely at the feet of those who “lean left”.
3. During those same shutdowns, the companies laying people off today went on hiring sprees. That wasn’t the decision of the employees being hired, it was the decision of management at the company. So even if it is true that this economy was inevitable due to the pandemic, and that anyone should have been able to see it, then the responsibility lies with those who chose not to act accordingly but instead overhire, which again, is management.
This was voluntary however since many would follow it there would be an economic impact
That would suck, but that didn't, even to a first approximation, happen. Not for a year, not for a month, and not for a day.
Schools, Restaurants, department stores, and just about anything that wasnt a pharmacy, grocery store, or gas station was forced closed. Borders with countries allies and foes alike were closed. In some 1st world countries like Germany this went on for MORE than a year.
Then you had a partial shutdown of the economy with vaccine requirements that shut out the economy for millions who did not have the vaccine yet or had no plans to get the vaccine.
You supported this. I will bring it up to you again, and again, and again because what you supported was wrong.
I will not stop telling the people that you and whoever supported these horrible measures are part of the reason we are in the situation. No matter how much you say No No No. You are partly responsible.
It might appear to be a lack of planning, but another way to look at it, is these companies are running at full throttle in a vehicle sense, and the CEO and others have taken their foot off the throttle to negotiate a bend.
>How is it amazing to do what the board wants all the time?
I've seen stats delivered to management and the board, and I've seen the board tell management to reverse their actions within minutes of those stats being delivered at shortly after 6am.
Keeping a currently work-to-rule, minimum-productivity workforce happy when it affects the business in other ways is important to the board.
> If a companies revenue is down the CEO's decisions should be analzyed to see if his actions contributed to it and perhaps lose his job if so.
Look at the UK Prime Minister situation, 3 PM's in a year. Its an interesting lesson for the whole world if you consider the British PM to be a CEO of a country.
Look for the parallels and whose Authority do you trust?
Do you find pieces of paper from a University to be an interesting Authority object? Do you find money to be an interesting Authority object?
Do you find the internet, regardless of website to be an intelligent training exercise? Do you find life and society is one giant over populated prison?
The companies of CEOs who were able to higher employees quickly and capitalize benefitted.
Now capital is much more expensive and companies cannot afford some percentage of those inefficient employees. CEOs that act quickly on this and cut staff typically end up protecting more company revenue.
CEO decisions also are absolutely analyzed by the board and CEOs are typically fired based on performance relative to the market as a whole.
No one could have predicted that you could hire people you don't need or are ""inefficient"" and a company could still be profitable?
Again, is this a complex notion? Is this like some revelation that could only be understood after a certain date? I mean I think not. It's such a simplistic concept
Also you keep claiming the people hired were inefficient and the people fired were inefficient. How do you know that? Like what is inefficient? It bothers me how you said it twice and implied everyone was inefficient (of those fired and hired)
And if you can predict interest rates, then no need to be a CEO, you can make billions just by placing a few trades per year.
You don't pay an executive millions because he has fourth-grade economic understanding.
https://en.wikipedia.org/wiki/Interlocking_directorate
1. Boards are mostly made up of (drum roll please)... other CEOs. There is a kind of class solidarity making sure that overall CEO pay only goes up and up and well beyond any kind of inflation; and
2. The real issue with many companies having poor financial performance has nothing to do with "bloat" or "over-hiring" and everything to do with poor leadership. Case in point: the tens of billions Meta has sunk into the Metaverse despite there being no product-market fit, no business model and no end to spending in sight.
But it's employees who are bearing the brutn of these poor decisions, which is extra ironic when you remember that those employees have no power over those decisions.
And notice...all management below the CEO are expected to inherit the stockholder priority.
That is to say, management (for which I have been) are the foot soldiers of the capital class. This is done by incentivizing management with larger and larger percentages of compensation based on stock, thus aligning management's incentives with investors rather than with non-management labor.
Its funny, and indicative, that even "Business Insider" doesn't recognize the difference.
FWIW, Silicon Valley "hires and fires" founders. Sometimes they also happen to be good CEOs for Wall Street, until they are not (involuntarily for performance reasons, or voluntarily because of age or enthusiasm).
Put more simply if these people were making the company money it wouldn't lay them if managers are rational.
