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Tell HN: DigitalOcean is doing layoffs

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Re: Tell HN: DigitalOcean is doing layoffs

#221

Post by alostpuppy »

ejb999 wrote: post #82
der-erlkonig wrote: post #48

Hearing that a lot of Community teams were let go, including the teams responsible for tutorials. Seems obvious DigitalOcean doesn't care about developers anymore. But this has been obvious for a while now. I guess their value "Our Community is bigger than just us" only matters when profits are up. Pour one out for DigitalOcean. It's the end of an era.

I always felt like DO had one of the very, very best set of documentation available on a lot of very technical topics (even things that didn't related only to D.O.) - sorry to see there were cuts in that area.

Agreed!

Re: Tell HN: DigitalOcean is doing layoffs

#222

Post by [deleted] »

reisse wrote: post #142
jpgvm wrote: post #121

I don't really get the motivation for this beyond personal greed on behalf of executives that are only seeking to prop up the share price in the short term. The market forces at work will force all technology companies down in valuation pretty much regardless, what is the difference of a few extra million market cap to handicap your ability to grow during the next expansion phase? I can understand it if you have brou…

> I can understand it if you have brought on a lot of fat and you want to lean out your team and need an excuse but outside of that rather narrow situation This doesn't really seem to be a rather narrow situation. The tech companies were hiring like crazy for the past two years. Quick googling shows that DigitalOcean increased headcount by 31% last year. And contrary to the popular opinion here, for me this does soun…

[deleted]

Re: Tell HN: DigitalOcean is doing layoffs

#223

Post by bbwbsb »

Jommi wrote: post #86
psyhigh wrote: post #58

I was laid off too from DigitalOcean this morning. Just an email that I was terminated effectively immediately. Don't companies give a month's notice in advance though?

Unfortuantely this is the reality for most companies in the US. Only in most european countries do they have this courtesy.

While this holds for individual employment[1], there is the WARN act[2] for mass layoffs, which requires advance notice if certain conditions are met. However, my experience is that companies will do whatever they can to avoid triggering it and you will not necessarily hear about it if a team you don't communicate with is impacted.

-- 1: https://en.wikipedia.org/wiki/At-will_employment 2: https://www.dol.gov/agencies/eta/layoffs/warn

Re: Tell HN: DigitalOcean is doing layoffs

#224

Post by chriscoyier »

tjpnz wrote: post #57
der-erlkonig wrote: post #48

Hearing that a lot of Community teams were let go, including the teams responsible for tutorials. Seems obvious DigitalOcean doesn't care about developers anymore. But this has been obvious for a while now. I guess their value "Our Community is bigger than just us" only matters when profits are up. Pour one out for DigitalOcean. It's the end of an era.

That's a shame given the quality of their content. I wonder what this means for CSS Tricks.

I wouldn't mind knowing haha.

Re: Tell HN: DigitalOcean is doing layoffs

#225

Post by colinmorelli »

jpgvm wrote: post #218
colinmorelli wrote: post #161

Earlier quoted context omitted.

It's not to make one quarter look better, it's to align the company with new market expectations. Investors now are expecting responsible cash burn, since capital has become significantly more expensive than before. Companies exchanging cash for market share are no longer as attractive. Profitability and sustainable growth are the new objectives (personally I wish this was always the goal and think the last 3-5 years…

My point is that market expectations are fickle, over-hiring, layoffs etc are all symptoms of paying too much attention to the market in the short term rather than focusing on long term ROE.

I really struggle with this perspective for a pretty simple reason:

"Market expectations" are predictions of the future. Early pandemic, predictions for tech companies were favorable. They were hiring not because of quarterly targets or short-term objectives, but because companies believed they would be able to pull future goals forward. They are now laying off because future predictions are more bleak. With new data, we form new ideas. There are few companies out there saying "we're 100% confident we can grow 100% YoY for the next two years" but not hiring according to that. Their projections of where they will get have changed, and the hiring plan follows suit.

It's really easy to say this with hindsight, and we often forget/don't realize when we're acting based on it. The reality is that unless you (the general you) were shorting Google/DO/Salesforce/whoever in 2021 at their peaks, then it's clear none of us really know what the future hold and are all guessing. If it was so obvious then, there are ways for us to individually profit off of that.

