Layoffs Are Cruel and Don't Work | Hacker News Reader

Layoffs Are Cruel and Don't Work

matduggan.com

212 pointsmattikus263 comments

This is incredibly dumb.

> The downsized companies, however, were outperformed consistently by the nondownsized ones during the initial two years following the downsizing.

Can you think of any confounding factors in this analysis? How do you control for important factors like, say: whether the board is in enough financial trouble to downsize?

What? Next you’re going to find fault in my analysis that proves CPR kills people, as evidenced by the number of people who die after receiving CPR compared to those who just have a normal day.

good analogy (not being sarcastic)

You have to prove that CPR works. The burden of proof is not on anyone to prove that CPR does not work. In that sense the idea that the difference becomes insignificant after just 3 years is quite damning

Damning to which side of the argument? Sounds like evidence that the layoffs worked to me.

If an action makes no difference then it makes no sense to actively do it.

Assuming the companies that layoff are in equivalent situation to those that didn't.

If the companies that lay people off are much worse off than the average comparison company, and they look the same as comparison companies after 3 years... then it sure makes sense to do it.

Companies do layoffs when things are bad.

"makes no difference" != "ended up in the same place"

>Companies do layoffs when things are bad.

Recent history has shown companies also do layoffs when things aren't bad.

yeah it's like doing CPR on a healthy person (profitable company). of course it works! but is it necessary?

Don't forget the next bit, "by the third year, these differences became statistically nonsignificant". So the layoffs... worked?

> So the layoffs... worked?

How does that follow? The conclusion would be that both the companies and workers suffered unnecessarily for 2 years, with no long-term benefit afterward to the layoffs. In other words, you should just ride out the downtimes instead of panicking.

Group 1: companies in a good enough financial situation to not need layoffs Group 2: companies in a dire financial situation requiring layoffs

After 3 years, what group would you expect to perform better financially? And if we told you it was a tie, you might ask: what did group 2 to improve their situation? Layoffs? Ok, sounds like they worked.

> Group 1: companies in a good enough financial situation to not need layoffs Group 2: companies in a dire financial situation requiring layoffs

None of the big tech companies are in a "dire" financial situation. Indeed, some of them have just announced modest revenue increases this week. Yet they still conducted big layoffs. Did they "need" to do it? (Note in contrast that Apple announced a significant revenue decrease yet didn't panic and do layoffs.)

   Did they "need" to do it?

Yes, that's the question. GP's point is that the financial situation of the companies is a confounding factor, and unfortunately the analysis does not address this. The conclusion, "Layoffs don't work", does not seem to be supported by the data/analysis that was presented.

Depends on your definition of "dire." Perhaps some companies have Finance departments that believe they're in a dire situation when they have less than six months runway if all revenue stopped. I don't know what they factor in to the decision other than they believe their costs are too high given the current economic conditions.

It's kind of like me having plenty of money, right now, to afford Netflix but cancelling it anyway because I feel $14/mo or whatever the price is still too much for the value it delivers in the current year, and generally worried that I might need that $14 in a year (multiplied out across a bunch of other services or habits I engage in). I'd rather save my money now, as I've decided the situation is dire or could easily become dire. Am I actually cruel and obligated to keep my Netflix subscription (gotta make sure Netflix employees make a living) because I am not, at this moment, in what others perceive to be a "dire" situation?

> because I feel $14/mo or whatever the price is still too much for the value it delivers in the current year, and generally worried that I might need that $14 in a year

What if you're wrong, though, and indeed what if many people are wrong in the same way, cancelling Netflix and passing up the opportunity of enjoyment to save a little money, but in the long run it makes no difference, and only hurts them in the short-term by depriving them of the enjoyment? That's the point of the article, that layoffs are empirically self-defeating.

It's not about a mythical "obligation" to employ someone. The cruelty comes from laying off people unnecessarily, when there's no benefit.

I think it’s more that cancelling your existing Netflix contract for a few months because it’s too expensive right now, knowing that you’ll likely want it again 6 month in the future, and knowing Netflix will likely increase the price to $21/month for new contracts, seems a little bit shortsighted.

> Apple announced a significant revenue decrease yet didn't panic and do layoffs.

But then they also didn’t massively increase their headcount over the previous 3 years. Steady as she goes, as always.

> Apple announced a significant revenue decrease yet didn't panic and do layoffs.

I would say that Apple is in the unique position of being particularly volatile since they rarely post losses. If they posted a decrease AND did layoffs, I'm sure some of their brightest would jump ship, and stocks would tumble further.

Plus they didn't really do a strong round of hire during the past few years.

The assumption that the companies doing layoffs "need" to do layoffs isn't necessarily well founded. Really we should be comparing companies in comparable financial situations - with one group doing layoffs and the other not. For public companies, we could probably reasonably set up this comparison, but for private companies we don't have the data.

> Group 1: companies in a good enough financial situation to not need layoffs Group 2: companies in a dire financial situation requiring layoffs

Companies do layoffs all the time, even when their financial situation isn't dire.

I don’t think there is nearly enough information there to conclude that.

In any case they’d still have lost two years of growth when their competitors were.

Maybe there's selection bias, where the companies who downsized were doing worse than the companies who didn't. So if both sets of companies ended up the same, and one set was initially doing worse than the other, then that'd mean layoffs worked

Companies typically don't layoff because they want to have a laugh.

Companies layoff when they're in some sort of trouble. If you don't have the cash to support the staff, you can't will that into existence.

So it follows that companies that laid people off struggled for a bit. Because they were already struggling. It's not an instant cure, or even a guaranteed one. It's a measure to spend less so you can ride out the downtimes.

Another way of stating it is that "People who were sick with the flu seemed to tire more easily in the days that followed compared to people who weren't sick at all". It's to be expected.

> Companies layoff when they're in some sort of trouble. If you don't have the cash to support the staff, you can't will that into existence.

No, companies layoff when they want to spend less money paying people. Being "in some sort of trouble" is only one of many reasons why they may choose that course.

You’re missing a number of critical factors. One of them is that companies have largely abdicated performance management and managing out underperformers, and layoffs are a primary means to get this done. Another issue is that larger companies have incentives problem when headcount justifies manager-track promotions. Layoffs are a way to force them to address dead weight headcount.

You should think harder about what might drive layoffs.

Yes, I experienced this. About every year and a half, my company instructed each office to layoff a certain number. Low performers were targeted. If an office didn't have low performers, good performers were let go, and only the very best were retained. It cruelly encouraged and enforced exceptional output. It was heartbreaking, actually. But the pay was very good and we accepted it.

In that context I was told, "Tutor this guy (a fair worker, but not exceptional). We're going to let him go if he can't step it up." We worked together and I saved his job - it remains a very proud moment for me.

The company was a leader in its field, and its merciless practice of retaining only the very best performers contributed to its success.

Capitalism at its Darwinian worst, perhaps. Or its best, depending on your perspective.

But you forgot to mention one vital thing: layoffs make the financial sheets look much better at given spot, and the C*Oes might even get a bonus for it. Giving in most of the cases, the executives are just employees, they cannot care less if the company and/or employees doing the actual work hurt in the next couple of years as by which time they might have either secured a new job from another company by delivering the layoffs "successfully" or walked out with a decent paycheck.

It's pretty obvious to me at this point that most of the time layoffs are driven by exceptions of financial annalists. A point of order none of those guys have ever been involved in running firms. And the certainly don't care about anything beyond how long a median 'investor' holds stock.

Layoffs are indifferent to outcomes by the third year.

Has anyone here read the full paper and checked whether they controlled for this?

Per the article, they just took the fortune 1,000 companies and look at the ones that laid off during the 2008 crash versus the ones that didn't.

> How do you control for important factors like, say: whether the board is in enough financial trouble to downsize?

I'd love to see this controlled for shareholder dividends and stock buybacks. A big trend we're seeing in this round of layoffs is companies doing a lot of service for their shareholders, some posting record profits, and sacking fractions of their workforce. It doesn't tell a story of sacrifices made due to financial trouble, it looks like nothing but ruthless profiteering and class warfare.

You’re assuming downsizing is a consequence of financial trouble. It has not been the case for almost every layoff that happened recently.

How do you reckon that? All the big tech companies had huge income declines.

This is what they say! But is this supported by data?

Oh no, poor Alphabet, they only made $23 billion in profit Q4 2022. The wolves are really at their door.

Yes. They won't have data for companies that failed. So the downsized group should be doing even worse than the data suggests.

I read the referenced (apparently peer reviewed) study hoping that it controlled for this obvious problem, but no. (I don't count that they measured "in a period characterised by growth" because individual organisational performance is rather noisy.) Maybe I'm the dumb one here, but when I read their results I draw the complete opposite conclusion: layoffs work but they are not a quick fix; it takes some time for the positive effects to kick in.

This is somewhat counter-intuitive to me so I suspect there are other confounders (overhiring, measuring financial performance in a complicated way, etc.) but I haven't had time to run the analysis for myself yet. Maybe the data is too sparse to support a more sophisticated model.

If someone else would like to give it a shot, it looks like these people have compiled the data in a convenient format, for at least the past two years: https://fueled.com/blog/2022-fortune-1000-companies-spreadsh...

In context of the article, the big tech companies are widely profitable and no way in any financial trouble. Hence no point downsizing.

> Can you think of any confounding factors in this analysis? How do you control for important factors like, say: whether the board is in enough financial trouble to downsize?

