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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

#301

Post by di456 »

ascotan wrote: post #129
di456 wrote: post #7

This misses the main driver. Valuations are no longer based on growth. The entire market has shifted to profitability over growth. Companies with a stronger balance sheet coming out of the recession will be better positioned for the long term. Seems that companies that gained their valuations through growth weren't sustainable in the long run. And at a macro level, economic policy has largely deferred recessions sinc…

Cutting people as a form of making companies more profitable doesn't work as per the article.

Speculation, but maybe companies as a whole aren't great at repurposing employees from working on growth projects to working on profit generating projects.

Which executive wants to add more headcount expenses to their P&L responsibilities, without a compensating increase in revenue? There's a lot of internal politics that are likely insurmountable for most companies. Especially big companies that are inflexible and are hard to course correct.

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

#302

Post by zeruch »

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 was at a firm that did a similar strategy once (during the 2008 hellscape) and it worked (20% across the board except for one non-salaried (hourly) team that was so junior cutting by 20 was just sadism).

It kept things afloat, and it definitely favored the workers (myself included at the time) than anyone else.

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

#303

Post by nswest23 »

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…

> this increases the risk profile on the company

not sure why you think this is categorically true.

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

#304

Post by janalsncm »

jmyeet wrote: post #256
janalsncm wrote: post #196

Earlier quoted context omitted.

When you say meritocracy is a lie, are you referring to Daniel Markovits by any chance? He had a very stimulating conversation with Sam Harris in 2020 that I’ve recently re-listened to. Meritocracy fails to live up to its promise because high performing parents always help their kids by artificially boosting their competence with e.g. test prep services. So tests tend to measure preparedness for the test, rather than…

Meritocracy is a form of propaganda to keep a compliant populace in general and workforce in particular. It is the idea that if you work really hard you will be rewarded. It is the basis for most people thinking they're above average. It is why so many people believe they'll be Elon Musk one day so they die on the hill opposing any effort to tax the 10 richest people in America slightly ore because, hey, that will be…

It was kind of remarkable, I disagreed with your initial statement that meritocracy is “propaganda” but almost everything that followed was something that I could’ve wrote.

It seems to me that de facto meritocracy largely does not exist because it can be gamed. This leads to insulting post-hoc justifications for hoarding wealth despite the fact that merit often has nothing to do with it. That ethos is absolutely propaganda.

Harvard would be more honest if they just auctioned seats to the highest bidder. At least that would have transparency and efficiency that their current process lacks.

I haven’t given up on the idea of meritocracy though. It’s certainly better than hereditary rule. The only solution I can see is to fix the measures of merit so that they’re harder to game.

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

#305

Post by indymike »

I_AM_A_SMURF wrote: post #284
indymike wrote: post #236

Earlier quoted context omitted.

> The professor recommends across the board pay cuts as an alternative to layoffs. This is the fourth bout of "layoffitis" I've lived through in the tech industry, and I think this professor is really nailing it. > Seems like it would also increase stress and encourage top performers to seek new opportunities. You don't have to cut pay for key performers. You can offer retention incentives to key people. You can cut…

But the thing is... in tech usually it doesn't work that way. A 15yr tenured L6 is most likely making less than a newly hired L6. Why would you fire the one with experience? I've seen so many of these coming form MS and Google's layoffs.

I've rarely seen new hires get paid better than tenured people, but every company does it a different way.

> Why would you fire the one with experience? I've seen so many of these coming form MS and Google's layoffs.

Good question. If performance is equal, and management is keeping the more expensive person, that may be a very serious management issue or even worse, discrimination.

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

#306

Post by willmadden »

petre wrote: post #232
willmadden wrote: post #223

Earlier quoted context omitted.

Bluntly, taking business advice from an academic who has never worked in the private sector is suicide. If you attempt to socialize losses and cut pay, your best employees leave for other opportunities while your worst performers stick around. That’s a recipe for disaster in a competitive market. When done surgically, laying off non-productive employees can improve the morale of the top performing employees, because…

You know that's bs, right? They took the cheap money, hired a bunch of people to do 'cool' stuff like VR and feed junk adtech directly to your brain, speech assistants to buy stuff that you don't need and self driving which failed to deliver on inflated promisses and when those things failed they're axing those projects along with the people who worked on them.

What is BS? I don't understand the context of your reply.

I agree that large tech companies invest in stupid/frivolous projects during bull markets and over-hire/acquire. They also tend to neglect their core products, focusing on extracting money from those with an established network effect instead of improving the services.

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

#307

Post by petre »

willmadden wrote: post #306
petre wrote: post #232

Earlier quoted context omitted.

You know that's bs, right? They took the cheap money, hired a bunch of people to do 'cool' stuff like VR and feed junk adtech directly to your brain, speech assistants to buy stuff that you don't need and self driving which failed to deliver on inflated promisses and when those things failed they're axing those projects along with the people who worked on them.

What is BS? I don't understand the context of your reply. I agree that large tech companies invest in stupid/frivolous projects during bull markets and over-hire/acquire. They also tend to neglect their core products, focusing on extracting money from those with an established network effect instead of improving the services.

> What is BS?

HR measuring employee productivity and surgically laying off non-productive empmployes, boosting the morale of top performers. /s

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

#308

Post by willmadden »

petre wrote: post #307
willmadden wrote: post #306

Earlier quoted context omitted.

What is BS? I don't understand the context of your reply. I agree that large tech companies invest in stupid/frivolous projects during bull markets and over-hire/acquire. They also tend to neglect their core products, focusing on extracting money from those with an established network effect instead of improving the services.

> What is BS? HR measuring employee productivity and surgically laying off non-productive empmployes, boosting the morale of top performers. /s

HR? It's not HR. It's competition. Unless your company is a monopoly or protected in some way by the government through regulation, if you do not do that, you go out of business. I can tell you aren't a startup founder.

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

#309

Post by di456 »

lamontcg wrote: post #178
di456 wrote: post #7

This misses the main driver. Valuations are no longer based on growth. The entire market has shifted to profitability over growth. Companies with a stronger balance sheet coming out of the recession will be better positioned for the long term. Seems that companies that gained their valuations through growth weren't sustainable in the long run. And at a macro level, economic policy has largely deferred recessions sinc…

> This misses the main driver. Valuations are no longer based on growth. The entire market has shifted to profitability over growth. Could have written this in 2001 or 2008 and it wasn't true then, and it probably isn't true now.

It's cyclical

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

#310

Post by ljm »

Gibbon1 wrote: post #257
ljm wrote: post #125

Earlier quoted context omitted.

It will also hurt you more if you’re on a lower salary. 10% on a 300k FAANG salary is a lot different to 10% on an 80k administrative job - you’re going to feel the pinch a lot more on 80k than you are on over a quarter of a million.

I'm reminded partial unemployment is a thing. Perhaps the law should be changed to reward companies for keeping workers on during downturns and ratfuck the ones that lay people off. Like slowly claw it back directly from the stockholders. As in Dunder Miffin's stock has a 12 cent a share clawback due to the previous layoff.

Legislate that workers have ownership in the company they work for and update the tax legislation so it’s not a punishment to receive a share in a company on employment.

The only reason we have options and RSUs at the minute is because you’ll get absolutely fucked by the tax man if you got shares - not a chance you’d be able to pay that tax if you didn’t already have assets and your salary was smaller than your compensation in terms of company ownership.

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