So, being 100% genuine here: if you really believe you have a better opinion about long term value, play in the stock market. Short companies that are underinvesting in growth compared to their competition. Buy the dips. Sell the highs. But my guess is you don't have that level of confidence (I certainly don't!) and that should help explain why, as the person responsible for a >$1B annual budget, you might have to change some decisions you made when new data comes in.

Re: Tell HN: DigitalOcean is doing layoffs

#226

Post by RestlessMind »

jeremyjh wrote: post #106
taylodl wrote: post #98

Earlier quoted context omitted.

You are absolutely correct and I wish more people understood this: poverty is a feature of the system. People who tell poor people to just "get a job" don't understand how this system works. Also, there's no point in trying to figure out how to "fix" the system, i.e. eliminate poverty, because we've found no alternative that works save for one: social safety nets to ensure the poor are at least housed, clothed, and f…

I don't think poverty is necessary, that problem could be solved by redistributing these returns, e.g. through a higher corporate tax and UBI. The alternative to monetary policy is a cycle of boom and bust that is much larger and more disruptive. Fundamentally though, we do not want people to be employeed in jobs that produce little value, and when interest rates are too low a lot of that starts to happen.

> that problem could be solved by redistributing these returns,

TBF, we already have redistribution via progressive taxation which funds "social safety nets to ensure the poor are at least housed, clothed, and fed." (to use GP's words). Trick is to ensure that we do not do too much of it, else people will not have any incentives to work harder.

Re: Tell HN: DigitalOcean is doing layoffs

#227

Post by brianjking »

jpgvm wrote: post #121

I don't really get the motivation for this beyond personal greed on behalf of executives that are only seeking to prop up the share price in the short term. The market forces at work will force all technology companies down in valuation pretty much regardless, what is the difference of a few extra million market cap to handicap your ability to grow during the next expansion phase? I can understand it if you have brou…

late stage capitalism in a lot of the time. they fire ppl and hire them back for less.

Re: Tell HN: DigitalOcean is doing layoffs

#228

Post by smugma »

reisse wrote: post #156
jpgvm wrote: post #141

Earlier quoted context omitted.

That would make sense if a significant amount of their compensation stood to be made during the contraction. However if your tenure is expected to outlast the contraction then you would make more money in the long run by planning for how to be in the best position to exploit the market conditions during the next upswing. It's hard to do that if you layoff crucial staff that are part of your growth engine.

Average CEO tenure is 5 years and it's going down. Personal anecdote: I worked at a large EU tech company, then acquired by even larger US tech company. For the five years there, I've seen five different CEOs with almost fully different teams of other C-levels. After the second CEO you clearly start to see how long the next one expects to reign - just take the roadmap and look where reasonable and achievable goals co…

In contrast, FAANGM’s have had an average of <2 CEO’s in the past 20+ years.

Re: Tell HN: DigitalOcean is doing layoffs

#229

Post by smugma »

AFriendlyBeagle wrote: post #56
jalino23 wrote: post #13

Earlier quoted context omitted.

how does interest rate affects company layoffs and why is being more efficient affects that? and why would FED want this? - serious question

Increasing interest rates can discourage investment by making it more expensive to borrow money, and by increasing the yield of savings relative to available investment targets. Corporations seeking investment in this climate might try to attract it by increasing the expected return on investment, which would involve committing fewer resources or achieving greater returns - being "more efficient". Labour costs are ty…

Why do you think the Feds view is erroneous? High employment led to a buyers market for labor, and total comp in tech (and every other field) higher.

What do you see as primarily driving inflation? Supply chain, China, Ukraine?

Re: Tell HN: DigitalOcean is doing layoffs

#230

Post by Moose_the_Goose »

time_to_smile wrote: post #163
mguerville wrote: post #131

Earlier quoted context omitted.

Gross Profit isn't a helpful number as it doesn't account for any fixed costs like offices, wages, sales and marketing, etc. Operating profits is a better indicator (EBIT or EBITDA) and also much closer to the holy grail of Free Cash Flow that companies need to keep an eye on to make sure they make payroll and fulfill their interest payments obligation, among other things

Exactly. Parent's comment is only meaningful if you completely ignore paying workers which seems pretty relevant if you're going to be talking about layoffs. I've found a lot of tech workers (including myself) really need to learn how to read an earnings statement. Coursera has an excellent Intro to Financial account course [0] that I've found very helpful in understanding what's really happening at these places. 0.…

Yeah, I'm pretty thankful for my 4 year technical program for having us do a couple of business course. One which was accounting and the majority of the work was the teacher walking us through reading financial statements of public companies.
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