You're correct, obviously, on the general correlation aspect of companies having financial trouble and having to do layoffs.

The thing with many of these tech layoffs though, is these are in some cases companies with no trouble whatsoever. Companies with so many billions in the bank that they could continue to pay all salaries to everyone for a century without breaking a sweat. So they have zero need to reduce expenses.

Nobody likes getting laid off. But it's weird to see all of these think pieces implying that once someone is hired into a job, that job should exist forever.

Things change. Company growth isn't monotonically increasing. Not all positions will exist forever. Joining a company was never a guarantee that you'd have a paycheck and work to do until you decided to leave.

Also, pointing out that companies that did layoffs had worse performance than those that didn't have layoffs is an impressive example of missing the point. Layoffs usually are a result of declining performance, not the cause of it.

There's a big difference between "things change" and "mass top-down layoffs are an effective way to adapt to change"!

> There's a big difference between "things change" and "mass top-down layoffs are an effective way to adapt to change"!

I worked at a company that tried to avoid mass layoffs at all costs. Whenever it became obvious that change was necessary, they'd do little cuts here and there, or they'd force people into roles they weren't familiar with (think front-end devs moved to cloud backend dev) to try to salvage people at all costs. They only cut people in small numbers here and there, and always spread out over long periods of time.

It was terrible. People were angry because they were hired for one job, but forced to do completely different work because the original needs had disappeared. People were constantly living in fear because there were micro-layoffs multiple times a month. They weren't called layoffs, though, so they weren't announced. You'd just open Slack to message someone and they'd be deactivated. You always wondered if you were next.

It's not pleasant to do mass layoffs, but if a company has to change it's much better to just rip the band-aid off and restructure all at once.

Exactly this. Bleeding small numbers of people is absolutely terrible for morale. Everyone will be wondering whether it's their turn this week, and that will 100% have knock-on effects. If you have to do a layoff, your goal should be to make it deep enough to only do it once and allow the healing process to start.

If your goal is to avoid layoffs, the solution is to build a war chest with months or even years of runway. If you hit hard times, freeze hiring and attrition will help some as you burn through that runway. (But also be careful of piling on the same workload to fewer and fewer people!)

I'd argue that bleeding small numbers of people randomly and/or arbitrarily is terrible for morale. Firing those who aren't performing or whose teams aren't contributing is actually good for morale. People know who is and isn't contributing and are far more understanding when the layoffs are the result of failed projects or unnecessary cost centers.

This discussion is already in the context of layoffs, not firing for non-performance.

The organizations that are using mass top-down layoffs as a strategy may not have the ability to do something more granular. And I don't mean that in terms of organizational size (though it seems inevitably correlated), I mean it in the sense that an organization's ability to manage its talent is a direct result of the quality of the organization's management hierarchy, which is the same hierarchy responsible for organizational bloat.

If your management hierarchy has too many mediocre managers, you lose the ability to evaluate who is/isn't pulling their weight at fine granularity, so you're stuck with blunt tools.

> Nobody likes getting laid off.

Much better than being fired for poor performance, too - "laid off because the company wasn't doing well" doesn't look that terrible on a resume.

Right now is the perfect time to get fired if you are having performance problems though. No one is going to think twice if you claim to be a victim of layoffs.

It depends. When companies are only cutting 6%, I'd go 50/50 on circumstances vs. performance.

Here's the thing: mass layoffs make it easier to get rid of people with performance or behavioral problems in a lot of jurisdictions.

I had to let someone go at a company we had just acquired in Montreal a few years ago. The guy was underperforming and had a huge attitude problem (bursts of anger actually). One of the frequent arguments he had with everyone was that he insisted he didn't need to learn French to live in Montreal and was somehow hostile to the language. I honestly questioned why he immigrated there in the first place.

Since this was an acquisition, it made it easy for us to do so. All we had to do was not to include him in the positions that would join the new company. Simple paperwork. He seemed to really want to come to the US but the performance and behavioral issues made it a big no. I don't think he would have passed the stricter requirements anyways.

Some companies like Google will even have engineers at certain acquired companies re-interview to transfer. The North acquisition was a poster-child for that: almost nobody got a job at Google, not even the founders. All they kept were the patents originally purchased from Intel.

I usually just casually lerk on HN for topics I'm interested in learning about or generally topics I don't have expertise in.

This whole layoff discussion had been an eye opener for me as to how uninformed a lot of comments are and just made on speculation.

I was there at the North acquisition, the vast majority of people kept there jobs and so did the founders.

People keep talking about these layoffs like they were done from some critical lens that can evaluate individuals performance. They're not!

The layoffs are organized exclusively at such a high level the people making the decisions have absolutely no idea how the people they are choosing perform.

These layoffs are temporary moves to get the stock price to move up, that's it.

Thanks for chiming in, otherwise I would have thought the parent’s comment was correct.

> I was there at the North acquisition, the vast majority of people kept there jobs and so did the founders.

You worked there? I hired former North employees. Most of them were looking at a way out since their equity had negative value at the point [0]. Founders are "advisors" at Google. Basically a retainer when someone is under NDA after an acquisition.

Regarding the layoffs, the company 1/3rd of it's workforce right before getting acquired [1][2] (So much so that some of the funding was pulled out! [3]). Internally, it was a patent play to keep the Intel Vaunt patents from getting auctioned to Apple or Microsoft [4].

> The layoffs are organized exclusively at such a high level the people making the decisions have absolutely no idea how the people they are choosing perform.

Layoffs give leeway to engineering managers to trim as they see fit. CEO won't have a case for every underperforming employee or employee with an attitude problem. Mass layoffs are for purely economical reasons, but it's notorious that it's a pretty convenient way to get rid of "hard to fire employees" without having to put in place HR counselling, performance improvement plans and so on.

[0] https://www.reddit.com/r/kitchener/comments/hg11tl/a_vision_...

[1] https://www.theverge.com/2019/2/22/18236253/north-focals-sma...

[2] https://www.theglobeandmail.com/business/article-a-vision-fa...

[3] https://www.cbc.ca/news/canada/kitchener-waterloo/north-inc-...

[4] https://www.theverge.com/2018/12/17/18144221/north-focals-in...

No one is saying you should have 100% job security, or never be let go / fired. People are saying that these mass layoffs and the way they are conducted are harmful to society and not as beneficial to the business as CEOs and investors want to believe.

Layoffs are not always a result of declining performance. We have seen several now where quarterly results point to increased performance but layoffs still occur as an opportunity to dump workers without much criticism.

> People are saying that these mass layoffs and the way they are conducted are harmful to society and not as beneficial to the business as CEOs and investors want to believe.

Exactly this, though I also propose as the end of your sentence, "...as CEOs and investors claim." We get told a lot of false or true-but-in-the-abstract motives.

The McSweeney's article[0] nails it perfectly for me. I am in the gap in the middle, where stable pensions were on the way out at the same time as companies dropped loyalty to employees into the bin. So I started my working life with the cultural expectation that existed--work for the same company, or maybe two companies, for 40ish years, then leave the workforce knowing I'd be stable--and am now expected to cover all of my years of life solely from the resources I can scrounge together. This, in a word, sucks, and it's part of why layoffs--especially when companies are still hiring in other areas is so jarring to me.

(Does it suck more than the generation or two who have come after me, who had neither the expectation of a pension or potential job stability? No! It's far worse for those later than me; their only "benefit" is people younger than me didn't start out with that false hope. They've always known they're screwed unless they can horde as much as possible in as little time as possible.)

0 - https://www.mcsweeneys.net/articles/macroeconomic-changes-ha...

Stable pensions are gone, that's why so much hustle everywhere: ranging from drop shipping to becoming slum lords through BRRRR investing.

Stable pensions are gone because they were built on a ponzi scheme based on a demographic moment in history that has now passed.

In hindsight those stable pensions were actually extremely immoral in a way. They allowed for a demographic moment where a large portion of workers consumed everything they produced with too little saving while supporting a much smaller number of retired and simultaneously telling themselves the next generation would pay for their retirement needs.

Well as 1 millennial all I can say is fuck that. I didn't sign up to support your prolifigacy in your youth and have no intention of doing so (to the best of my ability).

If you want a stable pension alongside an often decades long retirement, then start saving when you're young or have a lot of children to support you.

> Stable pensions are gone because they were built on a ponzi scheme based on a demographic moment in history that has now passed.

They are gone because of a conscious choice, manifested through tax policy, to transfer risk from capital to workers. (To the extent changing demographics would have impacted them in any case, it would have reduced the pension amounts.)

> If you want a stable pension alongside an often decades long retirement, then start saving when you're young or have a lot of children to support you.

I just want to point out that you're largely proving my point. I got started on saving later in my career because the first few years were spent laboring under the idea that pensions existed. (The 401k was rolled out after I got my first job, for example.)

We had the rug pulled, and there are a lot of GenX people who are going to be in a lot worse situation than me, someone who was lucky enough to get into a high-paying career and stay there (that is, I've never been laid off..so far) and deliberately did not have many children or take vacations or have lucked into not getting sick.

We are both in the same boat; you just have the "advantage", useless for anything it is, of never having thought you were on land.

> We had the rug pulled

If by "We had the rug pulled" you mean "the people we intended to force to pay for our pensions said 'no thanks'" then I agree.

I get why you may be upset how it played out because I agree that spending all your money your whole life then forcing other people to pay for your retirement is a sweet deal. But as one of the people who was expected to be paying, I'm sure you'll understand why I'm not particularly sympathetic.

