Comment by pityJuke 2 days ago
How infuriating for anyone recently hired caught in this trap.
It seems to me the obvious, from both a business & human perspective, is to stop hiring at first signs of trouble, before layoffs. To do so otherwise is cruel.
I doubt Matt had zero idea about this possibility two months ago.
>I'm of the mindset that any time a company does layoffs, they should start from the top And work down.
Oh, to be young and idealistic again! So in your world, the people running the business should fire themselves first?
It's been done.
Bob Mercer and Peter Brown laid themselves off from IBM when they were told to execute 10% across the board layoffs. They had argued their team was one of the highest performing teams in the company but were told that they had their quota. 10% of their team was 2 so they took the hit.
From there, they went on to run Renaissance.
IBM should have kept them.
> So in your world, the people running the business should fire themselves first?
If they are needed to continue leading, they should consider cutting their own salary until the problems are fixed. Let them take their entire compensation in just their equity for a time.
However we all know this won’t be the norm, and that’s OK. Not great, just OK.
Been there and done that. One startup I was at instituted a 50% pay cut for senior execs, 25% for the level below that and no cut below that. The CEO took a 100% pay cut.
This let us get through a short rough patch without layoffs.
I do know of one guy who took a pay cut because unless he hamstrung his own team badly he was looking at needing to lay off about 2.3 people and so he cut his own salary to make it 2 instead of 3.
That's one story surrounded by a hell of a lot of shitheel stories.
If they're running the business, and it's at a point where it needs layoffs; sounds like they're not doing their job properly, and should be replaced with people who can-- like every other position in the business.
Not that they will-- too much self-interest.
not the parent, but accountability is supposed to be assumed up the org chart while responsibility is delegated down.
so, yeah. the people ultimately accountable for fucking shit up should probably be held accountable first and foremost.
(this is why CEOs often resign in the wake of a scandal)
Imagine the organization you are imagining in your head.
Now imagine there is a Super-boss, who is exactly like the "people running the business" (attribution needed), but one level above them.
If the Super Boss were to look at the situation, I think it'd be pretty obvious that the issue would be "The people organizing the company at the highest level" who are responsible for the failures of the company. That may involve over-hiring, which is itself a bad practice that causes unnecessary pain and (personal, financial) suffering, and would be a good cause to fire them for almost crashing my beautiful super-company that I, the Super-boss, super-founded.
You're saying that if we return the Super-boss to the realm of the fictional, then suddenly it isn't the C-suite's fault anymore?
If we're discussing should, then yeah, their heads should be the first to roll. I agree its idealistic to imagine them having the sort of decency this requires, but I agree it should be the case!
If they have to fire people, they're running it poorly, so yes?
An honest question: why is this being downvoted? I thought that downvoting is meant to be used when someone is trolling or bringing the level of discussion down, not when you simply disagree with someone's point. I mean sure, it's stated a bit sarcastically, but my gosh if we're going to downvote every sarcastic comment, that would include a good portion of HN comments.
> I'm of the mindset that any time a company does layoffs, they should start from the top And work down.
I'm off the mindset that employment should be voluntary: both by the employer and the employee. It makes employers reluctant to hire if they know they can't get rid of people again.
(I'm a socialist at heart and think it'd be pretty nice for the government to take care of people who lost their jobs. Just tax the companies a little more!)
Those lacking empathy don’t know how to not be cruel. They keep filtering to the top unfortunately. Something that remains to be solved for.
There is nothing to solve - you are in the game of capitalism (the American Edition) and the job is to maximise shareholder value. They are paid big bucks because they only work for that without empathy/cruelty or such emotions. The only way to solve is to change the game but that's next to impossible because most powerful players like it that way and will turn on anyone trying to change their fattening ways.
The best part is that the pawns keep getting sacrificed and do nothing to change it; not only that, they refuse to support anyone trying to change the game to make their lives better. It's amazing.
