Tell HN: Confluent laying off 8% of staff
It hasn't been posted publicly but staff recieved an email from the CEO this morning announcing that 8% of staff have been cut in a "restructuring". This is especially surprising because staff have repeatedly been told that the company has strong cash reserves and is on a trajectory to profitability, even with market headwinds. No word on the breakdown by department or role.
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I really get the feeling that many companies are just blindly doing whatever other companies do. One starts large layoffs, and suddenly everybody is doing it. At other times, when one goes on a hiring spree, they all go. One tries to reduce salaries, they all do. One pays enormous bonuses, and they all do. It's like CEOs aren't really thinking for themselves, just copying whatever the market does.
The CEO answers to the board, and the board is usually of the type to at least ask the question "Everyone is jumping off a bridge, why aren't we?"
And sadly the easiest answer is "we ARE jumping off the bridge, see?"
And sadly the easiest answer is "we ARE jumping off the bridge, see?"
Interesting that everyone is so certain that we're jumping off a bridge now with layoffs, instead of that we jumped off a bridge before with the hiring spree based on Covid-stimulus.
I don't think that a covid-related hiring spree should have affected a company like Confluent. Yeah there were probably many product companies that got more money due to Covid that wanted a managed Kafka solution, but Covid also took down other kind of companies who might have been Confluent's customers.
I think it has more to do with cheap money not being cheap anymore.
I think it has more to do with cheap money not being cheap anymore.
Money was never cheaper in the history of the US than during Covid... with 10% inflation and 0% interest rates, and a 10% deficit spending on stimulus.
The money was cheap because of COVID. https://www.brookings.edu/research/fed-response-to-covid19/
Covid made it dirty cheap but money was cheap before as well, or at least cheaper than it is now [1]. Anyway what I meant was that Confluent is not the kind of company that hired more because it thought that Covid changes in business where going to last forever (a la Shopify or Meta).
[1] https://www.fxempire.com/macro/united-states/interest-rate
[1] https://www.fxempire.com/macro/united-states/interest-rate
Money has been cheap since the aftermath of the 2008 crisis, it wasn't just COVID, it's been that way for more than a decade.
Overhiring doesn't affect the common people (except positively) - overfiring of course affects those fired.
Given how much overlap there is between boards at these companies, it might not just be them seeing others doing it, it might also be that members of the board at company x are already involved in layoffs as board members of company y.
And it's very reasonable for the board to at least ask: "Why do we think we're so special?" Which may have a good answer. But also may not.
What if the answer was "There's data to show layoffs are counter productive, not just for us but for most of these companies. They're jumping off a cliff and we don't have to follow" ?
Presumably some number of companies arrived at that answer and thus won't do layoffs, while others dispute the data or think that they're in the minority of companies where layoffs are good.
I wanna learn more. Do you have a reference / pointer to this data?
Here's an article and it's "update" (continuation of the same)
https://hbr.org/2018/05/layoffs-that-dont-break-your-company
https://hbr.org/2022/12/what-companies-still-get-wrong-about...
https://hbr.org/2018/05/layoffs-that-dont-break-your-company
https://hbr.org/2022/12/what-companies-still-get-wrong-about...
I saw this posted a little bit ago:
https://news.ycombinator.com/item?id=34480314
Board members are not selected for their ability to follow reason.
Presumably answered when they were hired to the board?
Is it inconceivable that layoffs are the right choice for a business?
Some businesses, sure. Some of the big tech companies that are doing layoffs though (like Google) are just fine financially, and are losing two decades' worth of employee morale and goodwill for a temporary stock bump that is already dissipating. Memegen is a firestorm, and everyone is now talking about the importance of being on safe projects and staying away from experimental/unproven ones. That's going to hurt Google's prospects of launching anything else revolutionary even further.
Google hasn’t really demonstrated a good track record of revolutionary launches. Doing so requires risk and long term investment and vision. Bigger companies have more to lose with risk and thus take much “safer” risks because CEO and middle management are incentivized to do that - risky bets might cause you to be on the losing side of a bet and end up regressing from where you are now. Risky bets are also how you can attain 1000x results but management is incentivized and condition for loss avoidance. That’s why in-house incubators always fail to produce billion dollar businesses - the incentive structure is very wrong. For everything else that Ruth has delivered to Google in terms of getting it into a supremely healthy financial position, I think the concerns about her killing “Google” have been largely borne out (whether or not that’s her or just her delivering what was asked doesn’t really matter - it’s probably both).
Facebook is about the only company attempting to do this at the size of the big tech companies with Oculus. I think because it’s viewed as an existential threat that they otherwise don’t have their own platform so temporary headwinds / market punishing them for investing so heavily is less a concern for the board and Mark. Ford had to outsource this with Cruise and it’s a delicate balance even then. Apple is interesting to watch because they make very few moves in public that it’s hard to see what’s going on even from the inside in terms of innovation. Toyota is an example of taking a bad “market risk” investing into hydrogen although I think that’s an example of either saving face until they fix their EV story, truly making a misstep, or the story being misreported (eg hydrogen for fleet vehicles and trucks but EV for individuals).