The thing is there's more than enough wealth out there to fund the equivalent of those pensions you're so worried about footing the bill for if the wealthy were taxed appropriately and the "pensions" took the form of a government program like society security (but properly funded with a sane progressive tax system).

But you've fallen hook, line and sinker for the story purposefully seeded by the wealth class (the real wealth class, not the 6-figure salary FAANG 'wealth') to cause the middle class to go to war with each other instead of waging war against their real common enemy.

So well done, hope you enjoy being bent over by the wealth class your whole life because that's what is in store for you.

You don’t understand what a pension is so are reaching misinformed conclusions. A pension is deferred compensation. The employee earns the compensation while working, but agrees to receive the money later. If a person were a car, a pension plan is like paying monthly payments for a car rather than paying the full price of the car at the time of purchase. A company failing to pay a pension is analogous to a person failing to pay a car payment.

This is at best extremely incomplete. Pensions are not some kind of savings account, they guaranteed a rate of return that in retrospect was impractical. They’re now in trouble because that is becoming apparent.

They guaranteed above-market returns based off of the same ever-increasing-pool math that screwed up social security. Why do you think they’re essentially nonexistent now?

“impractical rate of return” is one element of “mismanaged”

Pensions are nonexistent now because other compensation packages have become the norm. Actuarial regulation has changed to incorporate lessons learned from pension fund failures. The goal of the regulatory changes is to decrease risk to consumers in contemporary actuarial products.

That’s about as deep as I can go on this topic. I’m not an actuary, by a number of my friends are and actuaries talk about lessons learned from failed pensions like engineers talk about lessons learned from failed software development projects. Evidently, demonstrating knowledge of those failures and the resulting controls is a key element of earning the title of professional actuary.

Continuing with the car loan analogy, the interest portion of the car loan is similar to the guaranteed rate of return in a pension. If a car company sets up a loan with a bad interest rate the car company will lose money on the sale.

The main difference between car loans and pensions is the time horizon. It’s much simpler to manage the risk of a 3-5 year loan than a 30+ year retirement that begins 45 years in the future.

A pension is deferred compensation. It’s money employees have earned that they agree to receive later in life in order to smooth their tax burden over time and benefit from pooled financial management by professional investors.

Pensions have failed because they were mismanaged. They are not “Ponzi schemes”.

Ponzi schemes are also just mismanaged funds. They are just the degenerate case of:

> "impractical rate of return” is one element of “mismanaged”

For future reference, people hoard things or money. A horde is a large group of living things.

I guess I'm "lucky" that I was born in a country who tops the OECD ranking for elderly poverty. Even though I moved to a country with an okay pension scheme, I've never counted on that to last. So I've been saving and investing as much as possible because, as you've said, I've "always known [I'm] screwed unless [I] can horde as much as possible in as little time as possible."

But I hate that I have this mindset. It’s useful to a degree but it’s almost become a compulsion for me. Incidentally, I think this is the main reason why my home country has the lowest birth rate in the world. I really wish we could all just, enjoy life without having to worry about poverty in the future.

(My home country is South Korea)

America could have a social safety net like European countries. If people really think it is harmful to society tax companies and implement unemployment benefits.

But you and I both know that will neve happen lol.

> People are saying that these mass layoffs and the way they are conducted are harmful to society and not as beneficial to the business as CEOs and investors want to believe.

If people could dependably and quickly find new employment after being laid off, with a 100% income replacement safety net for short-term frictional unemployment, getting laid off wouldn't be so stressful and thus wouldn't be as harmful to society.

To solution isn't to slow everything down (by making it more difficult to lay people off) but to speed everything up (reduce the personal consequences of getting laid off).

> Layoffs are not always a result of declining performance.

True, but Google search revenue was down 2% YoY. Youtube ad revenue was down 8% YoY. OpEx was up 10%. Google absolutely saw declining performance while on a hiring binge.

Layoffs are sometimes used to avoid saddling employees with the stigma of getting fired. Laying them off also means the employee can get unemployment compensation.

> But it's weird to see all of these think pieces implying that once someone is hired into a job, that job should exist forever.

Yah, only the older generation got a chance at that. I wish I could have one lifetime job like my older family members had, but like many things that basically can’t be done now.

There are two different contexts around layoffs.

1) The company is struggling, losing money, etc and needs to tackle corrective action before everyone loses their jobs. 2) The company is generating record revenues, profits are high, but growth will be 4% instead of 5% so we need layoffs.

There seem to be a staggering number of layoffs from camp two.

> But it's weird to see all of these think pieces implying that once someone is hired into a job, that job should exist forever.

It's also really weird to see:

- Rescinded offers - People hired and let go in 3 months (not for performance but because oopsie we miscalculated) - Entire teams built in the first half of a year let go in the second half - People with 10+ years of exemplary service dumped without even a phone call.

This is all also happening against the backdrop of low unemployment, high demand for tech labor, and a skills gap that's growing.

The analysis was of Fortune 1000 companies which typically aren't companies that would be suffering from long term declining performance which would imply the layoffs are a reaction to a short term fluctuation rather than a long term trend that needs to be corrected.

And I don't think the author is saying that laying people off won't balance the financials for that year or that quarter but that the ripple effects from a layoff can actually do more harm than the calculated returns.

- snap back attrition - loss of knowledge - opportunity cost - lost productivity from demoralized workforce

Nintendo is a great example of a company that when confronted with economic hardship due to bad strategy avoided layoff and instead reduced executive compensation.

https://www.polygon.com/2013/7/5/4496512/why-nintendos-sator...

Satoru Iwata effectively stated the same conclusions this article did that such moves might resolve short-term difficulties, but always proved counter-productive in the long-term. Long term thinking versus short term thinking not surprising for a company that has been around since 1889 and has evolved constantly.

It's almost like maybe investor sentiment and stock price is not a good metric for actually running a successful business. Just look at Apple this morning...

Revenue: $117.1 billion versus $121.1 billion expected

Investors are pulling their hair out because Apple only made $117 billion. Is anyone really going to miss that $4 billion? You'll hear investors and talking heads calling for corrective layoffs when in reality nothing needs to be done. They are still ridiculously profitable and will continue to be.

> Investors are pulling their hair out because Apple only made $117 billion. Is anyone really going to miss that $4 billion? You'll hear investors and talking heads calling for corrective layoffs when in reality nothing needs to be done. They are still ridiculously profitable and will continue to be.

I feel like this is hitting on something that hasn't been given enough attention: what happens when a company doesn't meet Wall St. "predictions". The consensus view (at least in the mainstream media) appears to be that this means that the company has "under-performed" and thus should be punished. But... why? Maybe the Wall St analysts were the ones not performing well enough? Where is the accountability in the other direction?

I wouldn't say it is being punished, it is merely the share price being readjusted based on the new information compared to the predicted information.

> "Is anyone really going to miss that $4 billion?"

Yes, the people who own the company will, i.e. shareholders. The majority are not some cartoonish greedy fatcats either; they're ordinary people like you and I who have retirement investments in stocks and mutual funds.

Moreover, if you think employees at FAANGs and big tech companies aren't on-board with this laser focus on share price, remember that a big, big chunk of their compensation is in equity, whether options, stock grants, employee stock purchase programs, etc. During the boom times, plenty of people in the software industry kept a live stock ticker feed on their desktops to keep track of how filthy rich they were getting and it was a frequent topic of casual conversation.

> The majority are not some cartoonish greedy fatcats either;

53% of all stocks are held by the 1% so yes Virginia the MAJORITY are some cartoonish greedy fatcats

FAANG and other big tech employees can earn in the top 1-5% annual income and can reach the top 1% net worth, which suggests that likely they're more aligned with the cartoonish greedy fatcats than any other worldview so I can't imagine why you think that would help your argument. Beyond that, while I have met a few individuals that I'd describe as villainous, I'd say the majority whom I suspected of that level of wealth were fairly normal and decent people.

I don't care how many stocks the 1% own. I do care that my own investments increase in value. So I want companies to make decisions that benefit shareholders (including me). Just because some rich guy makes $10 million while I make $10,000 doesn't mean I'd rather not make the $10,000.

If you buy and hold, then a company taking a short term loss to avoid long term consequences is in your interest. If you are a speculative investor, then circumstances are different.

> Moreover, if you think employees at FAANGs and big tech companies aren't on-board with this laser focus on share price, remember that a big, big chunk of their compensation is in equity...

The magnifies the short-termism problem, as employees - like In 'n Out investors - prefer winning battles in the short term, even at the cost of losing the war since they won't stick around the losing side beyond their vesting period.

I dunno, I have my retirement investments in stocks and mutual funds. Whether Apple earns 20B in profits or 24B in profits doesn’t make a whit of difference to me.

If they improve their stock price by only 1% this year so they’re in a position to improve it by 6% next year, then that’s a good thing.

Conversely, companies that immediately fire people because their stock gain was less than the 3% they expected, are too flaky to invest in.

Sure it doesn't matter too much if apple makes 4B more. But in aggregate if the whole market starts caring about profit significantly less it's going to slow down growth of your investments. And so 30 years from now when you earned only 2% returns you might think, "hmm I wish those companies had tried to be more efficient".

Well, maybe not since I live in a socialist paradise. If the whole investment thing falls through I'll just have less money, not nothing.

I'd love it if the market stopped caring about profits to much and instead focused on quality. We might actually get to a post scarcity society that way.

