Patreon Lays off 17% of Staff • Hacker News Board

Re: Patreon Lays off 17% of Staff

#431

Post by Clobbersmith » Wed, Sep 14, 2022, 1:28 PM UTC

COGlory wrote: post #290

BryanBeshore wrote: post #42

Full post from Jack Conte's Instagram post: "Hi everyone - I have some sad news to share: today, Patreon is doing a layoff of about 80 employees, about 17% of our team. This was ultimately my decision, so I wanted you all to hear directly from me about the reasoning. Before I do, I want to say two things: first, today will be painful for many people, and I am deeply sorry to the incredible teammates who will be leavi…

>I take full responsibility for choosing that original path forward, and for the resulting changes today, which will be so difficult for our team. What does "take full responsibility" mean? Is he laying himself off instead of the employees? Is he paying the employees he's laying off out of his pocket? Is he resigning so this doesn't happen again? I'm confused how you can just say "I take full responsibility" without…

I always interpret it to mean "if you're going to hate anybody, hate me". It's deflecting blame away from his staff. "Full responsibility" is a bad term for sure.

Re: Patreon Lays off 17% of Staff

#432

Post by remram » Wed, Sep 14, 2022, 1:35 PM UTC

egypturnash wrote: post #385

remram wrote: post #369

Earlier quoted context omitted.

Spinning up a separate branch with slightly different branding is probably easier than a different organization setting up shop and re-implementing from scratch. From your post, you make it seem like OnlyFans cannot possibly exist. It does, and therefore Patreon could have built it.

I am pretty sure that the payment processors giving you the choice of banning horny stuff or getting the boot would not look kindly upon “a separate branch with different branding”. OnlyFans could exist, sure, but like every other horny service ever it had a built-in time limit. When Visa/MC/Apple/etc notice how much porn money you’re doing, then the axe falls. Maybe you continue without the porn. Maybe you fold up.…

I don't mean that they have to do it with the same payment processor... different branding AND processor, sorry, I thought that was clear.

As to why, Patreon was ALSO the organization most apt to sniff the size of that market. Those were their current customers! If OnlyFans managed to glimpse to potential revenue and build their platform, Patreon would have been aware.

They had the platform, they had a known brand, they had relations with some of the clients, they knew how many people they were kicking out. This was such a huge advantage over anybody else.

Re: Patreon Lays off 17% of Staff

#433

Post by PopAlongKid » Wed, Sep 14, 2022, 3:13 PM UTC

peter422 wrote: post #403

PopAlongKid wrote: post #230

Earlier quoted context omitted.

> what they did here with the equity, especially the option exercise period, is a nice touch. But it's not all that great. Patreon is not publicly traded, so it seems likely that exercising any options will require cash up front, plus it will immediately trigger taxable compensation (income tax plus FICA). And how will the FMV be determined, if there is no public market trading? (ans.: usually just some number voted…

FMV is determined by a 409a valuation, it’s an imprecise thing but it’s done frequently even for private companies and all employees will know the FMV of the shares. Not just a made up number by the board. They are likely NSOs and with an extended exercise period the former employees do not need to exercise them. They can just hold them and if within 7 years there is a liquidity event, they can exercise & sell. The t…

I was neither complaining (previous reply) nor being critical. I was just saying that at best extending the exercise window was pretty neutral, not some nice benefit funded by the company like extra severance pay or extended health insurance. Most of the comments seemed to be vastly over-valuing this particular aspect of the layoffs.

And if Patreon is acquired some day rather than going public, the employee shares are probably going to be last in line after all the VC money (preferred share classes), and maybe not worth anything. I went through this when I worked for a dot-com startup in the early aughts. Even if they do go public, there will probably be lock-up periods to restrict the immediate selling of shares, and then you are at the mercy of the stock market, where the value of the company (which you long ago stopped having any input to) could well put your shares into loss territory.

Re: Patreon Lays off 17% of Staff

#434

Post by kevstev » Wed, Sep 14, 2022, 3:29 PM UTC

oldgradstudent wrote: post #264

kevstev wrote: post #82

Earlier quoted context omitted.

You absolutely can. Stock price is really meaningless as far as the day to day life of a company is concerned- if your cash flows haven't changed, and the market has just decided to shit on you for a bit for irrational reasons there are no consequences other than maybe looking into whether a buyback makes sense. Equity markets are often irrational and wrong. IE Covid- essentially every stock was down significantly in…

> Stock price is really meaningless as far as the day to day life of a company is concerned Not when significant part of your employee compensation is equity-based.

