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“Copycat” layoffs won’t help tech companies or their employees

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Re: “Copycat” layoffs won’t help tech companies or their employees

#181

Post by mrj »

rsj_hn wrote: post #177
tw20212021 wrote: post #84

Earlier quoted context omitted.

How is the 'massive' increase in cost of capital affecting Google, a company making 60bln profit a year from mostly services?

I will assume you are asking in good faith, so here goes. What you think of as "profit" -- e.g. just some random, arbitrary, completely free bonus that Google should be grateful to have at all -- is actually the cost of capital for Google. It is a payment to equity , and the amount of the payment is determined by the interest rate as well as the time path of expected future earnings, adjustment for risk, and other fa…

Serious question: I don't follow what you mean by payments on equity? Google doesn't pay dividends it appears:

https://www.dividend.com/stocks/communications/media/interne...

It's a pure growth stock right? I thought any initial investors exit during the IPO.

Re: “Copycat” layoffs won’t help tech companies or their employees

#182

Post by jmyeet »

idopmstuff wrote: post #56
tarr11 wrote: post #31

The professor recommends across the board pay cuts as an alternative to layoffs. > One thing that Lincoln Electric, which is a famous manufacturer of arc welding equipment, did well is instead of laying off 10% of their workforce, they had everybody take a 10% wage cut except for senior management, which took a larger cut. So instead of giving 100% of the pain to 10% of the people, they give 100% of the people 10% of…

I think the problem with this strategy is that it causes the wrong people to leave. If you're a top performer, you're going to feel like a 10% pay cut is very unfair, and you're going to be able to get another job elsewhere fairly easily, even in this environment. If you're not performing particularly well, it probably doesn't feel as unreasonable, and even if you don't like it, it's tough to leave. When done correct…

This is, for lack of a better term, "capitalist brain rot". It may even be "American brain rot". I don't mean this in a disparaging way to you, individually, by the way.

Myth #1: Most people believe they're "above average". In your post you talk about cutting the "bottom 10%". You feel comfortable with that because you likely believe you're not one of th ebottom 10%. It's yet another example of how true the Steinbeck quote [1] is about Americans being "temporarily embarrassed millionaires".

Myth #2: These layoffs are targeting "low performers". This is a myth for two reasons. First, it implies the myth of meritocracy. There are so many ways that meritocracy is a lie. The second way is that the company won't be targeting the bottom 10%. They will basically pick names from a spreadsheet, save anyone leaders vouch for, possibly skew layoffs towards projects getting killed at the same time and look at the demographics of the layoff group to make sure it can't be perceived as discriminating against a particular class such that the company might open itself up to litigation for discrimination.

These layoffs really are the worst kind of virtue signaling.

[1]: https://www.goodreads.com/quotes/328134-john-steinbeck-once-...

Re: “Copycat” layoffs won’t help tech companies or their employees

#183

Post by UncleMeat »

msbarnett wrote: post #151
in_cahoots wrote: post #112

Earlier quoted context omitted.

Where would you go in this environment? Most of the top-name companies have had layoffs themselves, or at the very least are at the hiring freeze stage of the layoff routine.

There’s tons of very profitable companies hiring right now - the “top-name” companies doing layoffs were all “growth-first, profit-never” types. We’re not in an industry-wide downturn and there’s a hell of a lot more out there than FAANG or MANGA or whatever we’re calling it now.

Google, Microsoft, Facebook, and Amazon have made an absolute shitload of money. They are among the most profitable companies in the history of humanity. Definitely not "profit-never."

Re: “Copycat” layoffs won’t help tech companies or their employees

#184

Post by jmyeet »

wpietri wrote: post #4

I love this point: "The tech industry layoffs are basically an instance of social contagion, in which companies imitate what others are doing." I really wish for a less supine tech press. I've not seen any of these titans of industry being held accountable for the apparent major mistakes of overhiring. And I'm not even talking actual consequences here; these people will surely get bonuses for this. I'd just like to s…

You're exactly right.

The research has shown that these layoffs are performative, meant to boost profits and/or share price right before bonus season and any "savings", which largely aren't real because of layoff costs, lost value from those employees and the acquisition costs of new employees in the next hiring wave, just go to dividends and/or share buybacks anyway.

If CEOs really were taking "full responsibility", Zuckerberg (as one example) would be facing some pretty hard questions about spending tens of billions on the metaverse (which no one wants and has no path to recoup that "investment"), which is many multiples of any supposed savings from Meta's layoffs.

