You're missing the point - the point is to send a message, to employees and to the investors. That they're SERIOUS COMPANY that does the right thing. Follows the market. Listens to economy. That won't hear complaints from the entitled lazy overpampered engineering workers. That they need to get back to the factory and be like all other quiet labor. That HARD DECISIONS can be made without regret when bankers ask for them.
Exactly- Facebook laid off 7% of their staff and then followed it up with a $40 billion stock buy back. That's over $3,600,000 per laid off employee. The economy isn't the issue here, the companies know that since layoffs in mass are happening they can get away with it without taking the same reputational hit as if they did this on their own.
The stock buy-back really exposes the game though... for $20bn they could retained their employees for another <5 years and just waited for the economic climate to change a bit... it's unlikely to take more than 18mo.
Whilst there's good arguments to be made about workforce planning during recessions, and how you need to not have "slack employees" doing nothing... there are similar arguments to be made about stock buy-backs (ie., that having 40bn in reserves is a massive economic cushion).
That they choose to weaken their cash position for the sake of a temporary boost to stock prices shows that their incentives arent well-aligned to most stakeholders in this.
Sort of yes, but also no. He pays his employees with that stock, and it being higher makes that a better deal. Additionally, being valued as a growth company is much better than being a value stock.
Mind you, Im not interested in buybacks but if they paid a dividend I'd hold them till they lose their advertising business.
>"Additionally, being valued as a growth company is much better than being a value stock"
Could you elaborate, how does the buyback help them to be valued as a growth company? Also doesn't the fact that he paid for the buyback with employee layoffs really damage FB as a prospective employer when FB at some point in the future again needs to hire? What was the logic here?
> how does the buyback help them to be valued as a growth company
Buybacks are what growth companies do, dividends are what value companys do (for whatever reason). But more generally, FB needed to show profit growth to go back up in value, and the easiest way to do that is lay off a bunch of people.
> Also doesn't the fact that he paid for the buyback with employee layoffs really damage FB as a prospective employer when FB at some point in the future again needs to hire? What was the logic here?
Maybe it does. But if they offer shedloads of money, I can't see people worrying about. For context, FB performance reviews are hardcore, so it's not like people were resting and vesting there. I dunno what his real logic was (I left in 2018), but the above seems reasonable, to me, at least.
Attrition tends to happen with the most qualified individuals leaving for other companies.
Attrition is not targeted or evenly distributed (depending on the goals). This can result in what would later be perceived as being lopsided compared to the layoff cut. For example (and purely made up), if part of the layoff was to cut back on marketing of the self hosted instances, then you would be looking to lay off marketing, and developer evangelists. However, if attrition doesn't hit those roles (because who's going to be leaving in this economy), you can have it take much longer to scale back that headcount. Saying to the developer evangelist "ok, we don't have something for you to do, we're going to switch you back to an entry level developer position with this other set of roles and responsibilities with a corresponding pay cut" isn't something that can be done easily.
If you target specific people, even if they do garbage work, somebody somewhere will find something to sue you over. If you do a less targeted layoff, you'll hit some of that target group anyway, and some will leave over their own volition after. Yeah you'll lose some good people but the whole point of this charade is that in management's eyes the engineers and knowledge workers are cogs in a machine, so collateral damage is okay and it'll all come out in the wash over the next few years with new hires.
I think there are several reasons to do it this way:
- Effective number will be higher because some employees will be disgruntled because of the layoff event and will leave on their own. It's usually estimated that the effective number is twice as high
- By doing a layoff you can quickly get rid of people who are overpaid. The attrition would take much longer. And with the regular performance review process you can only get rid of under-performers
- With a layoff you can get rid of entire teams, wouldn't happen normally
- Finally, and probably most importantly, shareholders expect a layoff, especially if other companies had already done it. Cargo cult CEO thinking. You could see the stock price rising for some of the previous companies announcing layoffs
Can attest to this. I worked at an open source consultancy for a while. During a tough period, and having made some bad bets (trying to get into the enterprise Java world), they did some downsizing - or actually, it was more like warning that there would be downsizing. A lot of people quit, not even waiting to get a severance package. Including many people they definitively weren't happy to lose.
- Why is this beneficial? The disgruntled will be the high performers. In no shape or form is this beneficial for culture.