I think the crappy thing here is because upper management wants to plan a layoff in extreme secrecy, they put themselves in the position of not being able to consult with the parties that have the most context. The cuts end up being crude and poorly targeted because of this secrecy. Because the assumption is that an employee who is being laid off, or thinks they may be laid off, becomes a liability immediately, no knowledge transfer or hand meetings can happen, and people may abruptly be cut off from internal systems. The company then has some extra short-term issues from the remaining staff trying to cover for their laid-off peers while missing important information and context.

The responses to this post, of "we're adults that accepted an at-will employment contract" are correct. But if we all had that attitude, and if execs could treat staff like responsible adults rather than potential saboteurs, perhaps a more targeted, less disruptive and ultimately smaller layoff could be arranged.

(updated for typos)

Makes me wonder why employees are expected to give two weeks notice when they choose to leave, write docs detailing knowledge transfer, etc. Why can't we just "disappear", as if we were laid off?

Well you generally can't do that in Europe. I normally have at least one months notice which I spend documenting and explaining stuff to the people who'll be taking over.

That being said, I got laid off this summer (US style no more need for your services, all access revoked) and it absolutely sucked.

Additionally, there's a lot of really pissed off Big Tech employees, and it's gonna be interesting to see what happens as a result of these (almost entirely unnecessary) layoffs.

You can; no one's stopping you. People do it all the time.

This is not true at all in companies that know how to do layoffs. Layoffs in mature companies consult most of the management hierarchy and even many senior ICs and in addition engage the strategic planning teams to steer resources as needed.

That Google, the king of data driven, is flagrantly incompetent on this front is pretty funny, though.

With all things, in order to be good at something, one must practice it. Being Google's first rodeo, it's not surprising that it's been executed in a less than stellar manner.

I think this is an ideal, and new, cheery CEOs may espouse and even practice this to an extent. But, then I have seen these same owners become cynical after 1 or 2 bad apple employees and the demeanor shifts.

Once a company grows beyond a certain threshold of employees, then the probability of having hired saboteurs increases.

This is where social safety nets could play an important role in incentivizing folks to not worry, thus reducing the likelihood that they attempt to sabotage a company on their way out.

> Once a company grows beyond a certain threshold of employees, then the probability of having hired saboteurs increases.

But is the layoff really the first time having these employees was dangerous? If you can't trust your staff (and sometimes you can't) then don't you need policies even in good times that prevent them from doing dangerous stuff solo? E.g. the number of people who can drop your production users table should be tiny, merges to the main branch require a review+approval from someone other than the author, viewing PII data is logged etc etc.

> This is where social safety nets could play an important role in incentivizing folks to not worry, thus reducing the likelihood that they attempt to sabotage a company on their way out.

I don't think the social safety net is sufficient incentive. I think the components that create alignment are:

- severance is equiv to multiple months of _total_ compensation, such that people who are let go have a good shot at ending up ahead financially by getting a new job faster than that. For this reason, they're not necessarily even that upset.

- all employees, whether departing or retained should be _given_ some additional chunk of equity, possibly with some restriction which prevents them from selling for k months? Extending the exercise window is not enough, if some people have options which are underwater for that full period. Everyone then still has a material reason to want the company to do well. Retained employees who are likely asked to do more work do not feel that the departing employees got a better deal.

The dog analogy is terrible.

You should never, ever consider your employer to be your family. The employer is not your friend, nor a relative. They are your employer.

I really dislike the whole "let's build the team spirit and be a great family together" approach. It's dishonest, and often done with the (explicit or implicit) intention of brainwashing.

Also, this goes both ways: I was an employer for the majority of my professional life. I had the best intentions and tried to be "good" and a friend to my employees, only to get screwed over many times in various ways by people later on. I learned that a professional relationship is different from a family relationship, and while you should try to be fair, you should never confuse the two.

Interesting to see it from a (smaller) employers point of view.

Can you give some examples, ie how did you do things before getting screwed and what have you changed after?

What are your top lessons you learned?

I don't want to talk about specifics, because these stories involve real people. But some examples from the bad side: I've seen employees quit right after an extensive training period, disappear without a word, fake being ill for many months to get social security money, fake an illness to avoid a difficult assignment, and sue the employer for (imagined, not real) theft from a company that was going bankrupt. I've also seen people steal equipment from the company to pay for their drug addiction. All of this behavior was seen in people that the company previously worked with for months to years, and believe me when I say the companies involved were really doing their best to "be good" to employees. We're not talking Amazon warehouse jobs here.

More generally, I learned to treat the relationship as a professional one. I strive to be fair and play by the book, but no longer have any expectations of people acting "fairly" or "nicely" towards their employer. Similarly, I don't think anybody should expect their employer to be their family — business decisions are made differently from family decisions.

I should probably also mention that my disillusionment led me to starting a bootstrapped business where I have no investors and no employees, so that I don't have to depend on anyone.

All this doesn't mean that we all have to be mean or evil to each other. Everything can still be fair. But an employee should not expect a company to be "good to them", nor should a company expect an employee to be "good to them". There are business boundaries to how far "good" can go on the company side, and on the employee side there are people who err on the side of treating a company like family (wrong) and who treat the company as the devil incarnate (wrong too).

> You should never, ever consider your employer to be your family. The employer is not your friend, nor a relative. They are your employer.

I will add that their interests are often in conflict with the interests of the employees, and as such, in those matters the employer is best viewed as an adversary.

This was too dumb.

First, the intro with the dog analogy. If you remotely see your relationship with your employer as you being the beloved family dog, you're the problem.

Second, the author quotes a paper on downsizing in a journal and afterwards says, "[i]n all my searching I wasn't able to find any hard data which suggests layoffs either enable a company to better compete or improve earnings in the long term." However the conclusion of the very paper he references says, "[t]he findings of this field study indicate that downsizing can improve an organization's financial performance but not in the near-term.... [R]esearch strongly suggests that it likely will take three or more years for organizations to be able to truly see the financial benefits of downsizing." If you look at all the graphs in the Results section of the paper, it shows that companies who downsize started out being weaker performers than those who weren't downsizing, but a few years after downsizing they were largely able to close that underperformance gap.

Nice find (and makes sense).

I see it more from an investor perspective.

What do you read into a company that starts doing large scale layoffs even though it has a massive hoard of cash and remains massively profitable, just because some temporary trouble hits?

Given the company can easily retain the staff from a financial perspective, and employee churn is incredibly expensive - it has to mean they really, truly they can't think of anything useful to do with those staff. From that you would have to conclude that management and the board are simply out of ideas for how to grow the business.

> Imagine you had a dog...

Imagine that instead of a dog, it's an adult who makes their own choices and gets paid money, and who signed a contract where the terms of employment were spelled out very clearly..

And imagine you told that dog how much you loved it and how important it was to you, but only paid attention to it when it was misbehaving, fed it recalled Chinese dog food and avoided taking it to the vet, then decided to put it down the second it needed any expensive care. All the while telling your friends what a dog lover you are, and what a great relationship you have with your dog.

And imagine still, that instead of a dog, it was an adult, and you shake hands agreeing to hire their skills in exchange for regular payment, but when their skills are someday no longer required or adequate, and that day will come, the payments will cease and they will have to peddle their skills elsewhere.

That is totally valid for the fraction of companies that treat each piece of work as a transaction with terms agreed upon beforehand, and don't try to wheedle extra work/crunch effort with nebulous promises or talk of "loyalty" then deliver a sad token while enriching shareholders and executives.

I might be able to get on board with your ideology if your ideal was the norm and the second case the exception, but it's quite the reverse.

That’s the view of someone who is lucky to have many choices. Many people, in fact I suspect most people, pretty much have to accept what they’re offered because they don’t really have other choices.

For some of the people in these layoffs it will be accurate to say they could have made different choices, and for others it won’t be.

Imagine it was a contract where the only two options were "eat" or "not eat"

Nobody wants to really take responsibility of humans being able to eat.

the outside dog doesn't fight back. and neither do the dogs still inside. They all deserve it.

Companies respond to consequences.

> a contract where the terms of employment were spelled out very clearly

I was with you until that part. Do people exist who can imagine that?

A better analogy would be: imagine that you hired a gardener. And you were paying them every week to mow your lawn. But one day you thought, "hey I'm paying $100 for this guy to mow my lawn, but I could do it myself in an hour". And you told the gardener "your services are no longer needed" and started to mow your lawn yourself.

First would have to blow sunshine up the ass of the gardener, about how “we are a family and humans are our greatest resource.” ;-)

Posting social media videos of "a day in the life of FANG" company showcasing the little amount of work people do doesn't work either.

There's a lot of people at these companies who don't do anything meaningful and are getting paid a boat load. There's people like that in almost every company.

Back from the Yahoo peak days I had multiple people tell me that all they did in a week was fix 1-2 small bugs in a day and didn't do jack shit the rest of the week and got paid handsomely. Probably explains in-part the demise of Yahoo as a tech company.

My point is, layoffs typically target workers who are not needed by the company anymore.

People do layoffs in their personal life too. Your house cleaner or landscaper gets laid off when you decide to stop using their services as you try to do the work yourself and save some money.

This ultra-left stance on layoffs being bad is ridiculous. It's part of the business cycle and economic outlook the companies are facing.

There is a very interesting trend among white collar and tech people (or people at tech companies) being laid off and finding this so hard. Well, time to grow up, lower skilled labor experiences that regularly, and those of us who were around during 2008 or the dot com bubble experienced it too. Now a new generation is learning life is not always all roses. Funny to see it on social media so.

