Tech CEOs Should Be Held Accountable, or Even Fired, Amid Layoffs • Hacker News Board

Re: Tech CEOs Should Be Held Accountable, or Even Fired, Amid Layoffs

#121

Post by kritiko » Mon, Feb 06, 2023, 4:58 PM UTC

WJW wrote: post #98

SketchySeaBeast wrote: post #38

Earlier quoted context omitted.

I think this point would be helped with some examples.

- Any form of R&D spending. Biotech companies are an extreme case of this, many making no money at all for years until they get FDA approval or go bankrupt. A lot of companies will invest in new development of new machines in order to gain an edge in the long run. - Any form of expansion into new markets. Will take a lot of cash to get started and may take years before it becomes successful. - Most marketing for bran…

I said this in another comment, but the gp is talking about stock price, not profits. Your examples seem to refer to P&L.

Re: Tech CEOs Should Be Held Accountable, or Even Fired, Amid Layoffs

#122

Post by chasebank » Mon, Feb 06, 2023, 4:58 PM UTC

rcme wrote: post #61

mabbo wrote: post #20

The goal of the CEO of a publicly traded company is to make the shareholders money. As much money as possible. If laying people off is the best way to do that, they'll do it. Blaming the CEO for doing the job they were hired to do seems short-sighted. Blame the broken system that incentivizes this, that makes doing it profitable. And then, let's change the system.

> The goal of the CEO of a publicly traded company is to make the shareholders money. As much money as possible. If laying people off is the best way to do that, they'll do it. How is failing to predict market conditions a few months into the future and over hiring part of making a publicly traded company money? If anything, these layoffs are an admission from management that they're wasting money.

If any CEO could predict market conditions with any sort of accuracy, they'd make a hell of a lot more money and have loads less stress trading the market. It's impossible to know the future.

Re: Tech CEOs Should Be Held Accountable, or Even Fired, Amid Layoffs

#123

Post by mypastself » Mon, Feb 06, 2023, 4:58 PM UTC

epylar wrote: post #99

colinmorelli wrote: post #86

Regardless of individual opinions on whether CEOs should be terminated for layoffs or not - there's a surprising amount of comments here that seem to not understand that growing companies don't hire for today, but for where they want to be tomorrow. Where you want to be tomorrow is based on where you and your investors believe the world is going. If the world materially changes enough to shift your expectations about…

Was it rational given the information we had at the time to think we would sustain that kind of rapid growth, the public health emergency wouldn't end, we wouldn't get inflation from the supply chain issues and the money printing?

The fear of another company outspending you out of business in the interim could also be a factor, so… maybe?

Re: Tech CEOs Should Be Held Accountable, or Even Fired, Amid Layoffs

#124

Post by sokoloff » Mon, Feb 06, 2023, 4:59 PM UTC

foul wrote: post #36

toomuchtodo wrote: post #22

Earlier quoted context omitted.

> The goal of the CEO of a publicly traded company is to make the shareholders money. As much money as possible. This is a poor take. The function of the CEO of a publicly traded company is to execute on major objectives of the firm. This might be optimizing for max profit, but it might not, depending on what your majority shareholders communicate to the board and management (as well as how they vote their shares). A…

> The function of the CEO of a publicly traded company is to execute on major objectives of the firm. Amongst the major objectives of a firm there is honoring debts and shareholders are mostly creditors.

A shareholder is not a creditor. They are an investor. A bond-holder or other lender is a creditor.

Re: Tech CEOs Should Be Held Accountable, or Even Fired, Amid Layoffs

#125

Post by legutierr » Mon, Feb 06, 2023, 5:01 PM UTC

manuelabeledo wrote: post #74

legutierr wrote: post #23

When there is strong demand for a product, a company should hire more people so that it can keep up with demand. Likewise, a company should hire when it has short-term capital investment plans that require additional staffing. I don't think anyone would argue with that. When demand decreases, or when a capital-intensive buildout is complete, would it be incorrect for the firm to decrease its staffing levels? If leade…

Everything you say makes sense in theory , i.e. if we were in the early industrial world of Adam Smith. How do you define "demand" in the context of SaaS? How many engineers do you need to run Google Search? Or Facebook? Or Spotify? Did the demand increase in the past five years? Have it decreased in the last year or so? Here's the thing. None of these companies (Google, Meta, Spotify) have reported losses, not even…

> You are conflating several things here - unemployment, workers' rights, and economy of scale. They are not necessarily connected, e.g. lower unemployment and higher wages don't push managers to take risks on massive hirings.

These things are connected, but you have it backwards. Managers' taking risks on massive hirings leads directly to lower unemployment and higher wages.

Re: Tech CEOs Should Be Held Accountable, or Even Fired, Amid Layoffs

#126

Post by standardUser » Mon, Feb 06, 2023, 5:01 PM UTC

mabbo wrote: post #20

The goal of the CEO of a publicly traded company is to make the shareholders money. As much money as possible. If laying people off is the best way to do that, they'll do it. Blaming the CEO for doing the job they were hired to do seems short-sighted. Blame the broken system that incentivizes this, that makes doing it profitable. And then, let's change the system.

