Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Layoffs Don't Work

thehustle.co

Post reply on HN
Print view View original

131–140 of 801 posts

Re: Layoffs Don't Work

#131

Post by dylan604 »

fx1994 wrote: post #53
marto1 wrote: post #46

Earlier quoted context omitted.

> But everyone knows that's not what killed them. Another addition I'd like to add here is more often then not wrong people get booted while the "dead weight" tends to stick around and becomes even deader due to a motivation fall from the layoff. So maybe it doesn't kill, but for sure exacerbates an already bad situation.

We are a small team in big company, and management that made wrong decisions is still somewhere there but not my direct management, still getting same paycheck, car, cards and benefits but new managers (that accepted to take over and got brand new car for 100k€, cards and bonuses, bells and whistles) started to layoff workers so we know this is the end for my team, and of course they will do whatever it takes to "sav…

If your small team in a big company does not directly generate money, then you’d definitely be ripe for elimination. Time and time again we’ve seen examples of trams that are critical to supporting various revenue generating parts of the company while not directly making money themselves get cut as an “obvious” way to save money when only looking at the books. Been there.

Re: Layoffs Don't Work

#132

Post by glitchc »

andrenotgiant wrote: post #44

> After the early-2000s dotcom bust, Bain researchers found that stock prices for S&P 500 companies that had no layoffs or laid off less than 3% of their workforce increased an average of 9% in the next year. Meanwhile, stock prices were flat in companies that laid off between 3%-10% of their workers, and prices plummeted 38% for companies that laid off more than 10%. Failing companies go through layoffs. Companies l…

This is it exactly. Layoffs are a symptom of failure, not a cause of savings.

Re: Layoffs Don't Work

#133

Post by logsr »

alphazard wrote: post #98

There is a theory about large complex systems which seems to be true in biology and maybe applies here. Intentional downsizing during times of stress works when it preferentially targets defective or dysfunctional components of the larger system. The system improves because the worst parts were removed. Layoffs don't help companies unless they can reliably remove the worst parts. At most large public companies, the c…

Large tech companies are inefficient and have very poor engineering productivity but this is largely for systemic reasons. They definitely do not have any mechanism for identifying high performers.

The basic problem they face is that they pay a fixed wage for complete IP ownership (horrible deal) and so they intentionally do not measure and reward actual performance because they do not want to compensate high performers based on the value they create.

There isn't really a solution because these companies are making rational profit maximizing decisions, it just happens that mediocrity and managed decline of locked in revenue streams is profit maximizing for them.

Re: Layoffs Don't Work

#134

Post by nthingtohide »

gruez wrote: post #105
nthingtohide wrote: post #91

Earlier quoted context omitted.

Can we have a different kind of stock market which forces participants to consider long term outcomes more? E.g. no HFT firm should be able to make a profit from such a stock market. Selling stocks earlier and often should result in a penalty or percentage being taken away as a fee. As a retail investor I would love to use invest and forget strategy based on trends observed in such a stock market.

>E.g. no HFT firm should be able to make a profit from such a stock market. Selling stocks earlier and often should result in a penalty or percentage being taken away as a fee. Maybe by "HFT" you only mean "those evil hedge funds that are pushing companies to chase next quarters' earnings", but there's nothing fundamentally wrong with high frequency trading. Market making[1] is high frequency trading, and basically i…

All these HFT stuff reminds me of chinese event where people send each other gift money as a good will gesture. Revenue is high but no meaningful transaction has happened. The money is just being exchanged between the same top HFT firms. And the best of our minds are fighting it out in the arena of algorithms rather than creating real world value.

Re: Layoffs Don't Work

#135

Post by thijson »

nthingtohide wrote: post #91
kibwen wrote: post #58

Earlier quoted context omitted.

The stock market is just a predictions market, and any predictions market at scale destroys the subject of its prediction.

Can we have a different kind of stock market which forces participants to consider long term outcomes more? E.g. no HFT firm should be able to make a profit from such a stock market. Selling stocks earlier and often should result in a penalty or percentage being taken away as a fee. As a retail investor I would love to use invest and forget strategy based on trends observed in such a stock market.

It's not really high frequency trading in the sense of day trading, it's a bit of a misnomer. I would say it's actually low latency trading, the number of trades isn't huge. It ensures that linkages in the market operate quickly. Linkages between a stock price and its respective options. Or linkages between an index ETF and its components. The price discovery process should be fast, it benefits all of the market participants.

Re: Layoffs Don't Work

#136

Post by theli0nheart »

andrenotgiant wrote: post #44

> After the early-2000s dotcom bust, Bain researchers found that stock prices for S&P 500 companies that had no layoffs or laid off less than 3% of their workforce increased an average of 9% in the next year. Meanwhile, stock prices were flat in companies that laid off between 3%-10% of their workers, and prices plummeted 38% for companies that laid off more than 10%. Failing companies go through layoffs. Companies l…

The key takeaway for me is that layoffs are an effect, not a cause, of company failure.

The quoted text is a good example of this. If a company is struggling strategically or economically, and doesn't do a layoff, it's just going to struggle more, and fail more quickly. Companies that aren't laying people off are likely not even considering layoffs, because their businesses are actually doing well.

So, it's pretty obvious to me that companies in that cohort would see the biggest stock price appreciation, because layoffs are an indicator of poor future performance.

Re: Layoffs Don't Work

#137

Post by sumeno »

alphazard wrote: post #116
sumeno wrote: post #102

Earlier quoted context omitted.

Twitter was profitable before the takeover and now it is not

Maybe we disagree about what "profitable" means. Posting an authoritative source, so others can decide for themselves. https://stockanalysis.com/stocks/twtr/financials/

So over the 4 years before the takeover they had a net profit of $1.3 billion. What's their profit been in the 4 years since?

Re: Layoffs Don't Work

#138

Post by hkpack »

alphazard wrote: post #116
sumeno wrote: post #102

Earlier quoted context omitted.

Twitter was profitable before the takeover and now it is not

Maybe we disagree about what "profitable" means. Posting an authoritative source, so others can decide for themselves. https://stockanalysis.com/stocks/twtr/financials/

I don't have that much of an experience analysing similar reports, but it seems to me to be a healthy and growing company?

If you mean a negative cash flow and operating income - it doesn't mean much, as we need to know why.

Taking into account the jump in "Revenue", positive "EBIT" and so on, I would imagine that it was because of some sort of "strategic investment", like some acquisitions probably?

What am I missing? I would definitely be happy with such reports if that was my company.

Re: Layoffs Don't Work

#139

Post by yalogin »

Layoffs are a blunt instrument. I don’t know if al layoffs should be seen through the same lens. I see layoffs as signals from the companies. They see the future as unsure and so they want to reduce costs. That should be an immediate layoff for the ceo and his team

Re: Layoffs Don't Work

#140

Post by dpkirchner »

billy99k wrote: post #126
thrance wrote: post #15

Earlier quoted context omitted.

I'll start to call this mindset the "DOGE mind-virus": "80% of workers are doing absolutely nothing and can be cut with no repercussions whatsoever". Sure buddy.

Well, it worked for Twitter. Lots of people screamed that Twitter would implode withing 6 months, after the massive cuts. There was some scrambling for a while, but I haven't noticed any issues. In fact, they've added tons of new features and Grok AI (which is much better than competitors).

Last I heard Twitter is so desperate they've resorted to suing former customers who stopped buying poorly performing ad space.

Edit: removed supposition

Post reply on HN