They aren't allowed to show videos of their actual work. So obviously they only show the parts that they can show like lunch or whatever. Most people at FANG companies work quite a lot in my experience.

The people posting those are usually interns...not to mention they'd probably get fired if they actually leaked videos of real work situations. So that's why all you see is the company perks like free food, gym or flexible work hours.

"the Cruelty is the Point"

https://www.latimes.com/business/technology/story/2023-01-30...

I do not see myself as a dog and my employer as my owner. It's a very weird/inaccurate analogy, and a bad way of looking at an employer.

Dogs don't choose their owners. Dogs can't leave their owners and find another one if they don't like the current one. Dogs can't educate themselves on which owners are more or less likely to value their skills, and aren't over-adopting dogs because it's the trend to do so in 2021, even though they're obviously not going to want to keep all these dogs around once their absurd growth rate slows down.

The layoffs suck and I hope the people affected land on their feet, but this dog analogy is nonsense.

"In addition, nearly one-third of the executives thought their companies terminated the wrong person at least 20% of the time, and approximately an additional quarter indicated that their companies made the wrong decision 10% of the time."

Within corporate decision-making, this rate is actually "fucking genius" level. This article doesn't say what it thinks it says.

Yeah an 80% success rate is amazing.

> You got the dog when it was young, trained

I get the point, but we are in the 21st Century. Very few people stay a Company (assuming stats are true) as they did before the 1990's.

In this case, the dog would have expected to stay in that home forever, where people in a company would probably move on after a few years.

This is a completely naive view of companies and how they work.

An alternative metaphor is this: imagine you got a dog, raised him, lost your sources of income and couldn’t afford to feed him. You kept him anyway out of pride or loyalty or whatever, and watched as he withered away without adequate resources to make him thrive. At the same time, others were looking for dogs and were fully willing to feed them and support them.

When companies don’t do thoughtful adjustments like layoffs, they end up instead in a cycle of slow withering, where the best resources leave and aren’t replaced, and the quality of the workforce slowly decays.

Layoffs may not be “fun” but they’re a necessary part of operating a successful company… and much better than the alternative.

That might be true in an imaginary world, but in the real world lots of dogs end up in shelters and some get killed because they can’t be rehomed.

During the pandemic lots of ppl got pets… acting on impulse. Now they realise a pet is a lot of work and it’s not for them.

This place isn't your home, these people aren't your friends and your executive leadership would run you over with their cars if you stood between them and revenue growth. Your relationship to work changes forever. You will never again believe that you are "critical" to the company or that the company is interested in you as a person.

This has always always been the case. Grow up.

I think you're being a bit uncharitable and jaded here. For many, events like these are actually the catalyst that causes one to "grow up", which is what the author is conveying.

Absolutely. Nearly everyone I know left college doe-eyed and ready to dedicate a piece of their soul to their shiny new job. Everyone learned otherwise one person at a time. Some worked for “we’re all a family” companies and were able to remain innocent ignorants till the day the axe fell.

> Absolutely. Nearly everyone I know left college doe-eyed and ready to dedicate a piece of their soul to their shiny new job

When did you graduate college? In the social media era, the sentiment has been more about "fuck you, pay me" and "H.R. is not your friend" type ideology. This is especially true in recent years, where a lot of college graduates have been exposed to years of /r/antiwork in their daily Reddit browsing before they even get their first jobs.

A lot of juniors want to do good work and produce good results, but it's common for them to believe that corporations are evil, capitalism is a failed ideology, and that it's virtuous to minimize their labor input while maximizing their compensation. It can take a while to convince some of these new hires that as their manager, I'm a person too.

This business about “fuck capitalism” and so on is also infantile, just in the opposite direction.

That's an assertion of belief, not a statement of fact. You'd have to bring arguments why the interests of workers and owners are congruent (which they are not).

I don’t need to do any such thing. Just point out that no reasonable alternative has been proposed by anyone and conclude that it’s therefore infantile whining.

German-style Rhine capitalism with co-determination for labor unions and a robust social safety net that isn’t even as leftist as the Scandinavian countries.

It’s still capitalism, so if you want that why are you going around saying “fuck capitalism”?

Scandinavia has capitalism too, welfare capitalism, sure, but still capitalism.

Who said I'm going around saying that? But it's still a reasonable alternative to the form of capitalism currently practiced in America. So you are incorrect in saying that nothing is being proposed.

People can hold a lot of cognitively dissonant but valid viewpoints at the same time.

I put effort into my work because taking pride in one’s work nourishes the soul.

I try to meet my manager’s expectations because I know him, he’s a good guy, and I know he’s got my back to the extent he is able to.

I also know that my employer as an entity abstracted through a dozen tiers of hierarchy would feed me and my manager both into a woodchipper if it would increase quarterly gains more than the alternative would.

I work to minimise how much of myself I give to my employer, and maximise how much I give to myself and to the relationships I value (which still includes workplace relationships!).

You being a person is not mutually exclusive with any of those other sentiments. They are able to coexist.

After WW2 they found out that a lot of the Germans who commited war crimes were completely normal and decent people just following orders. Managers aren't bad guys but they WILL follow orders.

Yes, be a good German, right?

You can say no… I did when my then boss asked me to fire people because he personally didn’t like them.

Yes, I am older than that. I truly feel for a lot of the younger people who came of age during pandemic isolation and raised by YouTubers. I work with some of them and they are not having an easy adjustment into adulthood.

Good on you for putting in the effort. The corporation cannot be your friend, but a good manager can be.

> it's virtuous to minimize their labor input while maximizing their compensation

It's not? That's what capitalism is. More productivity with fewer inputs.

> It can take a while to convince some of these new hires that as their manager, I'm a person too.

However the company is not a person - RMoney be damned

The Dilbert comic strip has been running since 1989 and was about the life of engineers at something that nominally looked like a tech company and, even then, people were remarking that a lot of its humor worked because it was true. If anyone graduated without the awareness that the working world wasn't going to necessarily be all rainbows and unicorns, they weren't paying attention.

And yet people are willing to give a lot of credence to pointy headed bosses, as many discussions on HN will attest to.

It's almost like... people really want to find meaning and purpose in an occupation, community in the place they spend at least half of their waking hours, and work they can be proud of. How... immature?

I agree that the present society cannot generally fulfill these wants/needs.

> "we’re all a family"

... that's why our valued Craptech employees should not be surprised if they are subject to abuse, estrangement, abandonment, financial hardship, mistreatment in care homes, abortion or termination of life support, etc., concurrent with our expectation of absolute loyalty at the expense of happiness, health, and sanity. And of course our gender pay policies are modeled on domestic work.

You know who was a bit uncharitable? The people saying “okay boomer” to the Bobs of the world when they kindly tried to share their experience.

I'm curious about this. My experience is that people in my age bracket (early 20s) have been saying "okay boomer" to the people telling us that being in your 20s and 30s is about hustling to show loyalty to your company, showing up at the office five days a week, ingratiating yourself with your boss, spending late nights at the office and being buddy-buddy with all your coworkers. I have never ever witnessed anyone employing this phrase as a response to someone's pessimism about the capitalist society we live in.

Trying to make it about capitalism is also silly. Those rant and rave about that have no alternative to offer. At best they suggest Scandavian style welfare capitalism, which has capitalism right there in the name, but call it socialism because it sounds cooler.

They should grow up too.

Hot take but I think everyone is allowed to recognize the cutthroat, impersonal nature of corporate hiring and firing and commiserate about it without needing to walk around with a fully-formed proposal for an alternative economic system in their pocket.

I may try out gp's approach with the next adverse code review I get: "While my naming is generic and the code difficult to understand - it is the best solution to date. Stop whining and provide your alternative diff before I can take your criticism seriously"

Really not an alternative diff but a pathway to transition to an alternative codebase built on an alternative development methodology with strong guarantees that said methodology could not yield code that presents problems resembling the ones in your PR.

Thats unfortunate because this is a lesson you should learn much earlier in life. Like, how do you get to adulthood not knowing how the world works?

And it’s just one of many ways people can come to realize this over time.

I’ve been fortunate enough to avoid the experience of layoffs, but learned the same lesson by pouring too much of myself into a role and burning out.

Until you’ve directly experienced the reasons work isn’t a family, etc. it can be hard to avoid falling into the trap of thinking that it is.

I would also say that most takes on this are a bit too binary, and some of my longest lasting and strongest friendships came from past jobs. I think the key to use work as an opportunity to establish those relationships instead of a ready-made support system, and not extending the personal aspect of those relationships into workplace behavior (e.g. doing more work because it’s “family”).

Burning yourself out sucks, but is not an equivalent experience to being laid off. Not sure how you came to this conclusion.

I'm not claiming it's an equivalent experience.

I'm saying that burnout was my path to thinking differently about my relationship with work.

Burnout is a whole other beast, and recovery from it a whole other topic.

I don't know if I agree that "growing up" and "becoming bitter and cynical" are the same thing. Getting more bitter as you age might be something to work on with a therapist, not something to aspire to.

They aren’t telling you to “become bitter and cynical”, they’re saying to be realistic. Life isn’t fair, and part of growing up is realizing that.

I agree.