The business world changes direction faster than companies can adapt. That was my biggest lesson as an entrepreneur: entrepreneurs don't really pivot into product-market fit, the market pivots into them. The reason capitalism works is because there's this huge sea of dream-chasers out there, most of whom will go bankrupt, so that when the market's needs change there is somebody out there to service them, and everybody who's not effectively servicing them goes to hell and gets another job.
Corporations and management basically exist to buffer this uncertainty. Employment is actually a really bad deal in good economic times; owners reap almost all the windfall of having a successful product. But in bad times, the company keeps paying you even if they're losing money, at least up until they don't. You get a raw deal, but not as raw a deal as the people paying you.
Likewise with strategic direction. The market's needs change faster than senior executives can adapt: if they always produced what the market was actually clamoring for, the company would run around like a chicken with its head cut off (this actually happens when the CEO panics, and a key CEO skill, and part of the reason they're paid so much, is the ability to ignore every piece of market data saying "You're not hot anymore. Nobody wants you, and the market has moved on" and keep doing what you're doing even though your intuition is telling you that you're doomed and going to lose your cushy $20M/year job). Much of the job of middle management is to buffer senior management's freakouts and tell the ICs "Keep calm and carry on; let's see if he still cares about this new hotness next week."
I've worked at a couple consultancies who played themselves by investing too heavily in one or two customers.
Once a single customer is 1/3 of your revenue they can start extracting considerations from you that may not be what your employees thought they signed up for. It's a good way to end up being a body shop. I don't have a philosophical problem with body shops per se, it's just that I don't want to work for one, so I pick places that should know better, but sometimes don't.
It can also be problematic if 2 customers account for 45% of your revenue and they both get the same idea, which can happen particularly when the market shifts. You have no way to call their bluff and move enough people to other projects to make it stick.
>The market's needs change faster than senior executives can adapt: if they always produced what the market was actually clamoring for, the company would run around like a chicken with its head cut off (this actually happens when the CEO panics, and a key CEO skill, and part of the reason they're paid so much, is the ability to ignore every piece of market data saying "You're not hot anymore. Nobody wants you, and the market has moved on" and keep doing what you're doing even though your intuition is telling you that you're doomed and going to lose your cushy $20M/year job)
You know what I absolutely hate about this take? It ignores my shared experience I've had with others (IE, its not just me). I've worked in this industry a long time. So I've inevitably worked for places that ran into financial trouble. In multiple of those cases, it could have been prevented if upper management actually listened to what those of us developing the product had to say about shifting customer behaviors and expectations, that what we were seeing was different from what they were trying to sell and have us develop. It always ended in disaster.
They refused to listen, but never paid the price for that failure, my colleagues did and in one instance, I was on the receiving end of a layoff along with others as well.
It's kinda their job to not listen. CEOs get bombarded with thousands of pieces of information each week. If they shifted the company direction each time, the company would get nothing wrong. In the immortal words of Ribbonfarm, "CEOs don't steer":
https://www.ribbonfarm.com/2017/11/09/ceos-dont-steer/
A good CEO will let in just the little bit of information that saves the company - this was Andy Grove's pivot to focus on microprocessors over memory chips, or Steve Jobs's turnaround of Apple. You didn't have a good CEO, and got your average mediocre CEO that sets a strategic direction and sticks with it regardless of what the market says.
I'm curious though, if you knew your employer was going under, why not jump ship to the competitor that actually did understand what customers wanted? Employees are economic agents too, and oftentimes competitors are more than happy to hire out of their competition.
>A good CEO will let in just the little bit of information that saves the company - this was Andy Grove's pivot to focus on microprocessors over memory chips, or Steve Jobs's turnaround of Apple. You didn't have a good CEO, and got your average mediocre CEO that sets a strategic direction and sticks with it regardless of what the market says.