Re: “Copycat” layoffs won’t help tech companies or their employees

#185

Post by halgir »

TrainedMonkey wrote: post #114
idopmstuff wrote: post #56

Earlier quoted context omitted.

I think the problem with this strategy is that it causes the wrong people to leave. If you're a top performer, you're going to feel like a 10% pay cut is very unfair, and you're going to be able to get another job elsewhere fairly easily, even in this environment. If you're not performing particularly well, it probably doesn't feel as unreasonable, and even if you don't like it, it's tough to leave. When done correct…

This ignores the morale. I've been in both situations and the pay cut definitely felt like "we're in this rough economic situation together". Compare this with a layoff where I made my peace while waiting for "you still have a job email" and started interviewing shortly after. Of course pay cuts always ignore shareholders as they are really getting the benefit of paying less for same number of people.

> Of course pay cuts always ignore shareholders as they are really getting the benefit of paying less for same number of people.

Perhaps this could be mitigated by equity-based compensation equal to the amount reduced in salary. It won't make up for the lost cash, especially if the company is in a place where it needs to take such measures, but it would give more meaning to the "in it together" message.

Re: “Copycat” layoffs won’t help tech companies or their employees

#186

Post by janalsncm »

roncesvalles wrote: post #145
in_cahoots wrote: post #126

Earlier quoted context omitted.

That’s true, but those same companies still wound up doing layoffs later on. So if your criteria is not to work at a company without layoffs then you’re still SOL.

I'd rather join a company post-layoff than pre-layoff.

Of course. But in a recession there can be multiple rounds of layoffs.

Re: “Copycat” layoffs won’t help tech companies or their employees

#187

Post by Der_Einzige »

ericb wrote: post #27

The real winners will be the next tier down in the hiring hierarchy. They are starved for talent. While not as high-paying, or glamorous, they've had jobs sitting open for a while. When developers are needed for growth initiatives that can drive a stock multiple off more than just current earnings, the cycle will begin again.

Next tier down is your Intel's, your IBMs, and others who pay below market rate but are huge blue chips.

They are also in trouble.

Re: “Copycat” layoffs won’t help tech companies or their employees

#188

Post by 2devnull »

This is just bias pretending to be truth.

Where was this “expert” in contagion when copycat hiring was taking place?

Does macroeconomics have any impact on labor? What is the “dual mandate” of the fed?

If you buy this nonesense you signal your views have no intellectual merit, and you’re best to simply ignore.

Re: “Copycat” layoffs won’t help tech companies or their employees

#189

Post by janalsncm »

flashgordon wrote: post #141
idopmstuff wrote: post #56

Earlier quoted context omitted.

I think the problem with this strategy is that it causes the wrong people to leave. If you're a top performer, you're going to feel like a 10% pay cut is very unfair, and you're going to be able to get another job elsewhere fairly easily, even in this environment. If you're not performing particularly well, it probably doesn't feel as unreasonable, and even if you don't like it, it's tough to leave. When done correct…

One thing I've seen "performance" is largely subjective. It is not just X cls or Y design docs (and you can see how these artifacts are easily gameable). A large part is visibility, likeability and awareness of org politics. A lot of them are maximizing personal gain over company gains. As a reasonably well-performing manager and former IC (as well as getting my share of not so great ratings) this was the game I hate…

It’s difficult to measure performance even in the abstract. Every person in the company is a node in the network and even if a person’s objective metrics are lower than another’s, it could be that removing that node destroys institutional knowledge that causes everyone else’s performance to drop.

And as far as objective metrics, those are a crapshoot too. See: the software interview process, where people memorize useless toy problems into their brain so they look prepared for performative problem solving.

Re: “Copycat” layoffs won’t help tech companies or their employees

#190

Post by digitalsushi »

notfromhere wrote: post #88
idopmstuff wrote: post #56

Earlier quoted context omitted.

I think the problem with this strategy is that it causes the wrong people to leave. If you're a top performer, you're going to feel like a 10% pay cut is very unfair, and you're going to be able to get another job elsewhere fairly easily, even in this environment. If you're not performing particularly well, it probably doesn't feel as unreasonable, and even if you don't like it, it's tough to leave. When done correct…

If you are a top performer, you're gonna leave one way or another. Because you have options.

Someone on my team said this year after about 30% of my team left for better jobs: "Why is it only the people who can fly, are the flight risks?"
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