IMO its worth mentioning the reality of the employee<->corporation relationship because MANY companies in both tech and outside of tech have long tried to sell employees (particularly junior ones) on the idea that the company is a big family (without really acting like one beyond a very superficial level, eg. enjoy the free costco snacks, and or catered lunches/dinners when you're here for 12 hour days building value for the family!).

When you're a bit more experienced its easy to be more realistic about this relationship due to seeing that lie revealed a couple of times on a personal level, but that doesn't mean its not worth pointing out and talking about the lie.

While I agree with this perspective, these companies go out of their way to market to their employees to make the job their whole identity. They are not blameless.

Burger King ends every commercial with “you rule!”. I don’t believe them and build my life around what they say either.

So you spend a good portion of your waking hours at Burger King and feed and clothe yourself from the money that you make there?

This is true, but I think it's misplaced to bitterly place this on the individual.

I have worked at multiple companies than have disingenously referred to themselves as "family," always talking about "supporting your growth here," etc. It's just outright dishonest and for whatever reason it's the industry standard. Can't blame people for taking it at face value for a few years.

And honestly, one generation ago (and in certain fields like police), your work is a permanent group of supporters. It's not like such a thing is impossible.

Four years of high school and at least four years of college, both generally requiring courses in history and literature. Sometimes also psychology, philosophy, rhetoric, and/or logic.

On paper these are extremely well educated people from top institutions that boast about producing well rounded individuals.

What happened?

Agreed. This is a naive point of view. The company and worker agree on some terms and if the terms stop working for either one, that's the end of the line. It sucks when that comes to be but we have to realize that we as workers in any capacity are only useful when our input aligns with the goals of the company. There is leeway, but that diminishes when time gets tough.

Blue collar workers, union or no union, always understood this. It's white collar workers who feel blindsided because they believed the company propaganda. The propaganda is not itself a bad thing but workers need to understand the use of propaganda and why it's used.

If you've ever worked with blue collar workers you know they never believe in any of the sunshine management talk and instead deride it with contempt. White collar workers would be well advised to learn from their blue collar brethren.

As Mark Twain put it, it's easier to fool people than to convince them that they have been fooled.

There are those white collar who realize that along the line, those that brace company propaganda and turn carrierist and those that stay naive to be abused by the second group.

There is a reason I get along better with blue collar folks than, especially the more inexperienced, white collar ones. Usually, blue collar folks have less problems following "orders" as well. This professional discipline makes a lot of things a lot easier.

If you think work and your coworkers are friends or family, you’re in for a world of hurt.

I've worked at two companies where people pooled vacation time for sick co-workers who had already been granted extended leave time by the company way past the company norm when they got cancer. If that is not an act of friendship what is it? I've worked on a team where we scheduled our production schedule and the company their release schedule for a year around making sure a co-worker could go back to their country of origin for a couple of months. This was neither a technically irreplicable nor senior individual but they were valued because they were part of our team. When I had kids my coworkers surprised me with a ton of baby clothes. Those people were definitely my friends and we definitely had each others backs. I've been to more work friend's weddings than any other weddings.

I burned out and crashed and burned, but it was more about me finding my self worth in work and the need to be superman and get that recognition and then later to keep funding a lifestyle that I again has substituted as my value and self worth.

> I've worked at two companies where people pooled vacation time for sick co-workers who had already been granted extended leave time by the company way past the company norm when they got cancer. If that is not an act of friendship what is it?

It is a sad attempt at compensating for a missing social safety net.

True, but it is still an act of friendship.

It may have always been the case but it's often cleverly disguised intentionally by companies so they can exploit workers (especially in more white-collar environments and even more so in tech startups), so it's not exactly surprising that at least people would be caught unaware.

Grew up with parents working in startups/small tech companies in Santa Cruz from the late seventies through the 2000s. No, it has not always been the case. It's sad you are happy to accept it as both acceptable and the norm. Grownups realize they have the agency to choose the environment they place themselves in and choose to spend the majority of their day somewhere not adversarial.

> your executive leadership would run you over with their cars if you stood between them and revenue growth.

This is ridiculous. I’m sure such sociopaths exist but there’s literally 30MM+ companies in the US. If only 1MM have an executive team this proposes there are millions of near murderers about. Pretty sure there’d be more murders.

It’s stupidly hyperbolic and actually implicitly assumes that which it purports to reject. Namely, it conflates job loss with death, giving companies more agency over your life than they actually have; the phrasing ignores its own first statement, in pursuit of clickbait nonsense.

Deriding the need to belong and do meaningful work is quite cynical and… immature.

Not everyone is in a situation where the only option is to harden their shell and submit to a corporation. Some will find a family or great friends at work. It might mean limiting your career choices, but it is not a character flaw.

Layoffs work, I just think companies tend to layoff the wrong folks.

I had 7 layers of management between myself (IC) and the CEO at my last job with just a couple thousand people. How much of a “multiplier effect” can those people truly have? What ended up happening was feature creep ran too large, the company scrambled to hire engineers to keep up with pace of development, then the debt caught up with them once interest rates blew up.

Honestly, layers between ICs and CEOs should be logarithmic. 0 layers for 10 employees, 1 layer for 100, 2 layers for 1000, etc. IMO the “multiplier effect” ends with line managers

I think this is how Starbucks manages their ~120k US employees. They keep a max of around 8-12 direct reports per manager as their policy.

Sure but in practice ICs are like ~90% of employees. So it's hard to not have them be the bulk of any layoff.

The Steve Jobs quote makes me hopeful that Apple won't follow their lemming peers off this cliff.

Hopefully the payoff for Apple is significant and obvious so that at least some learn the lesson in the article.

This is obviously false. Layoffs do work. 2003 - 2007 is not a sufficiently long enough period to assess layoff impacts on a company.

For example:

>Apple Computer Inc. said late Friday it was slashing its work force by 4,100 in a last-ditch effort to save the troubled computer maker.

> Out of the total number affected, about 2,700 are full-time workers. The remainder are part-time and contract employees. The cuts will affect about 30 percent of Apple's work force. Fifty-five percent of the job cuts will be in the United States.

(Source: https://money.cnn.com/1997/03/14/technology/apple/)

This is from 1997 in the pre-Steve Jobs era when Gil Amelio was CEO.

You can call it what you want, but if that action didn't occur at that time, Apple as we know today may not have existed.

I am picking Apple as a deliberate example because they are the the only big-tech company that hasn't announced a large scale layoff (yet). So, many people may be quick to jump to point out, "Look Ma! No layoffs at Apple".

For a large corporation, business cycles are a reality and layoffs become part of the tactic. It is very unpleasant for the people involved. But, that doesn't mean it doesn't work (in the long run).

None of the large tech companies conducting layoffs have had their back against the wall.

They are mostly just purging after their irrational pandemic hiring as well as doing galaxy-brained copycat layoffs. Isn’t it remarkable that “economic conditions” lead dozens of companies to need to cut the same 5-7% of staff?

I agree with you that the pandemic era hiring went off the rails. We don't hear any media mentioning The Great Resignation anymore. It is all just doom and gloom.

Labor cost is the major cost driver for big-tech. They just decided to axe that because that is the quickest way for them to impact costs and conserve cash when revenues are expected to drop, stay flat, or at best grow very slowly.

At best, they are right in their economic activity projection, it slows their revenue and profit growth (they will still be profitable). At worst, they are wrong about it and the revenue and profit growth is not slowed (a good problem for them to have) and they can just resume hiring.

Regarding your comment on companies not necessarily having their back against the wall -- unfortunately, this is behavior is quite common. Companies don't have to be bleeding in their P&L to take layoff decisions.

I feel what you're putting out and hopefully one day we will be a better species. I worked for a company in 2013 which will always be the benchmark that I compare other companies against. They treated me like a person that mattered and the members of my team were definitely my family. The company cared enough to give everyone catered breakfast and lunch, massages twice a week, a game room, and the freedom to work on projects that mattered to us. I had to complete a briggs myers personality test in the beginning, came back as ENTJ. HR brought in a coach to talk about how I can apply my strengths internally to make the company a better place and how I can personally grow. It was a great experience and I doubt another company like this exists. I spent 3 years there as a linux sys admin (it became devsecops towards the end). I grew more in this job than I did in any previous position I held. When I was laid off, I started questioning my self identity and went thru some serious depression of missing my co-workers.

What company was this?

Having a single source of income is becoming more and more problematic in current times. If you are married you have at least two sources of income, that may be the biggest _economic_ advantage of the marriage. Those layoffs make me realise why so many people are interested in FIRE movement and passive income. Either you have savings (but fiat currency discourages that) or some source of extra cash flow (be it minimum that allows you to survive) or you are at the mercy of current economy climate (be it FED printing or FED tightening or stock market frenzy). Maybe the universal basic income will be come the solution to this problem in the future?

With more automation and unstable world economy we will probably see more layoffs. Entire industries may go extinct.

Yes I am on more pessimistic side, but the last decade was great for software engineers and as the Bible says after 7 good years there may be 7 bad years coming.

As long as we continue digitizing the economy, there will be a demand for software engineers. What might change is the kind of software engineers. Luckily, software engineers can certainly cross train and quickly pick up new skills much more quickly than workers in other industries, and for massive payoffs.

I do think its somewhat unreasonable to be in a position where you do similar work year after year though (similar to e.g. what doctors or lawyers do) and expect to keep getting the same income. That's the deal with Software (or really, any creative field): you get paid really well but you can't stagnate.

> Coming up with a scientific way of determining who is doing a good job and who is doing a bad job is extremely hard.