The market is going to do what it is going to do, I am not sure if you mean that from an employee based perspective or from a corporate perspective, but either should not matter- I guess with a big disclaimer that I am assuming that your core business is still doing well, but its just the "market" that has decided you are out of favor.

From a corporate perspective, you are buying a fixed dollar amount of shares to compensate your employees- I haven't heard of a fixed number of shares being offered as compensation in years for pubic companies. This does not affect your cashflow, just the number of shares being purchased in the open market.

From an employee perspective, its definitely not fun to see the value of your grants drop by 50%. It should only really affect your decision to leave or not if you feel the drop is permanent, or just a temporary blip. IE if I was hired at Peloton in 2020, the stock has dropped 95% and while it will likely bounce back a decent amount, the equity part of your compensation is essentially worthless and not going to be a golden handcuff that will keep you around. Google/Alphabet, its down about 30% but thats likely just an overreaction and is to some extent welcome as you get more shares in your grant... it wouldn't stress me out at all- maybe if I was looking to cash out and buy a house right now, but this was a risk that was always there.

Re: Patreon Lays off 17% of Staff

#435

Post by rchaud » Wed, Sep 14, 2022, 3:33 PM UTC

cbozeman wrote: post #285

rchaud wrote: post #186

Earlier quoted context omitted.

Forget about CEO, could you even be a competent manager if that's how you think?

I hate to be the one to break this to you, but this is how an extraordinarily large amount of high-level individuals think - they just won't admit it. If you're able to automate a large portion of your workforce, why wouldn't you? You'll be rewarded for it in every aspect. You'll be praised by the Board of Directors for cutting costs and improving productivity (since algorithms and robots don't have to sleep, never g…

Thanks for 'breaking it to me', I had no idea /s

Have you considered that part of the fabric of civilized society is...being civil with the people that you interact with, and require cooperation from?

You can hold any opinion of them that you like, but the difference between a competent manager and an incompetent one is how they can translate their personal disdain for their direct reports, in a way that doesn't treat them like cogs, and improves their performance on the things they're responsible for.

Re: Patreon Lays off 17% of Staff

#436

Post by peter422 » Wed, Sep 14, 2022, 3:34 PM UTC

PopAlongKid wrote: post #433

peter422 wrote: post #403

Earlier quoted context omitted.

FMV is determined by a 409a valuation, it’s an imprecise thing but it’s done frequently even for private companies and all employees will know the FMV of the shares. Not just a made up number by the board. They are likely NSOs and with an extended exercise period the former employees do not need to exercise them. They can just hold them and if within 7 years there is a liquidity event, they can exercise & sell. The t…

I was neither complaining (previous reply) nor being critical. I was just saying that at best extending the exercise window was pretty neutral, not some nice benefit funded by the company like extra severance pay or extended health insurance. Most of the comments seemed to be vastly over-valuing this particular aspect of the layoffs. And if Patreon is acquired some day rather than going public, the employee shares ar…

The shares can’t lose money (in theory) because with the extended exercise period you can simply not exercise them if they are underwater.

It's not a unique benefit, many companies offer the extended exercise window, but it is very good for employees because otherwise they have 90 days to exercise or abandon the options.

In your mind you are imagining somebody with a few options that are barely in the money. What if somebody who got laid off has worked there for 5 years and is sitting on super valuable options. With no extended window they'd be in a huge pickle where they'd either have to abandon all their options or pay a huge exercise/tax bill right now. But with the extended window they don't.

Neither of us can predict the future of patreons valuation so you shouldn't assume things are going to go badly and thus this benefit will not matter. The whole point of stock options is the option part of it. Maybe it will be worth a lot, maybe it won't, but you'd like to wait and find out and shouldn't have to give that up because you were laid off.

Re: Patreon Lays off 17% of Staff

#437

Post by jeremymcanally » Wed, Sep 14, 2022, 3:43 PM UTC

bArray wrote: post #428

jeremymcanally wrote: post #386

Earlier quoted context omitted.

I have no idea how their team was composed previously, but it could be that they had a lot of folks who were analysts but weren't contributing much to remediating issues. It sounds like (and I have no idea again) that they're hiring a small number of security engineers (maybe even one) to not only actively look for security issues, but to also actively work to remediate them and improve code security posture as well.…

> but it could be that they had a lot of folks who were analysts but weren't contributing much to remediating issues. Neither feature testers (does it behave as expected) or security testers (is it secure as it does it) are expected to write fixes. Writing fixes needs to be planned in the sprint and is better worked on by an expert on that system. > they're hiring a small number of security engineers (maybe even one)…

> Neither feature testers (does it behave as expected) or security testers (is it secure as it does it) are expected to write fixes. Writing fixes needs to be planned in the sprint and is better worked on by an expert on that system.