Still too simplistic. Yeah, they need to filter information and say no to things constantly, I get that is a core skill. If something is repeatedly being brought up by members of your core teams, you should at least look at what they're saying and ask where they are coming from. That is simply good sense. There is a persistence factor in involved in each of these cases that are the source of the frustration.
If what constitutes a good CEO is allowing in the 'little bit of information that can save the company' (really thats a call about identifying useful information before anyone else), objectively most companies have terrible CEOs, and I question the value of the position entirely on that basis, especially at larger public companies.
FWIW, at each of these companies I worked at, the headcount was at most in the hundreds. I was only 2 clicks below the executives in the company tree, there wasn't a lot of barrier to interaction there, which is what I find even more baffling about the whole thing.
>I'm curious though, if you knew your employer was going under, why not jump ship to the competitor that actually did understand what customers wanted?
I did this twice. In the one instance I wasn't able to get moving faster than things were going down hill. Partially, this is a symptom of just how long interview cycles have become over the years. Took me longer than expected, but moreover, the company conducted the layoff faster than I really thought they would. I got the timing wrong by a little bit, it happens.
Its not like you identify an issue one time either, its the repeated ignoring of what happens despite repeated sustained efforts to raise the awareness where it needs to be.
That's a lot of words from someone who doesn't know what's been going on for ~6 months or so that is relevant.
Mullenweg lost his mind and attacked a competitor to Wordpress hosting (WP Engine) and kept doubling down and only served to demonstrate how much of an unhinged asshole he was.
Along the way he pissed off the Wordpress community - the worry was that if anyone else pissed him off (which could include he'd accuse them of using the Wordpress name or even "WP", even if it was descriptive (which is entirely permitted use of a trademarked name) and run up a bunch of legal expenses for them.
Angry-at-the-world blog post after blog post doubling down over and over. Taunting people as he banned them from the Wordpress slack, that sort of stuff. Then he blocked WP Engine from accessing the Wordpress.org plugin and theme registries which meant a huge number of sites couldn't update plugins or themes.
Then he announced Automattic was going to cut back engineering hours to (if I remember right) one full time staffer. One person to keep up with security updates and bugfixes of a very complicated piece of software used by a lot of organization.
Incredibly childish and thoroughly demonstrated to the world that he was unsuited for leading a company and being the sole person almost completely in charge of a piece of software used by a 20-30% of the websites in the world.
This was absolutely foreseeable, especially when he cut back Automattic's engineering to 40hr/week.
I advised a client a few weeks into the drama to at least keep in the back of their minds that they might have to migrate at some point as "the CEO of the company is off his rocker, they probably will start to struggle with security updates, and the company may go out of business."
The exuberance and self-assuredness that your plans are going to work out leads to overreach and I think the lag in accounting practices helps make that more acute.
I have had too many experiences where I thought my current employer was about to start circling the drain, and I've ended up some place that was circling faster. At a guess I'm about 50:50, which I suppose I should count as 'lucky' but has never felt that way.
Fish-tailing is a common flame-out mode for startups. VCs are partly to blame. They don't like to discourage you in case you come up with a miracle, but neither do they want to put good money and time after bad if it turns out you're going to be a break-even play or a loss.
The median position is to be hiring, just to backfill attrition. "Trouble" might be temporary; it might be noise. Hiring is always slow, with cycles longer than "trouble" might last.
We might argue about the parameters in this situation, but structurally there's a bias towards the low-pass average.
Its not even cruel. Its just dumb. Really dumb.
You are going to invest significant resources into hiring, onboarding, and injecting new staff into workflows for people that will not be there as soon as they are actually productive.
So its not just the cash burn - its the tieup of 3x team members to getting new people trained to become effective and successful contributor. Time is finite.
It makes no sense to throw away all that time spent by your team, who could have use that same time to get a few more features out, proposals sent , or projects spec'd instead.
This will continue until there are actual consequences for those responsible.
I'm of the mindset that any time a company does layoffs, they should start from the top And work down.