In fact, it's probably impossible.

On the other hand, everyone knows who the deadwood is on their team.

> Cruel

I know multiple instances of coworkers getting laid off, and being very angry about it. But a year later, they'd ruefully admit the company was right to lay them off, and they had been pushed off-center and decided to do what they really wanted to do - like start a business. More than one was laid off for coming to work high, and as a result got clean. They were, after a year or two, all better off and happier than before they were laid off.

> Imagine you had a dog…

I used to have a dog.

When I had to get rid of her I ended up in the VA mental health ward for ten days because I tried to shoot myself in the head, not completely because of the dog (becoming homeless helped a lot) but I’m pretty sure it was a significant contribution.

To top it off if you take “a dog” to the pound it’s free but if you take “your dog” down there it costs $80 so the poor little thing lost her name because I didn’t have $80 so she was “this dog wandering around the neighborhood I found”.

One of the hardest things I’ve ever had to do was get rid of that dog and I’ve done some pretty hard things in my life.

Tell me more about your coworkers being out of work for a couple months before finding that next job.

I think Amazon, Google, and Meta workers should band together and get funding to start competitors to these companies. If there were some smart investors, that would be a great way to start a new company.

I suppose if there were backers who would issue loans instead of investing in equity, the workers could form a cooperative. I don't think that would fully eliminate the risk of them getting fired (by each other), but perhaps it would be a start?

I've worked for Amazon and have friends that work for Meta. As much as it pains me to say it, I don't think that as a whole those who were laid off would make a very good company. There are exceptions, like I think Amazon made such heavy reductions in the Alexa org that there were probably some very competent engineers let go. But mostly the layoffs affected (1) HR and product, (2) low performers, and (3) people with very little political savvy. This doesn't sound like it would make a good company.

Point 3 is fine, wasting all time and energy being political has nothing to do with contributing to the companies end revenue stream.

Think the manager who does nothing, but is a smooth/shit talker, hence is very let go. Does and contributes nothing except for the moments they have to.

The thing is they kept everyone from the 2-5 main teams that actually run these companies. And what sucks even more is those people don't know that they are so critical and worth millions if not billions each.

That’s a great idea! We just need to write a design doc for the company, get comments, write up resource usage tickets, pass it by ux, contact sales for input, iterate on a new design doc because the old one used an outdated framework for business organization, get the final business plan doc through our autolinters, and setup 6 automated tools to track our progress - then we should be ready to contact some VCs.

Should only be a handful of quarters - if you don’t count time for retrospectives and writing packets about how complicated and impressive the process was ;)

That is what happens. That is the cycle. Also most will fail and the ones that don’t will be bought by the monoliths.

Disclaimer: I am NOT advocating for layoffs, I do agree with their cruel nature. However, this comment in the article is ignorant:"Sure, except presumably at-will employers could have done that at any time if they had hard data that suggested this pool of employees weren't working out."

Here is why. Just because someone is at-will doesnt mean the manager has the power to fire someone without any repercussions. Management can be a political house of cards and "layoffs" is a safe blanket to wipe these people out.

case 1: Another deadweight case is to rip through the relational bias. Fred is a very nice guy and he does an OK job, but could the market provide someone else cheaper and/or better than fred? since hes not excelling lets roll the dice and find out. Fred wouldnt normally get let go because hes doing just the bare minimum to get by and there is no case for such a thing.

case 2: manager is incompetent(say it aint so!) and is hiring the wrong people. What a mess! how do you deal with that?! Time to clean up the whole department and start fresh.

The obvious downside of layoffs is that all too often, talented, loyal, and undeserving people get caught up in the mix, but at least management "feels terrible about it"

I find it serves one better to deal with feelings directly. Going on such a long roundabout is a distraction. Do we really care about how large companies deal with their problems? Are we running one, do they depend on our judgment? I think not.

So, the more straightforward way is to realize that one has been fucked over. At first it doesn't matter who's responsible for that, just the fact that one feels that it happened, and that it feels like shit. Talking to people about that helps. It someone is worth their salt, they'll tell that this has always been the case - the one that cares about a person the most, and especially the one that can do the most, is the person themselves. And another important realization is that most of the time, this doesn't happen because of specific cruelty - most of the time, it's ignorance. The other party didn't care to consider the impact of their act, and that is normal. There's not enough energy to care about all. And even if we care, sometimes things must be done. Or we need to take part, even if we know the impact and don't want that.

I do believe that this all doesn't need to make one jaded and cynical all the time, about life and people. In fact I believe the opposite: that one needs to find a way to love all this, in spite of all of these things working in such a way. After all, to love, one needs to know. Because if one doesn't know, they don't know what they love in the first place.

> A common argument I've heard is "well ok, maybe layoffs don't help the company directly, but it is an opportunity to get rid of dead weight". Sure, except presumably at-will employers could have done that at any time if they had hard data that suggested this pool of employees weren't working out.

I'm guessing letting an individual go carries higher risk of a wrongful termination suit than a bulk layoff, so there is still an incentive to mask performance-based decisions with economic justifications.

I think the way they’re structured in most orgs is dumb for the org.

Layoffs should be an opportunity to embrace and accept the Peter Principle and lower a series of people down a rung until you layoff the least valuable person.

Of course that only works if managers/directors/seniors/whatever can do the job immediately below them. I think they should but many places think “a manager is a manager and can manage any kind of team” which I think is bunk.

There isa logical conclusion of this: The quality of an individual's work is irrelevant in a bigco.

1) It is generally accepted that the best people leave first in this kind of layoff. But 3 years later, the corporation is doing as well as the others. Hence, removing the best people does no damage to a bigcorp.

2) A post in this thread describes how regular aggressive layoffs turn the culture toxic, setting people against each other. But one common response in nature is cooperation: people form a clique, and exclude colleagues who could damage them. They make nonmembers perform badly by e.g. witholding information. This sers outsiders up for being laid off. An evolutionary pressure selects for people having the political prowess to survive layoffs, and against good performers which endanger the status quo.

So a bigco's level of performance does not depend on having good workers. Instead, all this points to the work performed by the worst workers to be the major determinating factor for success.

Companies don't care if layoffs work. They are confident that when the time comes, they will replace the dismissed with other employees. Whether the new hires will be as efficient and skilled as their predecessors is, of course, a question mark. But they don't care. Please stop thinking of companies as emotional creatures. The only thing companies care about is money. Who cares people.

But decision-makers at companies frequently make irrational decisions, or at least decisions that are irrational based on their stated objectives. "Only caring about money" doesn't necessarily mean you make the best decisions to earn more money. Look at how many sports franchises have desperately wanted a win and then made a lot of atrocious decisions that did not achieve that -- why would we think that's the only field of human endeavor where that happens?

Whether it’s good or bad for business, the practice of layoffs is becoming more widely accepted. This can serve as a reminder to employees not to become complacent, which is one reason that companies do it. An unfortunate consequence is that employees become more likely to game the system to keep their jobs. Gaming the system can take many forms : avoiding risky assignments, covering up chronic problems, and blaming others. Once people see that these approaches result in greater job security then the incentives for doing the right thing become obscured. At my last job, a cyber-security startup that had a large layoff, this process of gaming the system ruined the software engineering culture. No one wanted to fix a bug, or talk to a customer, or implement a new process, without first checking to see how it would affect their job security.

Layoffs are like going on a diet: in the short term companies are able to maintain discipline through a mixture of execs getting their feet held to the fire by shareholders and employee panic. In the long term, execs are gonna do the same old shit that they always do.

The execs will never stop doing the same old shit. They will still fly business class and have concerts with Sting (ht Satya). The only change is that they will temporarily work everyone else harder.

How do you define "don't work"?

It depends on what goals you have.

Sometimes products, services, teams and organizations are not aligned with the business strategy, and have to be restructured.

Sometimes there are locations with a high cost of life, but the value generated at those locations are not proportionally higher.

Sometimes you have outliers in the compensation distribution that no longer meet productivity expectations. Some individuals make key contributions and then stop making them while enjoying the same benefits.

And sometimes you have pseudoscience like "Vitality curve" style layoffs which are proven to make things worse.

It seems to me that many tech workers are experiencing, for the first time, the hard reality that:

a) Companies may be formed, operated, and controlled by people, but they are complex systems that do not have feelings and do not care about individuals no matter how much the culture warriors say otherwise. They are systems designed to survive, with or without you.

b) We are not defined by our jobs

I'm not making a case one way or another for capitalism, or layoffs, or the meaning of life, rather pointing out that this is the reality in which we live and once you realize these two points, things will make more sense.

The default state for a company is to produce a yearly layoff. This has been dramatically reduced since gen y hit the work market because they were leave the company instead of stressing and they were important as they were bringing the tech power to the industry

Now they are getting old and there is no short of people to work on tech so the cycle restarts.

Honestly if I do get in a company that practices this I will quit. It has done horrors to people close to me and they will never recover.

It had nothing to do with genY tech acumen, which is lower the previous crops on average due to weakening curriculum standards and a lack of experience with technology in any deep way, it was the firehouse of free capital and a “starve the competition” model employed by the FAANG constituents that it helped fund.

Clearly the only good answer here is that tech companies should never have employed so many people to begin with. These tens of thousands of people were paid massive salaries and equity only to have that cruelly taken away when the company realized years later it can’t sustain all those projects.

I implore these corporations: Please stop hiring so many people if you can’t guarantee lifetime employment!

