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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

#271

Post by e40 »

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.

If you think about it, CEOs are just people that are influenced by events like the rest of us. They are also a group that usually socialize with other CEOs and I have noticed this time the mantra of "preserve cash" has been a strong signal being shared in that group.

The thing is, in a lot of the cases, the companies preserving cash by laying off workers aren't really saving a significant amount of cash, compared to the amount they have on hand. So, it turns into some sort of lemming behavior.

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

#272

Post by EMM_386 »

snozolli wrote: post #265
EMM_386 wrote: post #232

Earlier quoted context omitted.

> 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 ex…

These companies are using forward-looking metrics to make these types of decisions, it really isn't follow-the-leader.

I don't have access to the data, but it's quite possible with interest rates rising, high inflation, and tightening monetary policy that they are seeing slowing growth/sales. Companies want to get out ahead of that, especially with the massive (and frankly absurd) hiring that these companies did over the last 2 years.

I'm not buying that Microsoft laid of people because Google laid off people, and Spotify laid off people because Microsoft laid off people. Somewhat unfortunately, these public companies are expected to show constant revenue growth, and they will "trim the fat" at a moments notice.

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

#273

Post by HeyLaughingBoy »

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…

> So in the end, they don't solve the problem you're identifying

It may be unpopular to say this, but of course it does. Just hire more people if you need to and hope that you're making the right decision. Yes, it has a terrible effect on employee morale, but that's a tough thing to quantify so it won't show up on the balance sheet.

It's too soon to know if the impact of layoffs on most of the companies doing them is positive or not. twitter is an anomaly: that was driven by basic stupidity!

When the $BIGCO I worked for was acquired, instructions were to cut 8% headcount across the board. We were explicitly told that they expected that some valuable people would be cut accidentally, but that's unfortunate. No one should be unreplaceable and if they really are, this is a way to find out and change processes so it can't happen again.

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

#274

Post by HeyLaughingBoy »

bombcar wrote: post #140
im_down_w_otp wrote: post #127

Earlier quoted context omitted.

What should a business do that has more people on payroll than their revenues can support?

I think the argument is that you shouldn't get into the position where mass layoffs are the solution, just like you shouldn't get into the position where gastric bypass surgery is your only option. Something like each team is maintaining themselves at a proper rate, laying off inside the team as necessary. But even then you will at times have to fire entire teams, but those aren't really a "mass layoff" so much as "w…

Yeah, but reality bites. You're in the situation that you're in and you have to deal with what's in front of you.

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

#275

Post by vineyardmike »

ajkjk wrote: post #147
hallarempt wrote: post #84

Earlier 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..

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?

It’s tough. Look at Amazon. They cull the bottom 5% every year. It has a negative affect on morale because everyone is continuously on edge and having a bad month or two can be dangerous. Look at a layoff, it craters morale and reduces productivity.

The best bet seems to be to grow slow, hire and retain the best, and fire the low performers only as needed.

After that, look at corporate giants like IBM. They are laying off, yes, but historically they just lurched along, providing a paycheck to everyone.

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

#276

Post by progman32 »

claytonjy wrote: post #171
ramesh31 wrote: post #141

Earlier quoted context omitted.

>When reducing expenses becomes a priority, SaaS contracts get evaluated very closely. Unnecessary seats are removed. Contracts are re-negotiated. Income for SaaS companies like Confluent drop rapidly, and they may continue to drop more. This has been a long time coming. Some of the numbers I have been seeing for these contracts are truly mindblowing for the value delivered. The days of gouging enterprise on these ra…

Slack is an interesting one. Suppose you're a company spending a lot on it, too much. What are your options? Replacing slack with a comparable like Teams or Gchat is at least a step back in user-friendliness that will be grumbled about by engineers and others, and if you use a lot of integrations there might be significant switching costs. Moving away from instant messaging as a communication pattern sounds great to…

This is exactly what's happening at a previous employer. We used slack for near a decade with tons of integrations. It's now being unceremoniously ripped out because Teams is "free". Will probably cost them more than they're saving from the contract just because of the migration cost.

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

#277

Post by varjag »

claytonjy wrote: post #171
ramesh31 wrote: post #141

Earlier quoted context omitted.

>When reducing expenses becomes a priority, SaaS contracts get evaluated very closely. Unnecessary seats are removed. Contracts are re-negotiated. Income for SaaS companies like Confluent drop rapidly, and they may continue to drop more. This has been a long time coming. Some of the numbers I have been seeing for these contracts are truly mindblowing for the value delivered. The days of gouging enterprise on these ra…

Slack is an interesting one. Suppose you're a company spending a lot on it, too much. What are your options? Replacing slack with a comparable like Teams or Gchat is at least a step back in user-friendliness that will be grumbled about by engineers and others, and if you use a lot of integrations there might be significant switching costs. Moving away from instant messaging as a communication pattern sounds great to…

Nah noone's going to make a fuss out of it when people get axed left and right.

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

#278

Post by InTheArena »

maerF0x0 wrote: post #269
InTheArena wrote: post #245

Earlier quoted context omitted.

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.

Startups don't survive to later years in limited runways circumstances unless they decrease their spend. There is a survivorship bias point of view - but the critical point is that startups are not low capital intensity.

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

#279

Post by mediaman »

astrea wrote: post #201
InTheArena wrote: post #56

Oh 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?

Profitability and low debt.

If you're making money and don't owe money, you can't go bankrupt.

Of course, profitable companies can become unprofitable, especially in a negative environment, so the more profitable it is, the safer it is.

The only thing that stops the timer on the bomb is taking in more money than you spend.

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

#280

Post by folkrav »

hnfong wrote: post #270
folkrav wrote: post #172

Earlier 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.

> 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 t…

I didn't suggest a solution. I literally just said "humanity" is people, and our system treating people like numbers on a spreadsheet will never sit right with me.

The rest is you going on a tangent.

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