Facebook is about the only company attempting to do this at the size of the big tech companies with Oculus. I think because it’s viewed as an existential threat that they otherwise don’t have their own platform so temporary headwinds / market punishing them for investing so heavily is less a concern for the board and Mark. Ford had to outsource this with Cruise and it’s a delicate balance even then. Apple is interesting to watch because they make very few moves in public that it’s hard to see what’s going on even from the inside in terms of innovation. Toyota is an example of taking a bad “market risk” investing into hydrogen although I think that’s an example of either saving face until they fix their EV story, truly making a misstep, or the story being misreported (eg hydrogen for fleet vehicles and trucks but EV for individuals).
> Google hasn’t really demonstrated a good track record of revolutionary launches.
I disagree. Search was the original product, and since then, Google has launched the following other products/technologies that I would also describe as revolutionary: Gmail, Maps, Android, Chrome, Ads/AdSense, YouTube (depending on who you give credit to), MapReduce, Kubernetes, TPUs, TensorFlow, and I'm sure I'm missing some.
The trajectory of these revolutionary launches over time does seem to be decelerating though even as the company gets larger. And with these layoffs it'll likely get even worse, not better.
I disagree. Search was the original product, and since then, Google has launched the following other products/technologies that I would also describe as revolutionary: Gmail, Maps, Android, Chrome, Ads/AdSense, YouTube (depending on who you give credit to), MapReduce, Kubernetes, TPUs, TensorFlow, and I'm sure I'm missing some.
The trajectory of these revolutionary launches over time does seem to be decelerating though even as the company gets larger. And with these layoffs it'll likely get even worse, not better.
Google didn't launch YouTube, Android, or DoubleClick; those were acquisitions.
It grew them by orders of magnitude and in some cases saved them from failure outright.
I expect a retort like this because it’s so common.
And to be clear. I’m not talking about technical infrastructure pieces (eg k8s was kept in house for forever as Borg and then an open source version was built when it was clear they could sell it). Google has a lot of good pieces there and whether or not you can scale is mostly (but not fully) question of being right. When it’s a question of being right on a binary question, these soft politics phenomena disappear because reality is immune to that.
However.
Search: yes. Their first product alongside ads. Today it still represents something like 80% of ALL Alphabet revenue (and probably a much larger share of the profit provided). Anyway, bad example because search and ads were developed when the company was a startup. By necessity that’s your high risk bet.
Gmail: yes. Still early enough in the company’s DNA to take a bold bet. They’ve totally failed that space though by failing to invest and take gambles. Back in the day this also captured almost all IM traffic because EVERYONE had gmail. Now you might get a fresh can of paint every once in a while but there’s nothing bold. The reason? You have billions of users: if you make any meaningful change you’ll lose the ones that aren’t early adopters, especially if a change in direction has instability or feature loss (see Inbox). See their total incoherence on what to do about messaging, a problem they wouldn’t even have if they continued to take risks and innovate a decade prior.
Orkut: they could have had a social network. Gave up on it before truly figuring out how to make it work. Then G+ as an emergency Hail Mary that went nowhere for many reasons, not least of which is that bold risks need to still start small and grow and they went immediately for the billion+ market (notice the copy of GMails rollout strategy that was a poor imitation and failed to realize why that worked - cache and buzz driving “must have this” demand instead of a product copy that was meh and invitations that were more just how far away you were from the elite).
Speaking of social. Google Wave. See: Slack eating their lunch here. Heck, even FB workplace is miles ahead of Google Chat which still can’t figure out scrolling, scheduling posts and reminders, and requesting messages to be silent.
Maps: yes, fantastic. They’ve failed to keep innovating and taking bets here though. Notice the acquisition of Waze. In the long run, expect Maps to falter. The only saving grace is that Maps is important to their ad strategy so as long as users and revenue are aligned they won’t let it get too bad.
Android: first, acquisition. 2. Bold bet that had leadership buy-in for same reason as Oculus at FB - you have to own the platform if you’re an advertising company as otherwise the owner of the platform has you by the balls. See Chrome.
Chrome: yup. Fantastic innovative bold product at launch. Since then, mediocre incremental value with no new bold risk-taking ideas (unless you count pissing off loyal users and enthusiasts).
Ads/Adsense: see above. Too early in the company’s life + it’s 80% of their revenue. They don’t take any bold bets with this cash cow.
YouTube: acquisition. See above - failure to capitalize on social graph, failure to take meaningful innovation risks instead of slowly and methodically growing the business.
MapReduce: neat technical idea that actually preexisted Google’s idea. Google has largely abandoned it anyway afaik as other techniques work better / have better modern tools.
Spanner: this one has some staying power and is innovative but it feels like they continue to fail to innovate here.