It was always going to be either layoffs/comp cuts or no big bubble in salaries and hiring to begin with.

Surely there's much worse to come? Look at how much compensation came down in investment banks since the 00s. It's not conceivable that these large firms require tens of thousands of geniuses to function.

Well it depends on the kind of business you are running.

It seems that nowadays software companies mostly work on modularized toy problems that new grads can solve effectively.

If you go to the chemical industry that is not the case. Layoffs in senior personnel will bite you within months.

Most of the people working on glue code are already at risk to job migration to HCL, Wipro etc.

Crazy seeing some of the comments in here supporting the layoffs when just a few decades ago people were up in arms about IBMs layoffs because working for one company for a significant portion of your career was seen as the norm.

Maybe it's not the same people?

Between the tech layoffs and ChatGPT enjoyers of dogshit think pieces are eating good.

> In general, the study found that both downsized and nondownsized companies reported positive financial outcomes during this period. The downsized companies, however, were outperformed consistently by the nondownsized ones during the initial two years following the downsizing. By the third year, these differences became statistically nonsignificant.

But in the absence of layoffs perhaps those companies would have done worse. Therefore we could easily argue that this does not contradict the claim that layoffs do work. In particular layoffs are not meant to make a company grow faster than other companies, they are meant to prevent extreme bloat and inefficiency and get back to a normal baseline. So if we assume that context the data makes more sense.

If your employer is a corporation and you are loyal to them, I'm sorry to inform you but you are very gullible and naive. Be loyal to people and be loyal to principles instead.

Layoffs are cruel and are often done poorly.

It is really hard to say if they work or not since there is no consistent reason why they are done and picking some external measure doesn't prove much.

This is dumb. Dogs don't cost $100k per year to keep in the house. Dogs don't cause the owners of the house to risk loosing the house due to the dogs expenses.

I'm not surprised that someone who thought corporations were their family wrote an article about how layoffs don't work.

If you're looking at layoffs as a way to reduce costs short-term they do work, even accounting for severance.

The higher educated white collar class is coming to terms with the fact they are just as disposable as the rest of us.

Which class do you relate to and as a function of which type of job?

We are all workers, we are the working class whether we are educated or not.

The capital owners want the working class to fight amongst themselves because it allows them to continue enriching themselves off the backs of the working class.

Even if you own some stocks or have a 401k, if you depend on a salary to pay your bills then you are a worker

It annoys me in the UK how people claim that "Tommy who 'does up houses' and flips them or rents them out" is a "working class builder", where as Billy isn't working class because he types on a keyboard.

In the UK working people, especially those earning above minimum wage, are taxed far more than the capitalists of the world like Tommy who can structure his income to pay just 30% marginal taxes rather than 60% plus.

Honestly it's the same in the US. But unfortunately the ones who fund the political campaigns are usually the ones with the lower tax rate, so that doesn't change.

Actually there are different levels of working class. A guy earning $18k per year working in retail isn't exactly in the same boat as the manager of the store making $80k a year.

That was a story made up by capital owners to keep the working class fighting amongst itself. The reality is that anyone who works for a wage is being taken advantage of

I have > 500k net worth which using the 4% rule gives me 20k a year but I still work. Am I a capitol owner or working class?

If you can quit your job and live purely off your investments then you are a capital owner, if you cannot do that without adjusting your lifestyle you're working class

It's called being middle class. middle class != working class, But i don't expect you to be able to see through the decades of propaganda.

Again, middle class is a concept invented by capital owners to keep the working class fighting amongst themselves. If you depend on a wage to survive, you are a worker

Working class is defined as those who must sell their labor in order to survive. If you cannot live off income of your investments alone and must work for a salary then you are a worker, you are working class

The middle class are those who have the capital to be capitalists to some degree, but not enough capital that they can live entirely off that capital, still requiring some kind of job to make ends meet. Someone earning $18k per year at their job could be middle class and someone earning $80k per year at their job could be working class. Their job income doesn't tell us anything with respect to their capital holdings.

Exactly. Since reality has now hit them in the face after the VC fuelled tech bubble utopia that finally popped with the cheap money disappearing afterwards.

So what of the conditioning of employees by telling them: 'We're all a family', 'Sticking together in the long term!' and 'Everyone wins, yay!'. I don't think 'families' do abrupt layoffs en mass to their own in the morning.

The era of cruising on cheap money is over. It is time to learn to adapt with AI.

Everyone is disposable all the way up to the CEO.

> The downsized companies, however, were outperformed consistently by the nondownsized ones

I think this misses a piece of logic. A reason companies downsize because their growth plans didn't come through. Like at the moment where tech companies scaled up for the pandemic imagining growth would continue at that rate.

So now we are saying that companies that made a sound strategic plan perform better than companies that had to rip their plan up and start again. Layoffs are the effect, not the cause.

It is childish to say that layoffs don't work. When a company runs out of cash it dies. Losing staff is hard, but if you can't afford them you can't afford them. Most managers hate layoffs too, even a psychopathic manager would see it as a failure.

So whilst layoffs may set back your plan, at least the company survives.

For clarity, there is no excuse for being shitty to staff during layoffs. US labour laws seem particularly weak in this area.

This writes like a Reddit employee who is butthurt about a layoff.

If layoff doesn't work, hiring wont work either.

Let's grant the argument. Layoffs can still serve employers' purposes in other ways. Have you heard of a lot of climate walkouts at big tech companies recently?

Companies need flexibility, markets are more free and efficient allocators than central control, and people don't all deserve the same wealth because some people are really doing more useful things than others, but we have the capability to provide everyone healthcare and enough money to live simply and comfortably no matter how productive they are as individuals simply because it improves the condition of life and we don't have to become communist to do it.

If you think layoffs "don't work" you have some kind of fundamental misunderstand of what a layoff is.

I think it's a huge mistake. The great labor shortage is just beginning. You can thank the retiring boomers for that. (And I hope they enjoy their retirement!)

There is no way to make a mistake here because there are essentially no consequences -- entities of this scale can rehire as easily as they fire.

At a lower average compensation rate too, most likely. These companies are basically refinancing their labor force using cruelty and fear. It is working because they're all doing it, because we let them. System working as intended.

> At a lower average compensation rate too, most likely.

highly doubt it. The labor force is shrinking. There's already a dearth of talented software devs. And then there will be huge upward pressure on wages from lower level jobs that now have to pay 20$ an hour to get workers.

People have been saying that for 50 years and it hasn’t happened in the US. Upward pressure on wages will result in interest rate increases to manufacture unemployment and keep wages down.

It's happening right now, in front of our very eyes, as predicted. Once the population shifted, it would happen. Here we are, take it in.

> entities of this scale can rehire as easily as they fire.

It's not exactly true. It actually takes quite a long time to hire competent employees, particularly more senior ones. Hence why it was so hard to hire in 2020-2021.

There is no such thing as a labor shortage. There are just insufficient wages.

This statement is missing qualifiers.

Consider the extreme counter-example: A small village of a dozen individuals sitting a top a mountain of gold is unlikely to be able to operate an industrial scale gold mining operation.

There can be too few people to do certain work. Nuclear plant operators. Ordinance disposal experts. Electricians in my area...

but hold on. "not having people" and "not having people with the skills you need" are different in this regard. Offering more money won't make more people, but it will motivate people to learn skills.

Sure but in the interim (while they're learning skills) you don't have as many as you want of nuclear reactor operators AKA a labor shortage.

Whether or not the real world has a true labor shortage or just a shortage for the current market price is not shown. i.e. if you offered more wages would some stay at home parents meet the demand?

There is a shortage of qualified and decent labor. Bodies <> Labor

That isnt true.

If the demand for brain surgeons doubled overnight, no amount of wage hike is going to magically double the supply of brain surgeons.

Sure it won't double it overnight, but if we give people enough time to train (4-8 years?) then I think it would have a significant effect. Though this example is poor because the quantity of new brain surgeons is restricted by various regulations and agreements (so we'd also have to assume those went away).

If you look at an unregulated field like software I think it's pretty clear that the huge increase in demand from ~2008-2020 did result in a huge increase in supply.

Right, so shortages can exist for any skillset that requires more than a few months to acquire.

In what way is it a mistake? Do you mean that the companies will suffer for it?

How many tech employees are boomers though? The youngest boomers today are 59 and IME 99% of tech employees are <55. Indeed I'd be surprised if boomers retiring had any significant effect on tech given most of them have already retired.

this satire of a laid-off techie being interviewed is going viral https://www.youtube.com/watch?v=Nivva7G1XFw

I think layoffs are a social contagion in a lot of cases, an excuse to overcorrect for overcorrections and all of that but...

the cruelty is the point.

eta: if the economy at large is adding 500,000 jobs as reported today this makes the laying off companies look either foolish or somehow specially in a downturn.

If they don't work, it's probably because they are too late. Every company I've worked at has had a bunch of people who don't actually work.

One example: I was talking to someone at a social event and they was complaining that her company had laid off so many people they was doing the work of 3.

They then went on to say that they was running two fantasy football leagues.

I asked them what kind of computer they had at home and they looked at me confused and said "oh no, I don't have a computer at home. If I did then they would expect me to work some there too"

From that I realize that they (singular) was doing the work of three people and running two fantasy football leagues in their eight hour work day.

This may be exceptional, but with all the talk of quiet quitting, and all the other observations of people not working at work, I don't think it's all that rare.

Maybe they ran the two leagues together with two colleagues before ;)

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