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“Today I cut my pay to $0. I'm committed to laying off 0 of our employees.”

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Re: “Today I cut my pay to $0. I'm committed to laying off 0 of our employees.”

#111

Post by nostromo »

praptak wrote: post #34
brenden2 wrote: post #7

What I've been hearing on the internet is that companies are racing to lay off as many people as they need to now, before applying for their free bailout money from the government. It also sounds like businesses are trying to lay off more than they actually need to lay off, in order to get the maximum benefit. The terms of the bailout loans are such that they can lay off people before they apply, get the money, and s…

"And the principle of really existing free market theory is: free markets are fine for you, but not for me. That’s, again, near a universal. So you — whoever you may be — you have to learn responsibility, and be subjected to market discipline, it’s good for your character, it’s tough love, and so on, and so forth. But me, I need the nanny State, to protect me from market discipline, so that I’ll be able to rant and r…

First, this is nothing like 2008, to which it's being compared.

In 2008 you had misbehaving companies taking huge risks with the (correct) assumption that they were too big to fail.

But what we have now is the government forcing businesses closed. It only makes sense that the government provide some assistance to those companies.

It feels great to quote Chomsky and to feel morally pure, I've certainly done it. But the truth is you would not like the result of that purity should the government follow that advice. The Federal Government and Federal Reserve acted in a ideologically pure fashion in 1929, and it caused a depression and hurt working people the most.

Secondly, we do have assistance programs for workers that have been laid off.

Re: “Today I cut my pay to $0. I'm committed to laying off 0 of our employees.”

#113

Post by qqqwerty »

zaroth wrote: post #44
brenden2 wrote: post #7

What I've been hearing on the internet is that companies are racing to lay off as many people as they need to now, before applying for their free bailout money from the government. It also sounds like businesses are trying to lay off more than they actually need to lay off, in order to get the maximum benefit. The terms of the bailout loans are such that they can lay off people before they apply, get the money, and s…

> The terms of the bailout loans are such that they can lay off people before they apply, get the money, and so long as they don't lay off any additional people after they get the money, the loan converts into a grant . This is false. The formula for the maximum amount of the loan is based on last years employment levels, or optionally, for companies that were not in business last year, based on January-February empl…

The max loan is $10M though. And the amount of the loan is based on 2.5x the average monthly payroll costs for the year prior to the application date. So it seems like there are a few loopholes:

a) If you have monthly payroll that is higher than 4M a month (2.5x4m=10M), than you can cut payroll and not have your total loan amount impacted (although it might impact the amount of loan forgiveness)

b) If you hired a ton of people over the last year, your average monthly payroll costs is going to be lower than your current payroll costs. And seeing as how the comparison period for forgiveness is the first half of 2019, this gives companies a free pass to cut employment to those levels without punishment.

So yeah, not all companies would benefit from layoffs (particularly smaller companies that have no little or no employment growth in the past year), but it seems like at least some could. The caveat here is I am not very familiar with the bill, so I may be missing some clauses that protect against the above scenario.

EDIT: Also, its not clear to me how the 25% salary cut exemption and the max $100k clause play into this. It seems like the payroll ratios that are used to adjust the loan forgiveness amount don't get adjusted. So in the above loopholes, instead of laying off employees, you could cut salaries without penalty. Alternatively, you could cut salaries by 25% but add more employees to the payroll to get the same monthly total in order to qualify for the full forgiveness.

Re: “Today I cut my pay to $0. I'm committed to laying off 0 of our employees.”

#114

Post by Ericson2314 »

ttul wrote: post #108
pdeuchler wrote: post #104

Earlier quoted context omitted.

If a 50% drop in expected revenue _growth_ causes you to default on your debt you are either a startup that had trouble raising money, in which case now you know that you do not have a viable business plan, or you are running a completely unsustainable business that only existed because of easy access to cheap debt the past couple of years.

Common misconception. It’s not uncommon for companies to use leverage to fuel growth. High yield venture debt is often tied to growth metrics. It’s not a mistake to operate a company using venture debt. In a highly competitive market, if you don’t lever up, your competitors will eat your market.

This is what the VCs want their dependents to do, to keep them suckling at the teet. It doesn't make sense otherwise.

Re: “Today I cut my pay to $0. I'm committed to laying off 0 of our employees.”

#115

Post by chinathrow »

brenden2 wrote: post #7

What I've been hearing on the internet is that companies are racing to lay off as many people as they need to now, before applying for their free bailout money from the government. It also sounds like businesses are trying to lay off more than they actually need to lay off, in order to get the maximum benefit. The terms of the bailout loans are such that they can lay off people before they apply, get the money, and s…

This is totally backwards and makes no sense, I agree.