A team at Google making a few more millions than they spend doesn't justify buying Google stock at it's current price.
Google isn't a startup anymore, so it might be worth going after a bigger piece of a smaller pie
In the long run tech companies will be valued just like normal companies. Innovation is slowing down. Expect a reduction in tech salary rates relative to more traditional engineering.
Three things propping up tech salaries over the past decade are loose money policy, the advertising bubble, and the rapid turn over hardware and software in the market place.
There are few fundamentally new things of value in 2022 vs 2012. It just costs more to pay programmers to make the same thing and takes more computing horsepower. In the long run this is unsustainable.
For example GB of RAM to run a web browser or OS. I could watch videos online in 2012. I can in 2022 too.
Also, saying Google was surpassed by ChatGPT is equivalent to saying something else reliable than Wikipedia is beating them. That's nowhere near realistic.
If the developers were so hard to find, wouldn't companies adjust their expectations and work with who they can find, instead of having them play Leetcode and other crazy games that have very little to do with day to day realities of work at the company?
When there's a famine, people don't complain that their T-bone steak is medium well done, they eat what little food they can find.
When companies were executing on projects that required workers and couldn’t find them, yes there was a shortage. When companies cancelled several projects and had extra headcount, they let workers go. I suspect in the not so distance future the very same companies laying off workers now will need more of them, and that will be even more difficult than today.
I suspect plenty of devs just can't be bothered with it; they either stay where they are, jump to somewhere they already have an 'in' by personal recommendation, go full time time on a side project or freelance, and maybe just play the interviews for practice.
Is it really that bad or companies just mindlessly parroting FAANG interview process? No, you don't really need 5-stage leetcode-style interview to hire your Billy-the-junior-React-guy.
It's not perfect, but it doesn't make Google look all that great. Google dumped tons of engineers and has plenty of engineering roles currently open, they didn't even bother trying to move folks around.
So yeah, kudos Intel
From a LinkedIn post that I assume this author sourced for their opinion:
Things Intel did this time around, that weren't done last time, nor by Google/MSFT: * Advance notice it was coming to all employees. * The goal was budget reduce, so large business units had some ability to reduce (not eliminate) layoffs with extreme cost-cutting measures. Point is, there was a clear stated goal besides elimination of jobs. * Per public sources, the CEO is taking a 25% pay cut, leadership team 15%, etc, with the goal of reducing that number of people laid off. * Some Intel business groups gave people a chance to 'sign up' for voluntary separation. * Personally told by my manager I was impacted. * 1-2 weeks to wrap up my work. * Then 9 weeks(!!!) paid employee of Intel for the sole purpose of finding a new opportunity inside or outside Intel.
This is all on top of the severance, which is the lone similarity with the other big tech layoffs.
tech ceo's didn't screw up. the current economic turmoil has been caused by overstimulus in the context of the covid lockdown and related supply chain knock-on effects, and subsequent over-easing of the money supply. Everybody knows this already. And the stock market mini-bubble preceding the recent dip should have been obvious to everybody (me included), because why with a pandemic lockdown would we all think that it made sense for the stock market to soar so high?
https://news.ycombinator.com/item?id=34679892
As Apple and other companies who didn't overhire go to show, you don't always have to buy into overstimulus.
It's amazing how well the world economy works most of the time given that everybody is flying by the seat of their pants.
if one tech CEO screws up (Zuckerberg with Meta?) you can see it. But when the whole sector screws up it's a pretty good sign something macro is taking place.
Google - 5yr Beta 1.09
Amazon - 5yr Beta 1.22
Meta - 5yr Beta 1.22
Apple - 5yr Beta 1.28
Not even close to Beta 2.0, more like 1.0, i.e. just copying market trends. Moreover, from all those companies, only Apple, "the worst" of them beta-wise, didn't have layoffs.
The whole “Many Americans got an extra few grand in 2020 and that caused inflation!!!” narrative is as fake as the “Organized shoplifting is causing retailers to lose a huge amount of money!!!” fake story and the “Our cities are burned out hulks because we defunded the police!!!” fake story and the “People aren’t applying for these open jobs because they’re lazy and can get paid to sit around!!!” fake story.
Every one of these stories serves a particular purpose for which it was designed, planted, and amplified by specific groups of people with specific policy objectives.
