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Buffer Layoffs

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Re: Buffer Layoffs

#421

Post by slgeorge »

eloisant wrote: post #367
Bombthecat wrote: post #307

Earlier quoted context omitted.

As a company, why should you care about keeping low performers? Just hire new ones.

For many reasons: * Because performance vary with time (personal issues, motivation, etc.) so today's low performer may be tomorrow high performer * Because your metrics might not be good enough to actually discriminate low performers from high performers * Because such a policy encourages rivalry between employees instead of cooperation (not in the benefit of the company) And probably other reasons. So I have no pro…

> * Because your metrics might not be good enough to actually discriminate low performers from high performers

I think this is very true. For many complex roles you land-up with all sorts of indirection to create 'metrics' which are often some input with a lot of opinion. I've seen lots of situations where you look through performance review data to see employee ratings bouncing all over the place as they (or whole teams) shift from manager to manager. That's not to imply that managers are negligent, it's just that in many roles it's perfectly possible to have a different view of performance (and everything else).

> * Because such a policy encourages rivalry between employees instead of cooperation (not in the benefit of the company)

See stack ranking!

The other issue is that an organisation can develop a reputation for being too fast to pull the trigger which can impact retaining talent and hiring new people. Given that metrics aren't clear, every 'low performer' situation involves friends and colleagues who don't think that the individual was a low performer. Plus the person leaving is unlikely to be positive about the organisation whatever the compensation is.

That may be fine from a management philosophy perspective, some people think it's good as "only poor or average performers will worry".

Re: Buffer Layoffs

#422

Post by slgeorge »

alexbrower wrote: post #275

"Although I know rationally that the size of the team is not something to celebrate, I feel that I slipped into that harmful mindset quite a bit over the last year. Not everyone is familiar with growth metrics like monthly recurring revenue, but team size is easy to understand. Sometimes it impressed people when I told them how big the company was, and I was proud to share it." Correct. Headcount is a figure that rep…

- Stop publicly promising salary increases altogether. Promote people based on their ability, not an artificial loyalty policy. Some people deserve 10%+ raises, some you'll find are overpaid. Use a basic job ladder and put the burden on managers to justify comp changes.

A guarantee of annual salary increases is problematic for three reasons:

a. An increase of 3-5% is going to increase salary costs rapidly as it compounds. He mentions that salary is 80% of cost, so it means that costs are going up for doing the _same thing_ by 3-5% every year. Employees aren't a fixed unit of production (particularly in a tech firm) but there's not unlimited new productivity either. It's fine if your prices are also growing at those rates ... but I don't think many people are in those situations at the moment.

b. It takes away the meritocracy Salaries have to keep up with inflation, but beyond should be a mark of performance.

c. It's going to suck when they have to change it Things happen, this is an example, and employee morale is a sensitive matter.

Re: Buffer Layoffs

#423

Post by tssva »

sulam wrote: post #357

Two things jumped out at me. 1) They planned to spend 1/3 of their remaining cash on flying people around the world to meet f2f. Whoah! They need a CFO with some real power, because that is absurd. 2) Speaking of needing a CFO, one of the first things a CFO will probably point out to them is that their cash target is off by 100%. They're targeting hitting 50% of today's ARR sometime next year, yet they plan to grow A…

A couple of months ago they published a blog post which received coverage on HN talking about how they saved 120k by performing an audit of their infrastructure and killing unused AWS instances. It was obvious from the post that they were in the situation because there were no controls in place. And it didn't sound like they planned to implement any real controls going forward to prevent ending up there again.

Re: Buffer Layoffs

#424

Post by CodeWriter23 »

baby wrote: post #149
CodeWriter23 wrote: post #91

Earlier quoted context omitted.

I think it would have been a better decision to lay off 3-4 more people and let the remaining employees keep their perks and annual salary increase. 3% doesn't keep up with inflation. Maybe make that 4-5 people and create an incentive fund for those who kick some ass and help the company fight its way back from its mistakes.

That might have been the plan to profit from that announcement to get rid of the perks. In the long run, if your company keeps growing in size, the perks might hurt.

I have a feeling their blog post in a year from now is going to be about how Buffer worked its way through a bunch of employee churn and training new hires, and how growth suffered. I think the outcome from some extra layoffs and foregoing the pay cut would be a post about how employees enjoyed high morale and rallied Buffer back into growth. And how sacrifices by the founders while maintaining pay and benefits through a tough time generated high employee loyalty.

Re: Buffer Layoffs

#425

Post by joeevans1000 »

Holy smokes... they put all new hires through a 45 day trial, then only keep 7 out of 10! I can't imagine getting the boot after a month and a half... by then you'd have made emotional connections. I guess it would work for those who are contractors thinking about getting a full time gig, but for those leaving other positions... wow.