I don't see how hiring and then firing huge numbers of people over the course of 3 years is making anyone any money. In fact, that sounds incredibly costly, not to mention the impact on morale and reputation.

Perhaps the "best way" was to make better staffing decisions, which a lot of these C teams failed at spectacularly.

Re: Tech CEOs Should Be Held Accountable, or Even Fired, Amid Layoffs

#127

Post by sokoloff » Mon, Feb 06, 2023, 5:02 PM UTC

manuelabeledo wrote: post #93

jaywalk wrote: post #55

Earlier quoted context omitted.

> A CEO would not need to lay off people if their long term plans worked accordingly, which means that they suck at their job. So any CEO who is not a psychic will most likely end up sucking at their job.

Let me put it this way. If I were to hire an engineer that writes 10x more code than the next, but all the code needs to be rewritten after a year because he made some very questionable decisions, I would definitely fire that guy. Similarly, if I hire a CEO who hires 20,000 people, then lays 12,000 off after a year, I would have to question his ability as the head of the company. It is not about being able to predict…

Alphabet is absolutely posting troublesome trends in their revenue reports. Google ad results down, YouTube results down two quarters in a row… That’s what pays the bills at Alphabet.

Re: Tech CEOs Should Be Held Accountable, or Even Fired, Amid Layoffs

#128

Post by crazygringo » Mon, Feb 06, 2023, 5:03 PM UTC

automatic6131 wrote: post #102

colinmorelli wrote: post #86

Regardless of individual opinions on whether CEOs should be terminated for layoffs or not - there's a surprising amount of comments here that seem to not understand that growing companies don't hire for today, but for where they want to be tomorrow. Where you want to be tomorrow is based on where you and your investors believe the world is going. If the world materially changes enough to shift your expectations about…

>when COVID hit and tech companies saw large surges because investors and CEOs saw industries leaping 5-10 years into the future overnight, they hired to support that growth Yes, they all egregiously failed. A massive, widespread, collective failure for which they should lose their jobs, as many other people do. On the face of it, it was obvious, that's not even hindsight bias - it was the topsy turvy world that bad…

> On the face of it, it was obvious

If it was obvious, then the market would have priced it in.

But it didn't. So the crowdsourced collective wisdom was indeed that industries were leaping 5-10 years into the future overnight. That was the thing that was "obvious" to most people.

You may have disagreed at the time, and if you'd shorted stocks you could have made some money. But the idea that "on the face of it, it was obvious" is blatantly untrue. You're able to say this only with the gift of hindsight.

Re: Tech CEOs Should Be Held Accountable, or Even Fired, Amid Layoffs

#129

Post by NovemberWhiskey » Mon, Feb 06, 2023, 5:05 PM UTC

njovin wrote: post #30

toomuchtodo wrote: post #22

Earlier quoted context omitted.

> The goal of the CEO of a publicly traded company is to make the shareholders money. As much money as possible. This is a poor take. The function of the CEO of a publicly traded company is to execute on major objectives of the firm. This might be optimizing for max profit, but it might not, depending on what your majority shareholders communicate to the board and management (as well as how they vote their shares). A…

I'd like to see a few recent examples of CEOs making decisions for the future health of the company that knowingly lower the stock price for more than 2Q.

If by "the future health of the company", you mean "ability to generate more profit down the line" then it's kinda tautological that (at a micro-level) those decisions are not going to lower the stock price - given that said stock price is derived from the net-present value of future returns.

That's of course assuming that the strategy is well-articulated and that the market understands it.

Re: Tech CEOs Should Be Held Accountable, or Even Fired, Amid Layoffs

#130

Post by crazygringo » Mon, Feb 06, 2023, 5:07 PM UTC

rcme wrote: post #61

mabbo wrote: post #20

The goal of the CEO of a publicly traded company is to make the shareholders money. As much money as possible. If laying people off is the best way to do that, they'll do it. Blaming the CEO for doing the job they were hired to do seems short-sighted. Blame the broken system that incentivizes this, that makes doing it profitable. And then, let's change the system.

> The goal of the CEO of a publicly traded company is to make the shareholders money. As much money as possible. If laying people off is the best way to do that, they'll do it. How is failing to predict market conditions a few months into the future and over hiring part of making a publicly traded company money? If anything, these layoffs are an admission from management that they're wasting money.

> failing to predict market conditions a few months into the future

Literally nobody is able to correctly predict market conditions a few months into the future. If you could do that reliably, you'd quickly become the richest person in the world.

Faulting CEO's for failing to predict the market is setting an impossible bar. All they can do is respond in a reasonable way to current market conditions and direction. Markets are going up and they can hire. Markets are going down and they have to fire. Nobody has a crystal ball here.