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Tell HN: Confluent laying off 8% of staff

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Re: Tell HN: Confluent laying off 8% of staff

#261

Post by misterbwong »

mcv wrote: post #24

I 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.

Reading these comments reminds me of how old (and jaded?) I am. We saw the same thing in previous recession-type environments (2000, 2008, etc).

Layoffs suck-they hurt everyone involved (except maybe for the shareholders?) and are a big big deal for each individual that it affects.

That being said, it doesn't take a genius to see that they are very useful from a company perspective. Given how difficult it is to fire underperformers, layoffs allow them to cut a huge swathe of underperformers (and, realistically, people they don't like) without opening themselves up to endless litigation. Yes, the justification can be as simple as "the economy looks like there is an economic downturn and see? the other companies in our industry are doing it too."

Smart companies treat it as a tool and use it sparingly, dumb companies over use it and kneecap themselves for the future.

Re: Tell HN: Confluent laying off 8% of staff

#262

Post by ajkjk »

bonsaibilly wrote: post #210
ajkjk wrote: post #147

Earlier 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 wonder if, despite not being a benefit, they avoid a worse outcome at the same time? perhaps the evidence can distinguish those, not sure. It seems like if "not a benefit" means "the stock or performance or profitability didn't go up"... well, I think stock prices are a very trailing indicator of the health the company, since executives are incentivized to pamper over anything bad about it. So the layoffs may reflect the fact that "things have been bad for a while" and thus the metrics staying flat would imply that they would have gone down if they _hadn't_ done it.

Re: Tell HN: Confluent laying off 8% of staff

#264

Post by trynewideas »

PragmaticPulp wrote: post #132
mcv wrote: post #24

I 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.

I don't know about Confluent, but I can tell you that sales (and therefore revenue) have seen significant drops in most industries. This is wholly expected in a rising rate environment. When sales drop, revenue also falls. When revenue falls, models get re-evaluated and numbers get re-calculated. Reducing expenses becomes a priority. When reducing expenses becomes a priority, SaaS contracts get evaluated very closely…

Does recruiting ever comprise more than 3% of a company's staff?

Re: Tell HN: Confluent laying off 8% of staff

#265

Post by snozolli »

EMM_386 wrote: post #232
BizarreByte wrote: post #78

Earlier quoted context omitted.

> I really get the feeling that many companies are just blindly doing whatever other companies do. A social contagion if you will. It doesn’t seem rational at all at this point. Hopefully some of the more naive people in the industry learn something from this. Your employer would happily kill your if it were legal and they made a cent more doing so, let alone something less like fire you.

> It doesn’t seem rational at all at this point. Layoffs are rational and are common in downward cycles. I get the feeling that a lot of the shock and awe here is due to age and a lot of people starting their careers during an extended boom period, particularly in tech which was getting absurd. The last few years in particular were far from rational. Now the Fed is raising interest rates, housing is cooling, cheap mo…

Layoffs are rational and are common in downward cycles.

What downward cycle?

All I'm hearing is panic and hand-wringing about the economy, but I don't see what the problem is.

We had a "recession" in Q1 and Q2 of 2022. GDP dropped from 20,006 to a low of 19,895, then it went right back to its previous growth path.

Inflation is high, but it's dropping. It maxed out at 9.1% in June of 2022. Now it's down to 6.5% and expected to drop in the upcoming update (Feb 14).

We weathered a global pandemic, subsequent supply chain issues, and a war on the other side of the world that disrupted the energy economy. We're doing great, but people are fretting like it's 2008.

Re: Tell HN: Confluent laying off 8% of staff

#266

Post by [deleted] »

misterbwong wrote: post #261
mcv wrote: post #24

I 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.

Reading these comments reminds me of how old (and jaded?) I am. We saw the same thing in previous recession-type environments (2000, 2008, etc). Layoffs suck-they hurt everyone involved (except maybe for the shareholders?) and are a big big deal for each individual that it affects. That being said, it doesn't take a genius to see that they are very useful from a company perspective. Given how difficult it is to fire…

[deleted]

Re: Tell HN: Confluent laying off 8% of staff

#267

Post by maerF0x0 »

andsoitis wrote: post #202
maerF0x0 wrote: post #183

Earlier 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?

Here's an article and it's "update" (continuation of the same)

https://hbr.org/2018/05/layoffs-that-dont-break-your-company

https://hbr.org/2022/12/what-companies-still-get-wrong-about...

Re: Tell HN: Confluent laying off 8% of staff

#268

Post by adamwong246 »

redleggedfrog wrote: post #153

Layoffs signal weakness, from every angle. They hired indiscriminately and now are doing catch and release. Or they lacked foresight of their market. Or they are financially mismanaged. Or they are directed by a unqualified board. Or they are unable to cope with their market shrinking. Or they are a behemoth that grinds up workers as part of their operation (a lot of what we're seeing now). Or they're jumping off the…

So many companies just lit all their "social capital" on fire, especially Google. They have maintained the "don't be evil" mantra for so many years but who will ever believe that lie ever again?

Re: Tell HN: Confluent laying off 8% of staff

#269

Post by maerF0x0 »

InTheArena wrote: post #245
maerF0x0 wrote: post #179

> 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…

> Layoffs are especially hard on the performance of companies with a high reliance on R&D, low capital intensity, and high growth.

Start ups are 2 out of 3.

The thesis is that with layoffs the outcome is worse than without. So we can make all kinds of rhetorical debates, but the data seems to suggest for some causal reason companies that do layoff do worse off in the subsequent years.

Re: Tell HN: Confluent laying off 8% of staff

#270

Post by hnfong »

folkrav wrote: post #172
surement wrote: post #162

Earlier quoted context omitted.

what about accountability to the people who took a risk investing in the company? maybe the CEO didn't predict the future however many months or years ago to get to a point where no layoffs would've been necessary, but maybe this would've been at the cost of less growth, possibly having worse consequences the idea of "humanity" is completely opaque, it's not that hard to look at the reality instead

"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.

> It's seriously not that hard either.

Hah. Suggesting an unworkable solution is of course trivial, never mind the centuries of debate of all the shades of economic systems like cutthroat capitalism, democratic socialism, dictatorship of the proletariat and everything in between.

I mean, this is like saying Robin Hood was a serious philosopher of social economics instead of a folktale, and "robbing the rich to feed the poor" is a legit strategy that can and should be implemented under the current capitalist system.

And somehow you'd think I was the arrogant one around here for saying there's a lot we don't understand (especially about humanity, i.e. ourselves!).

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