Are layoffs like a fashion statement, now? "Look, we're cool, too!" why is everyone doing this at the same time?
C-levels are driven by fads.
I think it’d be wise for more companies to employ an executive data scientist.
Gitlab to lay off 7% of staff
61–70 of 622 posts
Re: Gitlab to lay off 7% of staff
#62Are layoffs like a fashion statement, now? "Look, we're cool, too!" why is everyone doing this at the same time?
Because you always need to find some reason why you lay of which is satisfying for various parties (through not really the people fired, but investors both current and future, people with shares, companies you sell to, the public, etc.).
And "currently everyone does so and the economy is bad" is a good excuse.
And there are many reasons why a company might lay of people even if it's currently not strictly necessary:
- you don't really need that many people (anymore), common for small companies which grew to fast
- you want to restructure your company majorly and doing it will less people is easier
- you prefer to go a bit slower, so that e.g. current investment money lasts longer
- you want to be more robust to a potential economic dive, so you reduce money cost at the cost of going a bit slower and in turn can compensate hits in actual revenue better (at least for some time)
- you have accumulated a bunch of people which are not bad enough to fire them because of performance but also you know you can get better people, so you use it as an excuse to let people go, go slower for a "not short but not too long" while and then rehire. Alternatively companies like Amazone do that every year fire bottom x% then rehire roughly the same amount.
- you expect salaries to fall in the industry as a whole by quite a bit
- financial distress (e.g. interest rates and/or profit)
Lastly group dynamics to affect Investors, CEOs, Board Members, HR people etc. too, so it might be a "everyone does so so we better do so, too" situation (potentially forced onto the company by the board of shareholders).
Re: Gitlab to lay off 7% of staff
#63Listened to a great podcast about layoffs yesterday (https://hbr.org/podcast/2023/02/why-many-companies-get-layof...)
The takeaway is that layoffs are extremely trust destroying for employees NOT laid off, and in the end not clear they're a financial net positive. Both with direct and indirect costs (lack of engagement from employees, etc).
Re: Gitlab to lay off 7% of staff
#64Ok, 7%. With all the cost, I wonder if just stopping hiring and letting normal attrition rate play out would have had almost the same effect.
I think there are several reasons to do it this way:
- Effective number will be higher because some employees will be disgruntled because of the layoff event and will leave on their own. It's usually estimated that the effective number is twice as high
- By doing a layoff you can quickly get rid of people who are overpaid. The attrition would take much longer. And with the regular performance review process you can only get rid of under-performers
- With a layoff you can get rid of entire teams, wouldn't happen normally
- Finally, and probably most importantly, shareholders expect a layoff, especially if other companies had already done it. Cargo cult CEO thinking. You could see the stock price rising for some of the previous companies announcing layoffs
Re: Gitlab to lay off 7% of staff
#65Ok, 7%. With all the cost, I wonder if just stopping hiring and letting normal attrition rate play out would have had almost the same effect.
Our banking corporation did that some... 7? years ago. Instead of random firing rounds happening locally and globally few times per year, where even locally best people were sometimes let go ie due to current under-allocation, and everybody would be nervous for months afterwards... just nothing.
Helped morale tremendously. Don't treat your employees like numbers, it will bite you back eventually, in all aspects including finances. Even most cold-hearted sociopaths on the top should grok that.
Re: Gitlab to lay off 7% of staff
#66Earlier quoted context omitted.
[flagged]
Pretty sure your first paragraph was enough, don’t really see the point of bringing up a rape victim example. I mean, “dutonians” from PagerDuty is enough to illustrate how ridiculous this whole thing is
Thanks for the feedback. I’ve toned it down.
However I want companies to understand how terrible that malpractice is.
Re: Gitlab to lay off 7% of staff
#67At this point it's beginning to look like tech companies are doing this because it's the trendy thing to do, along with inserting a few words about AI in their websites and pitch decks.
We are a SaaS tool and we've has to justify our value to customers as everyone is looking to cut expenses. We also did cut our own spending on SaaS tools. So I think that this is sort of percolating through the industry. There is a real contraction in SaaS spending.
Re: Gitlab to lay off 7% of staff
#68Re: Gitlab to lay off 7% of staff
#69Are layoffs like a fashion statement, now? "Look, we're cool, too!" why is everyone doing this at the same time?
1. The federal interest rate is nearly at 5%. Any business operating depending on lines of credit are going to hurt (Source: https://www.federalreserve.gov/releases/h15/ ) 2. Consumer spending is down (Source: https://www.bea.gov/data/consumer-spending/main ). So you have the producers spending more to operate, and consumers spending less. This leads to an inevitable contraction in the economic output. Also known as…
The tech sector didn't start layoffs early last year because they forsaw a possible recession more than a year ahead. Moreover, layoffs are still contained within tech. It's time for a new theory.
Re: Gitlab to lay off 7% of staff
#70Generous severance, half the layoff size of other firms by percentage, particular attention paid to health care. I have always admired GitLab, and I remain impressed.