Bailout money should come only for those who keep the work force in place. European countries have a thing called "short-time work", where you put staff on restricted schedules and the government pays e.g. 80% of the difference between the normal and the shortened hours. This is thightly coupled to not being able to do mass layoffs while "short-time work" is in place.

Re: “Today I cut my pay to $0. I'm committed to laying off 0 of our employees.”

#116

Post by wool_gather »

pdeuchler wrote: post #105
onetimemanytime wrote: post #70

Earlier quoted context omitted.

They have a gun pointed to the government, we'll lay off 12,870 employees, unless. And so on. So it's not always that easy.

Pretty easy to call their bluff and just pay for those people's unemployment instead

But for various other reasons, that's not likely to happen in the U.S.

Re: “Today I cut my pay to $0. I'm committed to laying off 0 of our employees.”

#117

Post by bdcravens »

hyperpape wrote: post #81
brenden2 wrote: post #7

What I've been hearing on the internet is that companies are racing to lay off as many people as they need to now, before applying for their free bailout money from the government. It also sounds like businesses are trying to lay off more than they actually need to lay off, in order to get the maximum benefit. The terms of the bailout loans are such that they can lay off people before they apply, get the money, and s…

There's a good reason to support businesses: if you airdrop money to individuals, businesses will go under because they don't have any revenue. That'll result in job losses, and when the virus is under control, there won't be jobs for people (you can't start a business and ramp up to a large number of employees overnight--it's a big organizational problem). But the support for businesses should be limited to those th…

Businesses that are crucial will be recipients of that air drop spending, as will the employees of those businesses. Cat litter task management SaaS apps? Not so much.

Re: “Today I cut my pay to $0. I'm committed to laying off 0 of our employees.”

#118

Post by hitekker »

Hasz wrote: post #72
liamcardenas wrote: post #55

Almost everyone I know who has run a business (myself included) has made similar sacrifices. This is not that rare. This guy seems to serially try to generate PR by making himself out to be a selfless CEO. In doing so, he is implying that most other CEOs/business owners are bad people.

I don't think the second sentence follows. Good people existing does not imply that everyone else is bad. What's more, signaling corporate responsibility + personal ethics is a part of his company in the same way that Elon Musk's flamboyancy is a part of Tesla. I much prefer the former.

> Good people existing does not imply that everyone else is bad.

It implies that to the immoral who pretend they’re moral. It reminds them of their own hollowness, which provokes a lashing out.

Re: “Today I cut my pay to $0. I'm committed to laying off 0 of our employees.”

#119

Post by Ericson2314 »

brenden2 wrote: post #7

What I've been hearing on the internet is that companies are racing to lay off as many people as they need to now, before applying for their free bailout money from the government. It also sounds like businesses are trying to lay off more than they actually need to lay off, in order to get the maximum benefit. The terms of the bailout loans are such that they can lay off people before they apply, get the money, and s…

Yeah all this "keep the payroll going" is an excuse to keep all the existing ownership in place. Helicopter money and let the firms go bankrupt, or if you must (ugh) take equity and create a sovereign wealth fund or disburse the shares among the people.

We can't keep the old oligopoly and bail them out. Loans and grants are both bailouts.

Re: “Today I cut my pay to $0. I'm committed to laying off 0 of our employees.”

#120

Post by rubyn00bie »

praptak wrote: post #34
brenden2 wrote: post #7

What I've been hearing on the internet is that companies are racing to lay off as many people as they need to now, before applying for their free bailout money from the government. It also sounds like businesses are trying to lay off more than they actually need to lay off, in order to get the maximum benefit. The terms of the bailout loans are such that they can lay off people before they apply, get the money, and s…

"And the principle of really existing free market theory is: free markets are fine for you, but not for me. That’s, again, near a universal. So you — whoever you may be — you have to learn responsibility, and be subjected to market discipline, it’s good for your character, it’s tough love, and so on, and so forth. But me, I need the nanny State, to protect me from market discipline, so that I’ll be able to rant and r…

God damn, I love Chomsky.

To Chomsky's point, in America we don't even have capitalism- we have "socialism for the rich," and when you propose "real capitalism" the capitalists run for their pitchforks and knives. My favorite fact about capitalism, is that in a truly free market society, there's zero economic profit. What most people consider "profit" (or as I know it "the cream") is actually a sign of market manipulation whereby those profiting are paying less than they should for their labor, rent, and/or supplies.

Recommending socialism in America is always met with resistance, but I have no idea... Workers who claim to be capitalists, and I would think want to maximize their realized revenue, don't want to be paid what their worth going against their own philosophy. They accept the market as it is as pure and perfect when that is empirically not the case. Right now "socialism" would be a market correcting force, returning a lot of power and money to labor.

I could literally go on for hours... so I'll stop here.

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