...on teams that are structured that way. That is far from a universal thing.

But, yes, I'm with you that it could be just cost cutting or something weird with the team pushing back on some things. As I said, I have no idea, but there are universes where it makes sense to make those changes.

Re: Patreon Lays off 17% of Staff

#438

Post by PopAlongKid » Wed, Sep 14, 2022, 3:54 PM UTC

peter422 wrote: post #436

PopAlongKid wrote: post #433

Earlier quoted context omitted.

I was neither complaining (previous reply) nor being critical. I was just saying that at best extending the exercise window was pretty neutral, not some nice benefit funded by the company like extra severance pay or extended health insurance. Most of the comments seemed to be vastly over-valuing this particular aspect of the layoffs. And if Patreon is acquired some day rather than going public, the employee shares ar…

The shares can’t lose money (in theory) because with the extended exercise period you can simply not exercise them if they are underwater. It's not a unique benefit, many companies offer the extended exercise window, but it is very good for employees because otherwise they have 90 days to exercise or abandon the options. In your mind you are imagining somebody with a few options that are barely in the money. What if…

>The shares can’t lose money (in theory) because with the extended exercise period you can simply not exercise them if they are underwater.

Incorrect. Yes, one would not exercise options that are already underwater, but once you own the shares and there is a post-IPO lockup period[0] you most definitely can lose money on the shares, money on which you already were taxed at ordinary tax plus FICA rates. Try looking at the volatility of company share prices in the period immediately after their IPO.

>you really have not even a basic understanding of how this works?

You also have not addressed the strong possibility of being acquired rather than going public. (Ex-)employees do not make any money until after all the VC people do, and there may not be much left.

Again, I never said this was a bad thing, more like a "meh" thing.

[0]https://www.investopedia.com/ask/answer/12/ipo-lockup-period...

Re: Patreon Lays off 17% of Staff

#439

Post by MisterBastahrd » Wed, Sep 14, 2022, 4:09 PM UTC

ROTMetro wrote: post #370

MisterBastahrd wrote: post #86

Earlier quoted context omitted.

Mid-November through December is a hiring no-man's land due to the accumulation of end-of-year vacations and family trips. Most of these employees have about a month and a half before the shutdown begins and they are stuck scrambling to try to find work in the new year.

Not sure why you are downvoted for speaking truth. I know as a manager I rarely brought on new hires during this period if I had a choice.

Dogpiling is dogpiling. Luddites are luddites. Who am I, a person with real tech agency recruiting experience who could view the actual live job boards year after year during this period, to possibly to speak out about what actually happens when we've got people who have anecdotal experience? Every year we would reach that point and suddenly pull many jobs from the board until after the new year, but I guess it was just my imagination because someone over there got a new job in November once.

I didn't even say it was impossible. I just think it's unrealistic to expect to find something after Nov 15th and until the New Year. Sorry for knowing what I'm talking about, I guess.

Also, I think it's quaint that people assume that when labor reductions happen at tech companies, that only tech employees are affected. Somewhere there's an admin assistant who has been working at that glorified CMS, and I doubt they have the same job prospects as a software architect.

Re: Patreon Lays off 17% of Staff

#440

Post by peter422 » Wed, Sep 14, 2022, 4:24 PM UTC

PopAlongKid wrote: post #438

peter422 wrote: post #436

Earlier quoted context omitted.

The shares can’t lose money (in theory) because with the extended exercise period you can simply not exercise them if they are underwater. It's not a unique benefit, many companies offer the extended exercise window, but it is very good for employees because otherwise they have 90 days to exercise or abandon the options. In your mind you are imagining somebody with a few options that are barely in the money. What if…

>The shares can’t lose money (in theory) because with the extended exercise period you can simply not exercise them if they are underwater. Incorrect. Yes, one would not exercise options that are already underwater, but once you own the shares and there is a post-IPO lockup period[0] you most definitely can lose money on the shares, money on which you already were taxed at ordinary tax plus FICA rates. Try looking at…

Exercise and sell is an instant prices. If you choose to exercise and hold obviously you now have the volatility of owning the stock, I'm not talking about that.

Yes preferred share classes exist, this is irrelevant to whether or not the options have option value! I'm not guaranteeing that Patreon stock will be worth a lot of money, only that it might be worth a lot of money.