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Why is every layoff 10-15%?

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Re: Why is every layoff 10-15%?

#191

Post by 55555 »

rightbyte wrote: post #183
55555 wrote: post #150

Earlier quoted context omitted.

Conventional management advice -- at least that I've gotten -- is that you cam increase people's salaries, but you can't cut people's salaries. Without a very unique culture, they take it personally and will likely quit. Better to fire underperformers. Side note: if staff took better to getting their pay cut, they'd get more frequent (faster) raises. When a company is suddenly more profitable, compensation increases…

> but you can't cut people's salaries What? You can. Many companies even do it every year with some arbitrary bonus system.

I said salary, not total comp. Employees often don’t consider bonuses as “true” salary as they aren’t guaranteed, much to the dismay of the employers who pay them with real money. Just my limited experience.

Re: Why is every layoff 10-15%?

#192

Post by seanhunter »

ownagefool wrote: post #165
seanhunter wrote: post #129

When I was running a startup there were lots of times when I felt kind of lost and it's very tempting to listen to things like this because they seem plausible. It's a huge mistake. This kind of generic armchair general "advice"[1] is everywhere when you run a company and is basically completely useless because every company is a complex and unique special case and if you're in charge you don't have to make the decis…

I wouldn't hold any special reverence for McKinsey. In general with any of the management consultants, you're going to get people with very little actual experience telling you how to run your company. Whilst some of the stuff, usually more accountancy / factual based, doesn't require experience, and thus may be delivered to a high standard, you're also going to got a bunch of hot takes that don't make sense in reali…

Completely agree. We had McKinsey crawling all over one company I worked for and in the "workstream" I was the main point of contact for they had the first meeting where they "were in listening mode" and at the end of the meeting I said "look, if your plan for this workstream is to take everything I've just told you and put it on powerpoint slides and tell it back to us while charging for your time that's not going to work. So if we have a session tomorrow you actually have to bring something". They called our CEO and shut our workstream because they said they didn't think they could add enough value.

All the other workstreams continued for a while with them burning our investors' money and also all ended with a big nothingburger.

Basically the team we worked with had one guy who was genuinely brilliant - razor sharp, really knew his stuff etc just great - and like 8 people there whose function was to pad the billable hours, make slides, carry printouts and drink the free coffee.

Re: Why is every layoff 10-15%?

#193

Post by Kiro »

Clent wrote: post #62
TexanFeller wrote: post #45

Earlier quoted context omitted.

> but many CEOs will tend to believe that things will go better with everyone back in the office Many of us SWEs believe the same!

Many or a few? Most software engineers find themselves most effective in work from home. This breaks in favor at 3:4 or higher. The software engineers that want to work in office are the odd-balls. I am interested in the break down when one factors in whatever concept of '10x developers' -- which do the most productive of us prefer?

You're conflating productivity with the wish to WFH. I like working from home because it's easier to slack off and pretend to work. I know a lot of people are the same, whether they admit it or not.

I also claim that I'm more productive but it's obviously a lie in order to continue WFH.

Re: Why is every layoff 10-15%?

#194

Post by benj111 »

blowski wrote: post #171
lozenge wrote: post #160

Earlier quoted context omitted.

They did say it includes taxes, maybe they are including a 3% pension contribution or even Employers' NI which can run to 12% of salary.

The taxes I mentioned are part of the cost of running an office - especially local government taxes ("rates" in UK parlance). The £9K figure _doesn't_ include taxes on individuals, such as NI and pension contributions. That comes from a different budget, and is typically an extra 25% on top of salary.

25%?

Employer NI contributions are ~1/2 that. What other taxes do employers inccur?

Re: Why is every layoff 10-15%?

#195

Post by nivenkos »

blowski wrote: post #127
spamizbad wrote: post #113

Earlier quoted context omitted.

CEOs are also going to face significant budget scrutiny and will have to really justify signing a 10 year lease (which won't be cheap) instead of investing in things that are proven to drive growth. Class A office space outside of super expensive cities runs about $35/sqft on average. Employees need about 175 square feet each. So every employee is $6125 more expensive -- but that's only assuming you're renting somepl…

Your figures sound about right, based on my experience. In London, the cost per employee I’ve used is £15k pa. That includes office space and maintenance, taxes, plus IT costs, entertainment, HR, etc. The cost for fully remote employees is £9k pa. That is, the cost of the office is £6K per employee. There are additional costs for remote employees, like remote support. But these balance against not having to buy offic…

But in London you have to pay those employees more if they're paying to commute (and wasting hours of their day on the packed trains every day), buy food in the city, etc.

I really can't see it being worth it in massive, overpriced cities.

Re: Why is every layoff 10-15%?

#196

Post by blowski »

benj111 wrote: post #194
blowski wrote: post #171

Earlier quoted context omitted.

The taxes I mentioned are part of the cost of running an office - especially local government taxes ("rates" in UK parlance). The £9K figure _doesn't_ include taxes on individuals, such as NI and pension contributions. That comes from a different budget, and is typically an extra 25% on top of salary.

25%? Employer NI contributions are ~1/2 that. What other taxes do employers inccur?

I lumped a few costs onto that, which aren't taxes, but are tied to salary. Pension contributions, life insurance, health insurance, for example - these all come out of the same budget as national insurance contributions.

Re: Why is every layoff 10-15%?

#197

Post by m0llusk »

bbreier wrote: post #13

> Remote work > Anticipate more mid-size and smaller companies will go back more fully into the office as times get tougher. This will not be one size fits all, but will be an increasing trend. Up to this point in the article, whether you agree or disagree with the points, the author offers some arguments and reasoning supporting each. Here, they simply assert that small and mid-size companies will go into the office…

Remote is cheaper and there is a squeeze happening.

Re: Why is every layoff 10-15%?

#198

Post by 1letterunixname »

I just survived a round of layoffs at someplace mentioned.

I think this is overthinking it or looking for a conspiracy theory. Layoffs aren't deeply calculated or hand-wrung over in advance. They're somewhat arbitrary and ambiguous but purposeful: to stop the hemorrhaging of cash. There's no clean or perfect way to do a layoff precisely in limited time, so they happen in discrete units of reduction in particular areas. They're rarely pleasant and never perfect.

Re: Why is every layoff 10-15%?

#199

Post by blowski »

nivenkos wrote: post #195
blowski wrote: post #127

Earlier quoted context omitted.

Your figures sound about right, based on my experience. In London, the cost per employee I’ve used is £15k pa. That includes office space and maintenance, taxes, plus IT costs, entertainment, HR, etc. The cost for fully remote employees is £9k pa. That is, the cost of the office is £6K per employee. There are additional costs for remote employees, like remote support. But these balance against not having to buy offic…

But in London you have to pay those employees more if they're paying to commute (and wasting hours of their day on the packed trains every day), buy food in the city, etc. I really can't see it being worth it in massive, overpriced cities.

Absolutely, there are hidden costs, in both directions.

If you only hire within the pool of people who are willing and able to commute to your office, you'll both need to pay more and have less choice. Workers are more tired as they spend hours commuting every day.

On the other hand, it's harder to develop juniors if all your seniors are working from home. Written communication lacks context that helps difficult conversations move forward. Silos build up as people in different teams never see each other.

In the long-term, I believe the broader benefits to society and the planet mean fully remote working will become almost universal. In the meantime, a hybrid model of mostly remote with broadly-attended meetups is the best combination. But some companies will decide that everybody being in the office all the time is right for them, and they can perhaps leverage some benefits of doing so.

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