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Layoffs Don't Work

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Re: Layoffs Don't Work

#21

Post by markus_zhang »

dustingetz wrote: post #8
DebtDeflation wrote: post #5

They used to be a once a decade "save the company during a recession" move. Now they seem to be a quarterly "manage earnings per share" move.

software development costs are out of control the whole industry is one big grift, there’s no accountability anywhere, 20% of the devs are doing 80% of the work, the business would instantly terminate the 80% for cause if they could only discern the difference, but they can’t, because the business side is also a big grift with the exact same problem all the way up to the founders recursively

The twist is that when you layoff the 80% who supposedly only did the 20% part, you pretty much still have to hire the same amount of people to do that 20%.

Re: Layoffs Don't Work

#22

Post by trescenzi »

roenxi wrote: post #17

> Research has consistently shown he was right about layoffs: They’re damaging to companies... The research is probably misleading. The damage was done to companies when the over-hired people who couldn't add enough value to justify keeping them employed. The layoffs are just when the damage is recognised. It is like borrowing a huge amount of money, using 90% of it it to buy prawns and leaving them out to rot for a…

This isn’t how all layoffs work though. Some, yes they are due to over hiring and a failure of management to plan. They are likely necessary for survival of the firm and generally last course of action. Although even those come with a cost to current and departing employees which harms the business.

But the ones being discussed in the article are the consistent ones. The ones you do while you’re ahead to make your balance sheet look better. Those come with a temporary balance sheet boost and all of the negative effects of any layoffs.

Re: Layoffs Don't Work

#23

Post by georgemcbay »

VWWHFSfQ wrote: post #14
dustingetz wrote: post #8

Earlier quoted context omitted.

software development costs are out of control the whole industry is one big grift, there’s no accountability anywhere, 20% of the devs are doing 80% of the work, the business would instantly terminate the 80% for cause if they could only discern the difference, but they can’t, because the business side is also a big grift with the exact same problem all the way up to the founders recursively

So much of the software industry is just an outrageous combination of inexperience and "YOLO". Every problem can be solved by just giving AWS another $100,000 this month because we don't have time (and don't know how) to make even basically optimized software. So just burn the gas and electricity and give more money to the YAML merchants at Amazon.

I still have PTSD from around 2012 when a company I worked for and loved very much (chumby) imploded financially and almost all of the employees including myself got vacuumed up in an acquihire-type deal into a streaming media company that was building a would-be netflix competitor.

Us former chumby developers were working primarily on the front-end across a variety of embedded-system-like devices (writing code for early versions of 'Smart' TVs from the likes of Vizio, etc) while another team was creating the backend and whenever they would show us the infrastructure diagrams of what they were working on they would just place a "HADOOP Server" wherever they had no idea how they were going to solve some large difficult problem, it was effectively a stand-in for "magic happens here".

Got to the point where there were a hilarious number of layers upon layers of little cylinder icons in the system design titled "HADOOP Server" all interlinked in non-decipherable directed graphs.

I'm pretty sure every single one of us left the new company within 6 months, I lasted about a month and a half.

Re: Layoffs Don't Work

#24

Post by jajko »

markus_zhang wrote: post #21
dustingetz wrote: post #8

Earlier quoted context omitted.

software development costs are out of control the whole industry is one big grift, there’s no accountability anywhere, 20% of the devs are doing 80% of the work, the business would instantly terminate the 80% for cause if they could only discern the difference, but they can’t, because the business side is also a big grift with the exact same problem all the way up to the founders recursively

The twist is that when you layoff the 80% who supposedly only did the 20% part, you pretty much still have to hire the same amount of people to do that 20%.

But with lower rates, and with abysmal rampup period (or even afterwards).

Don't blame managers, they just follow money, why else would they work those crappy jobs. Blame idiots who think short term bonuses should be massive instead of some long term performance and investment of oneself in company's success.

Re: Layoffs Don't Work

#25

Post by roenxi »

fzeroracer wrote: post #20
roenxi wrote: post #17

> Research has consistently shown he was right about layoffs: They’re damaging to companies... The research is probably misleading. The damage was done to companies when the over-hired people who couldn't add enough value to justify keeping them employed. The layoffs are just when the damage is recognised. It is like borrowing a huge amount of money, using 90% of it it to buy prawns and leaving them out to rot for a…

'The research is wrong because I said so' isn't exactly a compelling argument, and certainly not a strong enough one when you've been in the modern workforce long enough to recognize how badly layoffs are conducted at just about every company. I've seen enough 10x engineers get laid off to know that the idea that companies have any idea as to who is actually productive or not is just false.

