Laid off GitLabber here, the funny thing about this is the promotion season just ended. A LOT of people got promoted, so their employee cost is probably a wash after these promotions. Make of that what you will.
Gitlab to lay off 7% of staff
121–130 of 622 posts
Re: Gitlab to lay off 7% of staff
#122Listened 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).
My issue with analyses like this is they argue that layoffs are a bad idea and it's just companies shooting themselves in a foot. That's what people want to hear, so it gets a lot of clicks and citations. But, this also means that all the big companies (and that's a lot of them) that just announced layoffs made a obviously bad move. Are they all stupid? I find it hard to believe. It's more plausible, that yeah, layof…
It depends entirely on what's driving the layoffs, is it:
1. Actual market costs requiring a diminished future projection of cash flow
2. A Market expectation of investors who'll rate your company as less valuable if you dont.
I'd posit right now #2 is more likely than #1 given all the record profits being reported everywhere. When #2 happens, it's definitely going to affect people. When there's no actual problem, just some future expectation of problems, that's going to cost you.
Re: Gitlab to lay off 7% of staff
#123Ok, 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 o…
Addressing point by point:
- Why is this beneficial? The disgruntled will be the high performers. In no shape or form is this beneficial for culture.
- Assuming you mean average performers who are paid well, ie. well tenured? Considering these types harness significant domain knowledge it would be a strategic mistake to let them go in any meaningful number. The focus on smaller cuts tends to be low performers or recent hires.
- The only time this is beneficial is when there is indeed 1) a financial dire straights situation or 2) a significant change of course (ala Google) and blood letting has to be rapid, otherwise you're letting go of top performers in the process. It would be much cheaper to reassign to other teams given the cost to source/acquire and onboard top talent.
- Bingo. This is the primary reason almost always.
Re: Gitlab to lay off 7% of staff
#124Earlier quoted context omitted.
No because some of the effect is to instill fear.
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Franky I'd say this sort of attitude is much more corrosive – the idea that people who feel they are being treated unfairly or poorly should roll over and accept it merely because other people are being treated more unfairly or poorly.
I don’t really agree with the idea that there is an underlying wish to “instil fear” or whatever. I agree even less with the attitude that we should all shut up and be happy so long as someone else is worse off.
Re: Gitlab to lay off 7% of staff
#125Ok, 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.
From a cost basis, this could possibly be true. But, with that type of attrition, you would probably see a greater percentage of high-performers go because they have good options. Then, you not only have lower producing staff, but it also becomes more difficult to hire top level talent back, because they want to work with other folks like themselves.
Isn't that attrition going to happen anyway? And with mass layoffs, wouldn't top talent, with plenty of options, be wary of a company who is likely to layoff 7% of its staff to please stockholder share pricing? I don't know the answer to top talent retention, but it seems easier and less expensive to turn your existing staff into "top talent" under the tutelage of the existing top talent and implement a hiring freeze with no huge news cycle.
Re: Gitlab to lay off 7% of staff
#126It's weird because I've seen job posts for them running for 6 months now and still not be filled. Are they running job ads but not hiring?
A recruiter from gitlab reached out to me last week for a SRE management position. My guess is they had no idea about the impending layoff.
Re: Gitlab to lay off 7% of staff
#127It's interesting the number of company layoffs recently that have listed "you can keep your laptop" as part of the severance package. Is it possible that shipping charges for layoffs of this size plus the overhead and personnel to deal with such numbers of returns is more expensive than just having employees keep them?
Companies like this drop-ship new laptops to new employees. The laptops everyone has are COVID-era and about to expire for warranty, and would just be binned anyway. So there is no point taking them back.
Most companies, especially remote first ones like Gitlab, don’t have sizable IT departments that could deal with receiving, cleaning, reformatting, and deploying hundreds of laptops anyway. Can you imagine the poor technician who gets 150 laptops FedEx'ed to his house? The company is paying tens of thousands in severance costs per employee, way easier to just add the mostly-depreciated laptop onto that figure than deal with the logistics.
Re: Gitlab to lay off 7% of staff
#128Earlier quoted context omitted.
My issue with analyses like this is they argue that layoffs are a bad idea and it's just companies shooting themselves in a foot. That's what people want to hear, so it gets a lot of clicks and citations. But, this also means that all the big companies (and that's a lot of them) that just announced layoffs made a obviously bad move. Are they all stupid? I find it hard to believe. It's more plausible, that yeah, layof…
> they make shareholders rich In that regard, I wonder if it becomes a Wall Street meme--layoffs for the sake of doing layoffs. Companies that performed layoffs made shareholders rich, so therefore if your company isn't doing layoffs in a layoff climate it's assumed that shareholders are better off putting their dollars somewhere else.
This currently _is_ a meme. Heck, even the fed was complaining about inflation and the unemployment numbers.
It's definitely one of those "if we're not growing, we're dying, lets cut all the employees off"
Re: Gitlab to lay off 7% of staff
#129I'll have to find a new job in spring this year in IT after a one year break. I'm kind of worried considering all those lay offs I must say. I'm not a high profile candidate by any means.
Re: Gitlab to lay off 7% of staff
#130Listened 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).
If your plane is gonna crash without dumping some excess weight, killing everyone on board, what do you do? You throw a ton of stuff out of the plane in an effort to continue on. This is what layoffs are. It’s a survival mode tactic. The cost of lower morale is smaller than the cost of complete failure.
None of these massive FAANG companies are anywhere near crashing.