I am waiting to see the C-suite get some accountability - not holding my breath. if you over-hired by 7-12% over a an 18-24 month period that's a pretty significant management mistake - you clearly did not have a pulse on the business and its operations. I fail to see why these CEOs still have their jobs and worse, are continuing to get their performance bonuses.
Gitlab to lay off 7% of staff
341–350 of 622 posts
Re: Gitlab to lay off 7% of staff
#342> The current macroeconomic environment is tough No, it isn't, and it's embarrassing at this point to continue insisting this. The macroeconomic environment is good, particularly in the United States. Business investment is growing at 3% a quarter (annualized), which is better than the average over the past decade. Employment is growing rapidly. Inflation has been tame over the past six months. And wages are growing…
if, as you say, the economy is super strong and employment opportunities are robust, then nobody should worry about the layoffs because hey, you’ll find a new gig easily!
Many people have been at a place for a while, some over a decade. Massive layoffs means quick and picking individuals who rarely demonstrated poor performance.
What it means to someone being laid off is far more than the challenges in finding another place.
Plenty of fish and a rich dating scene out there. If you are dumped for dubious reason, would the argument that it isn't a problem at all to find someone else stand to not touch on the reasons?
Plus given the power dynamic at play, don't you think the debate should go on with the reasons for what almost look like a centralised decision making power deciding when millions people should be let go despite no correlation with poor individual performance and even business performance in many cases?
Re: Gitlab to lay off 7% of staff
#343> The current macroeconomic environment is tough No, it isn't, and it's embarrassing at this point to continue insisting this. The macroeconomic environment is good, particularly in the United States. Business investment is growing at 3% a quarter (annualized), which is better than the average over the past decade. Employment is growing rapidly. Inflation has been tame over the past six months. And wages are growing…
I also wonder where the widespread sentiment is coming from. Everybody had been expecting a recession on the basis of prediction markers like inverted yield curves and because it's historically due. That being said, no actual economic markers are actually pointing at one.
Lots of companies are using this and layoffs at other companies as an excuse to cut down their work force, which they (uncommonly) hadn't done for years (which might mean never for young companies). My guess is also that this is more acceptable to share holders because it allows companies to put some money in the bank in case a recession actually arrives. Being transparent about this would be more honest than blaming it on "tough macroeconomic environment". At least severance packages look pretty neat and there's lots of jobs out there still for software people. Hiring is getting a little easier for smaller companies too.
Re: Gitlab to lay off 7% of staff
#344Earlier quoted context omitted.
> The only economic conditions that matter to any company is whether they will be able to continue earning money the way they have been. This is clearly not true, although it is probably the most important thing. Interest rates matter if a company financed expansion using debt. Cost of capital matters if your plan is to grow through VC and you're not yet profitable. Changes in these areas can change a company whose b…
> Interest rates matter if a company financed expansion using debt. I haven't personally seen companies taking out operating loans using adjustable rates. Have you? If rates are fixed, then a company's expansion plans may need to slow or stop, but that's not the same as the company contracting. > Cost of capital matters if your plan is to grow through VC and you're not yet profitable. Which does apply in Gitlab's cas…
Venture debt is typical variable. So like most big startups.
Re: Gitlab to lay off 7% of staff
#345Earlier quoted context omitted.
> 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. I don't know, but I imagine that there's a pretty substantial difference between an isolated layoff and an industry wide layoff. Maybe it hits differently when you get to see the sausage…
Startups. Top performers at Google, if they've been smart about their finances, are sitting on a few million in the bank and have runways between ~10 years to infinity. They can afford to work for equity for a few years to take a slice of the pie when the company takes over another industry.
The highest performing, most expensive employees are going to be pretty senior and pretty experienced, ie older - the demographic least inclined to bet the farm on equity in a startup.
They’re likely to be at the stage of their life where their “runway” is their kids’ college tuition, or their (possibly early) retirement plan. Most will be far more inclined to take a (stable) pay cut rather than make a risky bet.