1) But I included an actual argument and, furthermore, it assumed that the research is correct.

> I've seen enough 10x engineers get laid off...

2) That is sensible for the company. They have no idea how to use a 10x engineer, as can be detected by the fact that they're having layoffs. They don't know how to create value in the market and they're being forced into a position where they have to squeeze what they can out of what assets they have.

It isn't economically rational for them to employ 10x engineers in that sort of environment. The global and local optimum is to let those engineers go so they can do something valuable somewhere and keep some more 1x style engineers on the cheap.

If a company is having layoffs, that is the invisible hand of the market writing on the wall "THIS MANAGEMENT TEAM DOESN"T KNOW HOW TO MAKE MONEY AT THE MOMENT, STOP GIVING THEM IMPORTANT RESOURCES". That includes 10x engineers.

Re: Layoffs Don't Work

#26

Post by bell-cot »

Layoff are like hammers: When needed, in the hands of someone skilled, they work perfectly well. But such situations are sadly rare, compared to frustrated idiots grabbing hammers to get their quick "Hulk Smash!" dopamine hits.

Re: Layoffs Don't Work

#27

Post by csomar »

The layoffs are not the issue. It is the decision makers who took the two decisions to both over-hire and then mass-fire shortly after. GM is a great example. The company was the largest and one of the most innovative car manufacturers in the world. It doesn't stand a chance against BYD today and it is not by a lack of money (though maybe with a C-suite change).

So my opinion is, yes, the damage is done (or being done) but like GM, it'll probably take 10-15 years until we are in the visible territory. Maybe a bit shorter because this is tech.

Re: Layoffs Don't Work

#28

Post by matwood »

RicoElectrico wrote: post #4

The other question is why C-suite does even need to tell the respective division management to lay off employees if the actual goal is cost reduction. Shouldn't they impose a budget reduction target instead and trust them to allocate the savings between capex, opex and salary budget according to specific situation at hand?

> actual goal is cost reduction

For many companies the largest cost is labor. Also in many companies, managers amass power by the number of people they manage. If the C-suite doesn't explicitly push for layoffs they will likely not happen, causing them to not reduce costs as quickly as they wanted.

Re: Layoffs Don't Work

#29

Post by steveBK123 »

roenxi wrote: post #17

> Research has consistently shown he was right about layoffs: They’re damaging to companies... The research is probably misleading. The damage was done to companies when the over-hired people who couldn't add enough value to justify keeping them employed. The layoffs are just when the damage is recognised. It is like borrowing a huge amount of money, using 90% of it it to buy prawns and leaving them out to rot for a…

This would be more true of management did not play BS with the numbers constantly.

I worked at a firm that for 2-3 years straight would report great Q1,Q2,Q3 numbers.. tell employees it's looking like a good year. And then Q4 report a total wipeout loss that negated the quarterly earnings and swung the company to flat or a loss. Whoops, sorry, no raises, cutting bonuses.. and need to do some layoffs.

Behavior like this reminds us that the numbers are not real real in a scientific sense, but only in a relativistic accounting sense.

Re: Layoffs Don't Work

#30

Post by ozim »

dartos wrote: post #16
dustingetz wrote: post #8

Earlier quoted context omitted.

software development costs are out of control the whole industry is one big grift, there’s no accountability anywhere, 20% of the devs are doing 80% of the work, the business would instantly terminate the 80% for cause if they could only discern the difference, but they can’t, because the business side is also a big grift with the exact same problem all the way up to the founders recursively

Got news for you. It’s not the devs who are bloating development costs. It’s the layers of management making hour long meetings to discuss button placement. It’s the hours of retros, design meetings, and skip-levels designed to remove any personal investment or sense of ownership from everything. Since so few individuals are trusted with real decision making power, you need a lot more people to achieve some kind of c…

Second that, scrum teams having 3 business analysts, scrum master, product owner, ops/it, ux designer, 2 testers, 4 developers is basically how it goes.

Blaming developers in such scenarios is silly.

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