Don't discount the massive increase in the number of employees. The more people you add, the more the culture dilutes. It becomes impossible for employees to feel like they're part of single a tribe with a clear goal. Factions develop, tensions mount, and you get angry employees leaking confidential information constantly. Most of the negative press the public has heard about Google in the past year is a direct resul…
I used to work a corporate job in an investment bank with around 30k employees. The majority of those employees were politicking chameleons with little productive output and a disproportionate salary. I used to hope that large innovative tech companies were different. From what I hear on HN it's becoming clear that that's not the case. It's almost as if the "largeness" of a company allows the non productive people to…
For example, a company with 5,000 employees might have about 500 positions that could actually be eliminated via automation, improved processes, and removing net negative contributors. If the average fully loaded cost is $100k/year (many old companies still have people not comped as high as Silicon Valley folks), you’re looking at roughly $50 million in dollar savings, not to mention the top performers aren’t distracted by the under-performers.
If I’m at the C-level, it’d be completely reasonable to pitch making this move, pocket an extra $500k for myself, and give $5 million worth of bonuses to the remaining 4,500 people ($1k minimum each), and you’ve still saved roughly $45 million to the company’s bottom line for savings or growth investment or higher comp for top performers. These are all rough numbers, but you get the point.
I suspect companies don’t do this more often because 1) they have a hard time, from the upper management vantage point, knowing where to cut/identifying the poor performers who try to hide, 2) scared to accidentally cut someone actually important, and 3) like managing a “big” company, even at the expense of their own potential executive comp.