Gitlab to lay off 7% of staff • Hacker News Board

Re: Gitlab to lay off 7% of staff

#151

Post by whatever1 » Thu, Feb 09, 2023, 3:10 PM UTC

softwaredoug wrote: post #63

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).

It takes long time for the layoff effects to hit the company.

The main effect is that you lose the trust of the top performers. These will be the in the lookout for new opportunities the day after the layoffs are done. If you cut 10%, expect 10% from the top to flee within a couple of years.

The second effect is related to the fact that companies usually target older people with expensive jobs. In an a big org these are the wizards who have the unwritten cookbooks in their brains. When they leave en masse, a lot of the organizational memory is gone, and expensive operational mistakes of the past are forgotten. These have longer effects that will haunt the company for many years.

The only way you can safely pull off layoffs is if you ensure that anything you do in the company requires the experience of a boot camp. That means that everyone is fungible and you can easily swap them.

And this is what tech did better than any other industry. The average required know-how depth of a tech white collar worker is easily two three levels below when compared to other industries. Pharma and chemicals come to mind from personal experience.

Re: Gitlab to lay off 7% of staff

#152

Post by blippage » Thu, Feb 09, 2023, 3:10 PM UTC

dfern wrote: post #79

arbuge wrote: post #56

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.

"What explains why so many companies are laying large numbers of their workforce off? The answer is simple: copycat behavior, according to Jeffrey Pfeffer, a professor at the Stanford Graduate School of Business." https://news.stanford.edu/2022/12/05/explains-recent-tech-la...

A few weeks ago I was opining that companies were laying off staff because "that's what everybody else was doing." I'm glad to see to few folks concur.

Copycat behaviour is not uncommon, I think, and is swayed by market sentiment. If the (equities) market ( mean in a general sense) feels bullish, then Microsoft, Google, etc. start piling on employees. Because hey, we're tech companies, we have to justify our market ratings by pursuing (or at least looking like we are pursuing) growth, so that's what they do.

Then, when things sour, the mood becomes one of conservatism. Then it looks good to shed employees. This is all despite the fact that it may have little to do with the actual state of the companies.

Microsoft in particular is hardly a heavily cyclical company, so there is little need to behave like one. Not really. They could adopt a more even approach to hiring. If they tried.

Companies bleat on about how difficult and expensive it is to hire staff. And yet, here we are.

Re: Gitlab to lay off 7% of staff

#153

Post by hbn » Thu, Feb 09, 2023, 3:10 PM UTC

todd3834 wrote: post #137

msm_ wrote: post #98

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…

Most of them over hired like crazy during the pandemic bubble. I wouldn’t say they were stupid but collectively most of them made a massive mistake. So yeah it isn’t hard to believe for me. I don’t think the layoffs are a stupid decision but I do think the extreme over hiring as if the bubble was a new normal was. Between 2020-2022 I literally conducted over 200 interviews for my previous employer. It was like we cou…

> Most of them over hired like crazy during the pandemic bubble. I wouldn’t say they were stupid but collectively most of them made a massive mistake.

It wasn't a massive mistake if the rapid growth grew their stock enough that paying a few hundred/thousand extra employees for a year or 2 was worth the cost.

Re: Gitlab to lay off 7% of staff

#154

Post by time_to_smile » Thu, Feb 09, 2023, 3:12 PM UTC

throway_gtlbr wrote: post #121

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.

My company is doing the same thing. Layoffs haven't happened yet (but anyone who isn't in denial knows they're coming), but we probably had a record number of promotions.

The reason for this is that you want to butter up the employees you're going to keep before layoffs. Getting promoted after you saw coworkers you respect get laid off makes you feel gross, and companies do need to do something to increase morale.

The funny part is many people at my co. believe promotions are evidence that we couldn't possibly get layoffs.

Re: Gitlab to lay off 7% of staff

#155

Post by bogomipz » Thu, Feb 09, 2023, 3:12 PM UTC

sqldba wrote: post #109

bogomipz wrote: post #91

It'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.

This was kind of my point though. It's a really net-benefit to the company but couched as a severance benefit to the individual being laid off.

Re: Gitlab to lay off 7% of staff

#156

Post by iamflimflam1 » Thu, Feb 09, 2023, 3:13 PM UTC

iends wrote: post #130

whalesalad wrote: post #117

Earlier quoted context omitted.

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.

Exactly this - if you're still making massive profits then layoffs are unnecessary.

You could just instigate a hiring freeze and let natural attrition run its course.

But that would involve having some balls and managing a business in a way that is good for everyone.

Re: Gitlab to lay off 7% of staff

#157

Post by disgruntledphd2 » Thu, Feb 09, 2023, 3:14 PM UTC

tedivm wrote: post #87

izacus wrote: post #78

Earlier quoted context omitted.

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…

Exactly- Facebook laid off 7% of their staff and then followed it up with a $40 billion stock buy back. That's over $3,600,000 per laid off employee. The economy isn't the issue here, the companies know that since layoffs in mass are happening they can get away with it without taking the same reputational hit as if they did this on their own.

> Exactly- Facebook laid off 7% of their staff and then followed it up with a $40 billion stock buy back

FB laid off about 14% of their staff.

Re: Gitlab to lay off 7% of staff

#158

Post by fsociety » Thu, Feb 09, 2023, 3:15 PM UTC

msm_ wrote: post #98

softwaredoug wrote: post #63

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…

Most executives and shareholders I meet are truly clueless in their business and how to be effective. I think this shows more in larger organizations because lower level employees are far removed from important decisions.

It’s fair to disagree, but in my mind it is why you pay top $$$ for great executives. But also unfortunate that an average executive can cause harm to a business due to a large sphere of influence.

Re: Gitlab to lay off 7% of staff

#159

Post by todd3834 » Thu, Feb 09, 2023, 3:15 PM UTC

hbn wrote: post #153

todd3834 wrote: post #137

Earlier quoted context omitted.

Most of them over hired like crazy during the pandemic bubble. I wouldn’t say they were stupid but collectively most of them made a massive mistake. So yeah it isn’t hard to believe for me. I don’t think the layoffs are a stupid decision but I do think the extreme over hiring as if the bubble was a new normal was. Between 2020-2022 I literally conducted over 200 interviews for my previous employer. It was like we cou…

> Most of them over hired like crazy during the pandemic bubble. I wouldn’t say they were stupid but collectively most of them made a massive mistake. It wasn't a massive mistake if the rapid growth grew their stock enough that paying a few hundred/thousand extra employees for a year or 2 was worth the cost.

I’d agree with you if any of them that did this had a stable or positive stock price. Looking at tech stocks and it’s hard to find an example where I feel the hiring was a good thing.

Re: Gitlab to lay off 7% of staff

#160

Post by pclmulqdq » Thu, Feb 09, 2023, 3:15 PM UTC

whatever1 wrote: post #151

softwaredoug wrote: post #63

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).

It takes long time for the layoff effects to hit the company. The main effect is that you lose the trust of the top performers. These will be the in the lookout for new opportunities the day after the layoffs are done. If you cut 10%, expect 10% from the top to flee within a couple of years. The second effect is related to the fact that companies usually target older people with expensive jobs. In an a big org these…

I think this is the logic that can make a company like Citadel, which fires 10% of their staff per year, work out well. If you have no expectation of job safety, it attracts a certain kind of person, but there's also no love lost if a layoff round is a little bigger than normal.