Why do you think those greedy companies got greedy since 2020 and didn't in 2019? They were always greedy, they are just responding predictably to market conditions caused by the Fed and Congress. That's what changed, not the companies.
That's a misinterpretation of the point. The companies were greedy in both years, but 2020 gave them an external thing to blame. Consumers largely accepted the "it's COVID, what can you do?" explanation.
In my city, the privatized gas/electricity utility is blaming COVID now, in 2023, for massive billing issues where folks are getting $10k bills and I'm only getting a bill every other month. It's not very plausible, but they're still using it as an excuse.
But then 10 years ago I'd have never imagined it possible for things to ever get to this point, so what do I know.
I cant tell if this is sarcasm or trolling.
Between PPP and the stimmy checks sent out, amassed to about 6 trillion dollars of direct stimulus during the COVID outbreak. Yes, this will have an effect on inflation. No I am not an economist but you would have to be trolling or demented to think not.
This is not how economics works. Companies don’t need an excuse to raise prices, and margin has nothing to do with what the price point should be; margin simply sets a floor for the price, and it gets too low the business is not viable and shuts down to move the capital to another business with better margins.
Prices are increased if and only if the overall profit increases because the lost sales due to the higher cost are offset by the increased revenue from the price increase.
This is not due to any artificial excuse or fake stories. This situation can be caused for a lot of reasons, but macroeconomic situations are certainly part of it.
Imagine you sell eggs and bird flu kills a ton of chickens around the country, but you’re chickens are fine. Your comment makes it seem like you are supposed to keep selling your eggs at the same price, because your margins haven’t changed. It still costs you the same amount to raise the chickens, so raising the price is just going to increase your margins.
But if you don’t raise prices, you are just going to sell out too fast and there will be an egg shortage. The correct thing to do is to raise prices to match the supply with the demand. Yes, this means the margins will increase, but that isn’t dishonest or wrong. There is a reduced supply, it has to happen.
But it's fine. The comment is flagged and that viewpoint is unwelcome. So I won't talk about it here. Communities have the right to police themselves.
Who else if not managers are at fault here.
The only reason they are paid extra is because they are responsible for mistakes.
This is your daily reminder that tech capitalism is fundamentally an extreme inequality engine, and corporations do not give a damn about YOU, they never have, they never will.
An employee is an economic input, just like land or capital or machinery. Why do you think you're entitled to not being treated like a commodity exactly? It's their money and their risk:reward profile, not yours. You don't get a vote just because you have emotions. Labor IS a commodity. Labor takes no risks when they show up to work and collect a guaranteed paycheck.
All you can do is focus on gaining competitive skills that allow you to enjoy the luxuries you think you're entitled to automatically. You're entitled to nothing.
It is not, and this attitude that profit is all that matters is exactly what's wrong with our current system, or why the current system is just wrong. Eg 'shareholder value' was only enshrined as the existential goal for companies in the early 20th c, and only really driven aggressively following the Lewis Powell collusio.. uh, memo.
Yes, companies should be profitable, to prove that they are doing something that society values, given the lack of any other realistic gauge (maybe we can invent something less clumsy and random, more elegant, in future).
But the reason for work, and therefore companies, is to provide goods and services to society, not just to 'make profit'. What does 'make profit' even mean, really? Markets, capital, profits, are all just current (flawed) methods to enable work, to decide what work should be done, to encourage invention of new valuable work, etc. The reason for the work is to feed, clothe, educate, heal, entertain ourselves.
Working does consume one's time, energy and health.
If one is not getting the best bang for one's potential in wage terms then one is feeling the negative potential of this missed opportunity risk.
Conversely if one is getting paid more than they are worth and one is experiencing the upside of this risk. The downside is still present too...they could be laid off and find a less well paying job.
So employees absolutely take on risks by engaging in particular jobs vs. alternate opportunities.
The most valuable things any person possesses are time and health.
To the extent that the labor market is efficient and human capital is well utilized this risk is minimized.
https://www.nextgov.com/cxo-briefing/2023/02/nsa-bills-itsel...
I dunno.
It's doubtful CEOs saw the end of ZIRP (the driver of this crazy growth) coming, given that nearly 0 people in the industry on this board did, etc.
