The whole point of the Fed putting rates up was to cause mass unemployment so workers had no leverage so they'd accept lower wages and more money would go to capital holders. You can't blame CEOs for getting "ahead" on their Todo list...
Tell HN: Confluent laying off 8% of staff
241–250 of 329 posts
Re: Tell HN: Confluent laying off 8% of staff
#242Oh my sweet summer child.... As someone who lived through the .COM crash and implosion and then 2008, any company with "strong cash reserves" and "trajectory to profitability" is not making more money than they are spending. They are, to use the SV term - losing runway. This is catastrophic because it's infeasible to raise money right now to extend the runway. If the plane is not airborne (making significantly more m…
So for another summer child - What would be an actually good thing for a company to be saying?
Ironically - two very different things:
a) We are managing the company very conservatively and are cutting travel/advertising and projects that are not making money and shifting them to projects that do, and not replacing people who leave unless the CEO or board approves (ie, the do less better strategy)
-or-
b) We are in trouble, so we are going to address this now by a sizeable layoff, but with generous layoff terms. We will also kill anything that doesn't have a clear trajectory to be sucessfull at runway length * 0.75.
Where you want to avoid is in a company that does sequential waves of 5-10% layoff. That means that that they didn't focus enough and are now past V1, without enough velocity to takeoff (https://en.wikipedia.org/wiki/V_speeds). That's when the company suddeny laysoff the vast majority of their workers with crappy layoff terms.
Re: Tell HN: Confluent laying off 8% of staff
#243Earlier quoted context omitted.
if you don't have money to pay employees then they're out of a job, and if you don't grow you don't get investors and don't hire people please explain how "humanity" solves this
It’s called “Japan”. Low performers are kept in corporations to do nothing all day while many of their peers work themselves to death.
Are you implying 100000+ people getting laid off in a handful of months merely is about weeding off "underperformers"?
Re: Tell HN: Confluent laying off 8% of staff
#244Earlier quoted context omitted.
That seems absurd. I've worked at big companies. They sometimes have staff, often _lots_ of staff, like whole orgs, that are a net drain on the company. What's the alternative in that situation? Granted, getting into that situation was probably "executives making stupid mistakes" -- seems like it usually is -- and granted, they're probably not saying "we have to do these layoffs because I was an idiot last year", and…
> That seems absurd. I've worked at big companies. They sometimes have staff, often _lots_ of staff, like whole orgs, that are a net drain on the company. What's the alternative in that situation? Well, the evidence is that mass layoffs aren't having the result of being very positive for companies that engage in them. Given that what you say also feels true, in my experience, an explanation immediately suggests itsel…
I think its more complex than that: even if, by magic, you managed to lay off every non-contributing worker, and only them, the affect on employee morale is significant, and would cause contributing employees to leave completely or contribute less. Reducing the total output for the company.
And I'd also suggest that very few, if at all, employees has zero contribution. It's just that some of those contributions are invisible to you.
Re: Tell HN: Confluent laying off 8% of staff
#245> The findings of two decades of profitability studies are equivocal: The majority of firms that conduct layoffs do not see improved profitability, whether measured by return on assets, return on equity, or return on sales. Layoffs are especially hard on the performance of companies with a high reliance on R&D, low capital intensity, and high growth. Market response to layoffs was also less positive than might be exp…
The problem with this article is that it targets companies that are stable revenue-wise and have low capital intensity. Neither of these statements are true about startup companies unless the startup is managed very conservatively.
That essentially rules out any VC-related startup. VC's basically are a huge force-multiplier during up markets and black holes in recessionary periods due to the growth expectations (and the willingness to blank-check funding until the revenue goals are met).
Re: Tell HN: Confluent laying off 8% of staff
#246Earlier quoted context omitted.
What if the answer was "There's data to show layoffs are counter productive, not just for us but for most of these companies. They're jumping off a cliff and we don't have to follow" ?
I wanna learn more. Do you have a reference / pointer to this data?
I saw this posted a little bit ago:
https://news.ycombinator.com/item?id=34480314
Re: Tell HN: Confluent laying off 8% of staff
#247Earlier quoted context omitted.
"The reality" is jobs = people. We don't live in a vacuum. It's seriously not that hard either. Between the hundreds of thousands of regular people losing their livelihoods and some investors losing money ("don't invest what you can't afford to lose" something something), doesn't sound too complicated for me. Humanity is not opaque unless you make it so, like this particular system does. It's just people.
if you don't have money to pay employees then they're out of a job, and if you don't grow you don't get investors and don't hire people please explain how "humanity" solves this
Therefore coming back to my initial comment: the very system we live in is based on this conception that we have to forego treating people like humans and have to consider them as mere "resources" just to make it work. Not pretending like I have a solution in the current context. It just will never sit right with me, that's all.
Re: Tell HN: Confluent laying off 8% of staff
#248We're well into the cargo cult layoffs. CEOs need to look good to their bosses and your job is a sacrafice they are willing to make. I'm sure there are some who will make their decisions based on real data and analysis - but they'll make thier decisions independently of other firms actions. Seeing all this clustered behavior suggests little analysis is really being done here.
Especially given the strong economic numbers that just came out, yeah I don't buy the "bad macro climate" argument anymore. It's really plain as day: these CEOs make some cuts of 5-15%, their stock price goes up. This is a pattern we'll likely continue to see through this year. Honestly, the tech industry was due for some churn from an employer perspective, and all this talent circulating is going to up the competiti…
You should see people working in the financial industry right now. While there's one segment that's bearish and believes that the Fed will have to engineer a short recession to bring inflation under control, there's another, larger, stronger camp that believes we're in the end times for capitalism, and the endgame is to make money so cheap that everyone is paper rich.
There's an increasing atmosphere of bacchanalia in the markets - buy every dip, long every thing because they don't believe that the money can be unprinted and inflation thwarted. Might as well pump it up and make some money and hopefully, swing into some meaningful assets before it all comes crashing down.
Personally, I believe American capitalism is in the ICU right now. There's too much money in the system, and there's too much concern over the long-term viability of the USD as the reserve currency. All that money printing coupled with the war in Ukraine, American sanctions, and increasing refusal of the non-Nato countries to play ball with America (espcially China) means that the demand for all the USD printed is never going to be the same.
It's going to get very, very interesting in the coming couple of years.
Re: Tell HN: Confluent laying off 8% of staff
#249I really get the feeling that many companies are just blindly doing whatever other companies do. One starts large layoffs, and suddenly everybody is doing it. At other times, when one goes on a hiring spree, they all go. One tries to reduce salaries, they all do. One pays enormous bonuses, and they all do. It's like CEOs aren't really thinking for themselves, just copying whatever the market does.
The CEO answers to the board, and the board is usually of the type to at least ask the question "Everyone is jumping off a bridge, why aren't we?" And sadly the easiest answer is "we ARE jumping off the bridge, see?"
Given how much overlap there is between boards at these companies, it might not just be them seeing others doing it, it might also be that members of the board at company x are already involved in layoffs as board members of company y.
Re: Tell HN: Confluent laying off 8% of staff
#250Earlier quoted context omitted.
Yes. They never are. A recent study investigated this and neither stock price nor productivity nor profitability improved. All mass layoffs do is crater employee morale. And yes, it's a "others are jumping into the lake with their clothes on, let's get our brooks brothers shirts wet, too" thing without any rational cogitation involved..
What should a business do that has more people on payroll than their revenues can support?
Use those people to build products that increase revenues. Isn't that why they were hired in the first place?