Re: Buffer Layoffs

#426

Post by robbiemitchell »

arctor wrote: post #348
Arcsech wrote: post #68

Earlier quoted context omitted.

Let's do some simple estimation! I haven't really looked at their spreadsheet, so this is just guesswork. The product is fairly simple technologically yes, but the value is provided by making it easy to use so the customer saves time (= money). To do that you need a few UX people plus some developers (especially with web and mobile apps), call that 15 engineers/designers total, plus another 5 for ops. Now you need a…

>Now that we're up to 55 people, we need another 10 people worth of HR 1 HR person per 5.5 employees? This is insanely high. A company that size need 2-3, tops.

You need more in HR (or more accurately, HR/finance) if you have lots of remote employees, especially international. That's a ton of extra administration to deal with.

Re: Buffer Layoffs

#427

Post by iofj »

jes wrote: post #173
terrywilcox wrote: post #133

Earlier quoted context omitted.

No sarcasm at all. Child abandonment is clearly bad for the child and can see the parent thrown in jail. Adoption is the better choice for both parties. I think you perhaps missed the broader point though. If you're raising children as servants to take care of you when you're old, then yes, self-interest is a good reason to keep them around. They will also likely act in their own self-interest and ditch you. Otherwis…

You and I seem to be having a good conversation. Thank you for that. I don't think raising my children to take care of me when I'm old (should be any day now) would be acting in my self-interest. In fact, I think it would be acting against my self-interest. A better model, I think, is for me to do all that I can to be self-sufficient, and not predatory in nature, in terms of expecting other people to care for me. As…

With interest rates at 0.25% and the Fed talking about doubting whether they should go down or up, I hope you're not thinking that a pension fund will take care of you when you're old. That won't happen. With interest rates under inflation, you are in fact losing spending power (that is of course the point of the policy: incentivize people to spend now, not save to accelerate the economy). Pension funds are failing because of Fed policy [1], and the current elderly are plundering them dry for the same reason you defend children. They have a right to a pension [2]. Given that stocks have now also refused to go up further (since January SP500 has only gone down. Granted, they came back up to about 2100, but there is negative return so far for the year. How negative varies quite a bit from day to day, but may God help retirees if they drop from here and stay down).

The model where Children take care of elderly is coming back, unless the Fed and the ECB stop acting like we're in the midst of a deep recession.

> Children are not born to be servants to their parents, as you observe. That's why I think it's incumbent on parents to treat their children as best as they possibly can, since children come into a family without being able to consent,

And if the alternative is to starve to death a year or two after you no longer have the ability to work ? What if the alternative is merely to live in poverty when you stop working ? Do people have the right to not live in complete poverty ? I'd say yes. What if there is no choice but to "use" children to accomplish that, like we did for 90%+ of history ?

That second one seems to be happening to plenty of elderly today, and they had far, far better circumstances to avoid it than you or I do today.

I'm not even saying that this is moral, or that it is what you have to do. I'm saying it's what's going to happen if present circumstances remain.

[1] https://next.ft.com/content/c9966bea-fcd8-11e5-b5f5-070dca6d...

[2] http://money.cnn.com/2016/05/20/retirement/central-states-pe... http://www.pionline.com/article/20160502/PRINT/305029995/kro...

Re: Buffer Layoffs

#428

Post by pascalxus »

jwebb99 wrote: post #407
pascalxus wrote: post #401

It sounds like they handled this layoff both compassionately and professionally, although the founders have a lot to learn about balancing their spending. But still, every company and employee needs to recognize that your coworkers and company are not your family - this only leads to misplaced expectations. One of things that makes America so competitive, is the concept of at will employment - the company can fire or…

> Ideally work should not account for more than 10 to 20 hours of your life per week. Is this an opinion or is there some kind of rationale behind this? I don't mean to sound antagonistic, I'm just genuinely asking a question.

It's just an opinion. 20 hours (25% of the discretionary week, discretionary time is roughly 50% of 168 hours ~ 84 hours.) for me represents the maximum amount of time that could be considered sufficiently diversified.

Re: Buffer Layoffs

#429

Post by rco8786 »

blablablame wrote: post #417
rco8786 wrote: post #399

Earlier quoted context omitted.

Because it's apples to oranges. You take a larger chunk of illiquid stocks/options at a private company in exchange for the risk that it won't go public one day. That's an active tradeoff people are making whether they know it or not, so you can't compare salaries at a private company and illiquid equity to salaries + liquid equity at a public company.

So if I enter a casino with 100 bucks set on betting on number 23, it means I actually own 1000 bucks? (or whatever that gives you?) Giving stock on a public company you can sell the moment that vests is valuable. Owning stock on a private company that you can't sell, can't probably cash in unless they IPO, etc is not.

Yes that is the description of an illiquid potential future asset and a liquid current asset. both things that were addressed in my above comment.
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