Plus, this whole downturn is rooted in drying up credit. Startups are more likely to fold than ever, and will largely have to either slow hiring or reduce non-equity compensation.
Re: Gitlab to lay off 7% of staff
#346Earlier quoted context omitted.
The economy is humming along just fine despite all of that.
which says a lot if the economy is disconnected from the prosperity and economic outlook of the majority of people. In such a case, a "good economy" is just a synonym for "elite are still doing well."
The bottom 50% have collectively more than doubled their net worth in the last 3 years[1], and their wages have outpaced inflation even at its currently high level[2].
Re: Gitlab to lay off 7% of staff
#347Earlier quoted context omitted.
Disney is laying off people because their movies keep bombing in the theaters. All they do is remakes and spinoffs of the famous old IPs they devoured, but that gravy train is coming to a stop. After a while people get tired of watching more half-baked Star Wars and Marvel sequels of bootleg quality. They're running out of franchises to milk, and making something new and original is not in their corporate culture.
I’m guessing you didn’t read the article because Avatar made in over 2 billion dollars, exceeding even their expectations, becoming the 6th highest grossing film of all time. Or maybe it bombed, beats me.
Avatar grossed roughly $3.8B worldwide
Avatar 2 has grossed roughly $2B worldwide.
None of these figures matter a damn. Gross figures aren't profit. And you need to adjust for inflation. Avatar 2 doesn't even show up in the top 25 all time when you adjust for inflation.
If the prod cost for Ava2 is $250 as reported, and marketing is roughly the same, then you're down to $1.5B before all the theaters take their cut. It doesn't mean that Disney netted $1.5B.
Re: Gitlab to lay off 7% of staff
#348> The current macroeconomic environment is tough No, it isn't, and it's embarrassing at this point to continue insisting this. The macroeconomic environment is good, particularly in the United States. Business investment is growing at 3% a quarter (annualized), which is better than the average over the past decade. Employment is growing rapidly. Inflation has been tame over the past six months. And wages are growing…
This feels like another semantic argument, this time over what "macroeconomic environment is tough" means. You are correct in everything you say in your first paragraph. That said, it's fair to say that "sharply rising interest rates" are also part of the macroeconomic environment. You can say that it was silly for all these tech companies and investors to think the free money spigot would go on for so long, but the…
People say “free money spigot” but I don’t understand it. Google has 120b in the bank. How was it able to leverage nearly zero interest loans before? Why isn’t new risk free (nominal) growth on cash a benefit considering they have so much cash?
Re: Gitlab to lay off 7% of staff
#349Earlier quoted context omitted.
I’m guessing you didn’t read the article because Avatar made in over 2 billion dollars, exceeding even their expectations, becoming the 6th highest grossing film of all time. Or maybe it bombed, beats me.
Once the accounts get to it, it will be shown to have lost money. (I'm referring how movie studios will get financially creative to portray popular movies "losing" money in order not to pay royalties to actors/writers"
https://en.m.wikipedia.org/wiki/Hollywood_accounting
They brought some of the accountants from Hollywood to the bay area and now all equity not owned by the founders or investors mysteriously becomes worthless right before a liquidation event.
Re: Gitlab to lay off 7% of staff
#350Earlier quoted context omitted.
This feels like another semantic argument, this time over what "macroeconomic environment is tough" means. You are correct in everything you say in your first paragraph. That said, it's fair to say that "sharply rising interest rates" are also part of the macroeconomic environment. You can say that it was silly for all these tech companies and investors to think the free money spigot would go on for so long, but the…
It isn't every big company. Apple hasn't, and they're the biggest of all. I think that is the point: it does not feel accurate to say that "macroeconomic conditions are tough" or that you expect slowdowns while recording record levels of revenue, and yet company after company after company is using these imaginary tough headwinds to justify laying off 6-8% of staff, often while paying dividends or issuing stock buy-b…
Apple isn't the best example. For instance their Safari development team is already severely underfunded, there is barely anyone to fire.