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Stripe laying off around 14% of workforce

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Re: Stripe laying off around 14% of workforce

#41

Post by thomasjudge »

jesuscript wrote: post #38
benjaminwootton wrote: post #18

“On Tuesday we set a new record for total daily transaction volume processed.” How does a company breaking records 36 hours ago conclude they need to lay off 14% of the workforce? Even with economic storm clouds on the horizon that seems very jumpy.

They are doing what any company does whether the slow down in the economy impacts them or not. They lie and say it impacts them and use it to do a purge. I worked at companies that were in no way impacted by the 2008 financial crisis (in fact, business was booming). Leadership managed to use it as an excuse to do a hiring freeze and plead with existing employees that they are the lucky ones and they need to work hard…

Just like companies are using the cover of "inflation" to jack up prices (and profits) regardless of if they have cost increases or not

Re: Stripe laying off around 14% of workforce

#42

Post by mkl95 »

benjaminwootton wrote: post #18

“On Tuesday we set a new record for total daily transaction volume processed.” How does a company breaking records 36 hours ago conclude they need to lay off 14% of the workforce? Even with economic storm clouds on the horizon that seems very jumpy.

You can break some records while failing to achieve your goals. Companies set unrealistic OKRs all the time.

Re: Stripe laying off around 14% of workforce

#43

Post by akshaykumar90 »

benjaminwootton wrote: post #18

“On Tuesday we set a new record for total daily transaction volume processed.” How does a company breaking records 36 hours ago conclude they need to lay off 14% of the workforce? Even with economic storm clouds on the horizon that seems very jumpy.

The decision to lay off must be made months ago. The point about setting a new record is to convey and reassure future growth potential to investors and employees (who are also stock holders).

Re: Stripe laying off around 14% of workforce

#46

Post by mritchie712 »

skidev wrote: post #27

14% seems like a very high number to me to axe at once, how have you got 1 in 7 employees that your business doesn't need to function when it is growing.

better for morale to go big once then chip away. With this cut, they can confidently say: "this will be the only one".

Re: Stripe laying off around 14% of workforce

#47

Post by eganist »

Hey pc, if you're around:

> John and I are fully responsible for the decisions leading up to it.

What are the two of you doing to show accountability? Are you slashing your own future stock grants, cutting your own salaries, diluting your positions with stock grants to everyone else? What's the consequence for this decision on your end that shows you're accountable for what happened, not just responsible for it? Since you have no intention of cashing out, the valuation cut is ineffectual as a consequence to you, and the support/severance package will probably have minimal impact on your own bottom line since it's all largely been accounted for (payouts of planned bonuses, existing unvested stock etc)

Re: Stripe laying off around 14% of workforce

#48

Post by rvz »

onlyrealcuzzo wrote: post #19
MichaelZuo wrote: post #3

Stripe did seem to be somewhat overstaffed after the huge hiring spree in the last 2 years. Though the bottom 14% is a pretty big amount to cut, almost certainly some decent performers in that group.

Why didn't Stripe SPAC or IPO during the boom? I imagine they could've went for 10-20x their current value like most IPOs during that time... IIUC - Stripe actually has good financials. As a comparison - Twitter had ~7500 employees. Stripe had ~8000. So I wouldn't be surprised if they have room to cut ~14%. Though, I'm interested why now. Are they planning to IPO soon or something? It just doesn't seem like a good ti…

Very good question. As I said before, the time to IPO was in 2019 [0] and Stripe should have hastened and IPO'ed then and now it had it's valuation slashed [1] and instead had to postpone and wait, just like the rest of the other startups who were too late. [2]

So, not really a surprise that this happened to Stripe.

[0] https://news.ycombinator.com/item?id=20993919

[1] https://news.ycombinator.com/item?id=32566652

[2] https://news.ycombinator.com/item?id=31062227

Re: Stripe laying off around 14% of workforce

#49

Post by hnbad »

danpalmer wrote: post #13
MichaelZuo wrote: post #3

Stripe did seem to be somewhat overstaffed after the huge hiring spree in the last 2 years. Though the bottom 14% is a pretty big amount to cut, almost certainly some decent performers in that group.

> Though the bottom 14% is a pretty big amount to cut, almost certainly some decent performers in that group. I don't think you can only cut "poor performers" in any sort of bulk layoffs. You can avoid it in aggregate, but there will be enough mistakes, enough teams that need to cut a number but don't have enough poor performers, or even enough high performers who are just on teams that are deemed no longer necessary…

I've seen a company's culture effectively be killed overnight because one "low performer" was cut off. Not every impact an employee has is directly represented in their own bottom line.

The company in question was able to stomach this because it would go on to undergo significant structural changes anway but it basically had to start building a new company culture from scratch and doing it top-down is much harder than building on something you've developed organically via your early hires.

EDIT: Since I'm rate-limited right now, I'll elaborate here: it was a company with a number of employees in the low 2 digits at the time and the employee in question had been involved (indirectly via another venture in the same office space and later directly) since before the company even got off the ground. They were in a non-technical role at a tech company but on good terms with most employees and genuinely cheerful about company branding and everyone being "the company" rather than just working on cool tech that happened to be sold by that company. Basically they acted as social glue, both between other employees but also between those employees and the company. Some other (higher performing) employees left after them but I doubt most could point at what it was that pushed them to quit even though this employee's departure was likely a major contributing factor. I could go into more detail but I want to preserve the anonymity of everyone involved, especially those no longer working at the company.

Re: Stripe laying off around 14% of workforce

#50

Post by tempsy »

gt565k wrote: post #35

I mean it’s a pretty damn generous package. Hell, I’ll take it and chill for a month or two before jumping into another job. I’d love to get laid off with a quarter+ of a year paid for.

It’s a little different when everyone is cutting staff at the same time and there’s lots of competition for a limited number of “good” jobs
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