- Assuming you mean average performers who are paid well, ie. well tenured? Considering these types harness significant domain knowledge it would be a strategic mistake to let them go in any meaningful number. The focus on smaller cuts tends to be low performers or recent hires.
- The only time this is beneficial is when there is indeed 1) a financial dire straights situation or 2) a significant change of course (ala Google) and blood letting has to be rapid, otherwise you're letting go of top performers in the process. It would be much cheaper to reassign to other teams given the cost to source/acquire and onboard top talent.
- Bingo. This is the primary reason almost always.
1. I actually also think it's not beneficial. However, company leaders must realise of this side-effect yet it doesn't stop them from lay-offs. I just wanted to point out a difference vs regular attrition, since this was the question asked by OP.
2. I could also be people hired recently, it is often the case that they're paid more than their peers on the same level.
3. Maybe re-assigning people from a dismantled team doesn't make sense because these people will be upset about their former team being dissolved and thus spread the negative energy to other teams?
As someone who was recently laid off at one of these % cuts at another company, these cuts target specific groups, for instance people who have higher salaries. Well paid people won't just quit.
I’ve seen this happen over the years and I’m always curious why there isn’t a discussion beforehand that offers the “overearners” a chance to stay at a reduced salary. I’ve asked people who were in those positions, and they’ve often indicated that they would have stayed at a lower salary, at least for a while.
You lay off hard to instill fear and legally-depress everyone's wages, but you give good severance so that when you inevitably want to hire people in the next two months (as GitLab is likely to do), they're aren't too terrified to accept your offer because of all the layoffs you just did. 7% of staff as "layoffs" comes out to about 150-ish? people, but they are also currently hiring for over 100 open job position at GitLab on job boards right now. GitLab is also up 74% year-over-year in quarterly revenue, and had their highest sales quarter ever just four months ago, according to their own PR department (https://ir.gitlab.com/news-releases/news-release-details/git...)
It's a pretty transparent process, frankly. Lots of companies are doing 'fake layoffs' (layoffs they don't need, done solely to appease the executive class, who strongly desire a recession), but unfortunately for them, the truth is that the economy isn't anywhere close to a recession, so they simultaneously have to keep hiring open, to keep labor incoming, to keep up with all the new business growth or increased sales they're experiencing right now.
None of what you have said is evidence that the intention is to "instill fear".
Also, I am not sure how confidently you can assess the health of Gitlab. Those open positions my not actually be "open". While their revenue was up four months ago, much has changed since then. Their next quarter might be down and they are adjusting now.
> isn't anywhere close to a recession
No one knows where the economy is headed.
> It's a pretty transparent process, frankly.
Except that it is not. Perhaps you are correct, but you really have no evidence their decisions were to maliciously "instill fear". It is equally plausible that they are doing what they think is best for the company and the remaining employees.
Scare probably in the sense that performance goes up and some people will quit additionally. So the 7% becomes 10-15% by itself, without them having to pay a severance package.
For the 7% you have to look like you care, since you will be hiring in the future and probably with lower salaries. Mass layoffs are a good way to lower wages throughout the industry.
Don't drive class division. Even the highest paid engineer is closer to being homeless than being any of the people deciding these layoffs. If the primary economic force you have is the sale of your labor, you are labor, and need to act like it.
Our "high" salaries could quickly evaporate if we're not paying attention while the owners of capital are taking advantage of excuses to wage class warfare.
Engineers are still not proles lol. And they will never be, so it's always funny to hear a bunch of highly paid SWE talk like they are class conscious workers. In reality, most are thoroughly professional managerial class, with 0 connection to anything close to labor.
It's even funnier when that discourse seem to mostly happen when firings happen, as if losing your highly-paid cushy job makes you a proletaire.
I mean, it does instill some fear though. Knowing that a lot of companies are going around laying off 5-10% of their folks means I'm a lot less confident I can get a new job if I'm laid off or quit my job. Which means I'm going to keep my head down and do my work and not rock the boat at my current job as much.
Yes, I'm paid well, and yes I have more of a cushion to land on if I got laid off, but I know folks who got laid off last year who haven't been able to get a new job for months. I don't have 6 months of all of my living expenses just laying around in a bank account, and even if I did, that pretty much wipes out my savings.
