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At 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.
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unlike other companies Gitlab is _still_ not profitable https://ir.gitlab.com/news-releases/news-release-details/git... Fiscal Year 2022 Highlights: Total revenue of $252.7 million GAAP operating margin of (51)%; Non-GAAP operating margin of (39)% hence cutting costs before borrowing money becomes too expensive (0% interest rates are gone)
Noob question: how does one learn to read these financial statements?
They’re a bunch of terms and abbreviations you’ll also need to understand eg FY means Fiscal Year, what the various GAAP measures are, and often many companies and industries have their own non-GAAP measures.
To really understand it all takes a lot of work, corporate accounting is nothing at all like managing person cash flow, there are a lot of accounting practices you need to understand like depreciation, how revenue is recognized, etc - all of which can be games to a degree.
Note that a private company doesn’t have to release this kind of info.
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You're missing the point - the point is to send a message, to employees and to the investors. That they're SERIOUS COMPANY that does the right thing. Follows the market. Listens to economy. That won't hear complaints from the entitled lazy overpampered engineering workers. That they need to get back to the factory and be like all other quiet labor. That HARD DECISIONS can be made without regret when bankers ask for t…
It's incredible how submissive these companies act to capital.
I don’t get this - did every single company hire hundreds of people for no good reason? A global event forcing folks to temporarily use more online services is, well, temporary. I just don’t get the mindset that triggered all these companies to mismanage their teams so badly.
You'd think somewhere, in at least one of these larger tech companies, there would be a leader boldly proclaiming "this is our time to increase our investments and beat our competitors!" But it turns out there is even less diversity of thought in tech leadership than there is racial and gender diversity.
That said, Gitlab may be making a very prudent decision given their circumstance. I don’t know enough to conclude one way or the other. But considering what they are doing so closely mirrors what nearly everyone else is doing, skepticism is warranted.
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unlike other companies Gitlab is _still_ not profitable https://ir.gitlab.com/news-releases/news-release-details/git... Fiscal Year 2022 Highlights: Total revenue of $252.7 million GAAP operating margin of (51)%; Non-GAAP operating margin of (39)% hence cutting costs before borrowing money becomes too expensive (0% interest rates are gone)
Noob question: how does one learn to read these financial statements?
Listened 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…
My general sense is that every company is rushing to trim some fat while it's socially acceptable to do so. But where are they making cuts?
At 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've just gotten so used to the idea that "tech companies don't need to make profit" that we don't even question it any more. I still hear people shocked when a companies revenue goes up but their stock price drops while completely ignoring the reality that costs also went up.
The truth is all companies need to have profit and many of these tech companies have never showed that they're even capable of turning a profit.
What's happening is that investors are going to boards and telling them you need to make serious progress towards profitability. If sales are growing slowly or even declining there is no other option but to do layoffs.
IMHO this is still just the beginning, there's a lot of feedback in the tech ecosystem that are going to start playing out as more and more companies start scrambling to show profitability.
Earlier 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.
Listened 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.