The forces that lead to the "everything bubble" including overhiring, and the subsequent pop & cooling are much larger than any one CEO or even industry.
Everyone wants so malign actor to be responsible when bad things happen, but systems are more complicated than that.
From other historical news on the strange fate of a group of skiers in the Ural Mountains: “In classic Soviet style, a number of officials who had little to do with the tragedy were either punished or fired, including the director of U.P.I. and the chairman of its sports club, the local Communist Party secretary, the chairmen of two workers’ unions, and a union inspector.” https://www.newyorker.com/magazine/2021/05/17/has-an-old-sov...
But I think it's much deeper -- having worked at a couple big companies now, I realize (at least to my limited observations) that the path of a company is set by the deeply ingrained culture that has been established over many years by its founders, by its evolution, its successive leaders, and in fact, the competitive environment in which it operates. Things (good or bad) that last far beyond any one leader.
It manifests in the little incentives that people far below the CEO understand to do their jobs in a certain way, to pursue certain things and decide to drag their feet or ignore certain other things.
If you were hired at a company and worked there for years understanding that if you did <x>, you got <y>, it will be hard to change a whole workforce of that notion, especially when one individual gets beaten back in line if they stray. Even if others want to change just as much. Even if the CEO says to change. It takes years for that info to percolate. Sometimes it never does.
No, sometimes companies need to die in order to be reborn.
But then you get turnaround CEOs, the ones the board hires because the company is in dire financial straits, who comes in, fires executives, sets new strategy, communicates openly and plainly across all layers of management and labor. Things can change quickly under the right leadership.
And they were all smart guys, courageous, right incentives etc. Large organizations are complicated. The post above is right - there is no silver bullet.
I also remember what happened when steve jobs came back from medical leave, and lots of directionless meandering was cancelled out as someone took the rudder again.
Absolutely agreed, but here's my take: Enabling failure to be more equitable either helps fix a company's problems faster, or causes the company to fail faster. These are both healthy things.
You describe corporate culture as being something that's very difficult to change. Absolutely true. If culture, to some degree, is a root problem for why a company isn't performing well, lay-offs aren't going to improve things. They're only going to make things worse. Exiting the CEO or other leadership and bringing in new leadership that can reorganize, push culture in a specific direction, increase output, etc; could help things. Change isn't easy, and many people will resist the change, but being able to view that resistance through the lens of a conversation with the people resisting rather than a broad and blind lay-off actually helps. At a high level, you can build the framework of new expectations; identify problem departments, teams, and people; help them adjust to the new normal; and at worse have that hard conversation.
But, of course, some companies are just rotten beyond repair; and changes like this would change too much and potentially disrupt the whole organization. It sucks, but its better to identify that sooner rather than later.
Saying "ah darn, well running a company is hard, if only there was a panacea for our problems ah darn!" is so fucking often used as an excuse to keep bad leadership around. No: There isn't a panacea. That does not exempt leadership from criticism!
While I am sure it feels great to have and voice an opinion about everything, at some point, in the interest of not engaging in self-deception, one has to be honest in recognizing lack of knowledge.
Put a different way: If you have never had to fire 100 people or more, it might be a good idea to recognize you likely are not equipped to understand that reality.
https://www.edzitron.com/#about
Also just a heads-up: copy-pasting the first few words of someone's comment and formatting your reply around it looks really juvenile and petty.
No, it did not. At all. My post had exactly nothing to do with the article’s author. Not one bit.
> not part of the elite, untouchable few who are allowed comment on the goings-on in Silicon Valley
Yet another misrepresentation. Please read what I actually wrote.
> looks really juvenile and petty.
That’s your interpretation. From my perspective it’s poetry in motion, a light-hearted intro to a reply rather than the offensive style you chose to assign to it. Take it easy. All in good fun.
Not an attack on OP or the article, its not too bad... its just I get tired of people saying they would _never_ do these things if they were CEO.
We cant blame CEOs for exploiting workers to maximize profits. This is very predictable behavior that is currently incentivized.
But unfortunately we have decided to tie your ability to stay alive to your job, so until we fix that we should have safety nets in place so that companies can't ruin their employees lives at a whim.
Healthcare tied to a job is crazy though.
Agree about healthcare. That's just dumb.