"Other people are doing worse than you" doesn't mean there aren't rational fears. Making an engineer's salary doesn't set you up for life within a few years.
Workers are workers. Even the most highly paid workers have more in common with the homeless than they do with capitalist class. Get laid off, maybe have a large medical bill, and then any worker could find themself desparate for just a roof over their head. So yeah, it sucks when these huge layoffs are happening, it sucks lot. The best thing that could come from this is for tech workers to realize how precarious their lives are and start standing in solidarity with other tech workers and workers generally. Don't try to drive a wedge between tech workers and other workers.
The working class and employing class have nothing in common.
Franky I'd say this sort of attitude is much more corrosive – the idea that people who feel they are being treated unfairly or poorly should roll over and accept it merely because other people are being treated more unfairly or poorly.
I don’t really agree with the idea that there is an underlying wish to “instil fear” or whatever. I agree even less with the attitude that we should all shut up and be happy so long as someone else is worse off.
The difference is the people on r/antiwork by and large have menial jobs, and/or are students in that very predictable/boring pseudo-socialist phase of their life. People on HN are making like $200k/yr typing JavaScript into a computer.
That's not necessarily true. I've never made remotely close to that as I've always worked on open source projects. Right now I could really use one of those 200k/year jobs but it looks like they're disappearing. So what's next?
It's just the first cut (for all companies). You can't do 50% right away as you don't know what will happen, so you need to do in steps. If they were just 7% over hired then they could just do attrition + a bit tougher perf reviews, or close a few teams over the course of a year but there is high chance for all companies they are not 10% or 7% or 15% over hired but 50%
The fun thing is that their R&D cost is dwarfed by expenses on Sales&Marketing and General&Administrative. So, if I understand their financial statements for 2022FY correctly, a 7% cut on R&D could lower their total expenses by 2% at best https://ir.gitlab.com/news-releases/news-release-details/git...
Even cutting their R&D 100% would not make GitLab profitable, if other expenses are kept the same, so economics is clearly not the reason for layoffs.
Yeah, I can't be sure. However, the "tech" part of the layoff most likely falls under the R&D expenses, which are relatively small compared to their overall costs. So I don't see, how cutting any number of core development workforce would make a significant difference. At least in the financial sense.
From a cost basis, this could possibly be true. But, with that type of attrition, you would probably see a greater percentage of high-performers go because they have good options. Then, you not only have lower producing staff, but it also becomes more difficult to hire top level talent back, because they want to work with other folks like themselves.
Isn't that attrition going to happen anyway? And with mass layoffs, wouldn't top talent, with plenty of options, be wary of a company who is likely to layoff 7% of its staff to please stockholder share pricing? I don't know the answer to top talent retention, but it seems easier and less expensive to turn your existing staff into "top talent" under the tutelage of the existing top talent and implement a hiring freeze with no huge news cycle.
Our banking corporation did that some... 7? years ago. Instead of random firing rounds happening locally and globally few times per year, where even locally best people were sometimes let go ie due to current under-allocation, and everybody would be nervous for months afterwards... just nothing.
Helped morale tremendously. Don't treat your employees like numbers, it will bite you back eventually, in all aspects including finances. Even most cold-hearted sociopaths on the top should grok that.
Threema is proven. The ome-time licence fee of EUR 5 are probably very well spent on it. At least on Android, you can skip Google App store and buy a licence directly with threema. And even bitcoin is supported for this.
This is yet another attempt to put something together on top of Openstack and sell it as an alternative to the big three cloud providers. As a German, it always annoys me when crap like this is presented as "made in Germany". No sign-up process, no IaC first approach, documentation is a joke.
No,thanks.
Current status sounds like Wild West. It's probably because you don't have any people who know about infrastructure on board, yet.
I'd challenge the idea of dedicated infrastructure per developer in the first place. There's little reason why this could not be done locally on a developer machine using Vagrant, local Kubernetes, Docker Compose, whatever.
Thank you very much for building this, I benefit from it every day!
Since you're here... there was actually a question raised on the SQLite forum about that code and whether it is genuinely safe against a specific race condition... and I don't have nearly enough Python C knowledge to know the answer!