TPUs: not bold or revolutionary. Take existing embarrassingly parallel problem you’re running on GPUs and build an ASIC. They’ve done excellent innovation and technical work here. Don’t get me wrong. But it’s not been a huge risky bet leading the market (and they don’t even sell TPUs as standalone units you can buy which would be truly a risky bet to eat their own cloud offering).
So in essence, they’ve always been slowing down for a long time and most of the things you listed as big risky bets just aren’t that. Certainly none of the technical stuff - that’s driven by in-house demand / obvious market demand. I’m talking about changing the rules of the market. If you own the market you’re not going to change the rules because you might not end up on top. See Clayton Christensen. I do think we should limit the ability for a market leader to enter new spaces though and how much they can charge. Once you’re big your ability to manipulate the markets creates meaningful market inefficiencies. The common belief is that these get sorted out over time but I’m not so sure / I’m not sure that regulations can’t help shorten how long market inefficiencies promulgate.
And to be clear. I’m not talking about technical infrastructure pieces (eg k8s was kept in house for forever as Borg and then an open source version was built when it was clear they could sell it). Google has a lot of good pieces there and whether or not you can scale is mostly (but not fully) question of being right. When it’s a question of being right on a binary question, these soft politics phenomena disappear because reality is immune to that.
However.
Search: yes. Their first product alongside ads. Today it still represents something like 80% of ALL Alphabet revenue (and probably a much larger share of the profit provided). Anyway, bad example because search and ads were developed when the company was a startup. By necessity that’s your high risk bet.
Gmail: yes. Still early enough in the company’s DNA to take a bold bet. They’ve totally failed that space though by failing to invest and take gambles. Back in the day this also captured almost all IM traffic because EVERYONE had gmail. Now you might get a fresh can of paint every once in a while but there’s nothing bold. The reason? You have billions of users: if you make any meaningful change you’ll lose the ones that aren’t early adopters, especially if a change in direction has instability or feature loss (see Inbox). See their total incoherence on what to do about messaging, a problem they wouldn’t even have if they continued to take risks and innovate a decade prior.
Orkut: they could have had a social network. Gave up on it before truly figuring out how to make it work. Then G+ as an emergency Hail Mary that went nowhere for many reasons, not least of which is that bold risks need to still start small and grow and they went immediately for the billion+ market (notice the copy of GMails rollout strategy that was a poor imitation and failed to realize why that worked - cache and buzz driving “must have this” demand instead of a product copy that was meh and invitations that were more just how far away you were from the elite).
Speaking of social. Google Wave. See: Slack eating their lunch here. Heck, even FB workplace is miles ahead of Google Chat which still can’t figure out scrolling, scheduling posts and reminders, and requesting messages to be silent.
Maps: yes, fantastic. They’ve failed to keep innovating and taking bets here though. Notice the acquisition of Waze. In the long run, expect Maps to falter. The only saving grace is that Maps is important to their ad strategy so as long as users and revenue are aligned they won’t let it get too bad.
Android: first, acquisition. 2. Bold bet that had leadership buy-in for same reason as Oculus at FB - you have to own the platform if you’re an advertising company as otherwise the owner of the platform has you by the balls. See Chrome.
Chrome: yup. Fantastic innovative bold product at launch. Since then, mediocre incremental value with no new bold risk-taking ideas (unless you count pissing off loyal users and enthusiasts).
Ads/Adsense: see above. Too early in the company’s life + it’s 80% of their revenue. They don’t take any bold bets with this cash cow.
YouTube: acquisition. See above - failure to capitalize on social graph, failure to take meaningful innovation risks instead of slowly and methodically growing the business.
MapReduce: neat technical idea that actually preexisted Google’s idea. Google has largely abandoned it anyway afaik as other techniques work better / have better modern tools.
Spanner: this one has some staying power and is innovative but it feels like they continue to fail to innovate here.
TPUs: not bold or revolutionary. Take existing embarrassingly parallel problem you’re running on GPUs and build an ASIC. They’ve done excellent innovation and technical work here. Don’t get me wrong. But it’s not been a huge risky bet leading the market (and they don’t even sell TPUs as standalone units you can buy which would be truly a risky bet to eat their own cloud offering).
So in essence, they’ve always been slowing down for a long time and most of the things you listed as big risky bets just aren’t that. Certainly none of the technical stuff - that’s driven by in-house demand / obvious market demand. I’m talking about changing the rules of the market. If you own the market you’re not going to change the rules because you might not end up on top. See Clayton Christensen. I do think we should limit the ability for a market leader to enter new spaces though and how much they can charge. Once you’re big your ability to manipulate the markets creates meaningful market inefficiencies. The common belief is that these get sorted out over time but I’m not so sure / I’m not sure that regulations can’t help shorten how long market inefficiencies promulgate.
I'm not familiar with all of those but if the ones I am none are revolutionary. They are mostly just a large company using their vast resources to capture market share. Gmail, Android and Chrome aren't revolutionary in the least bit. They are just Google taking over existing segments to sell ads more effectively. Same for maps, perhaps street view was at the least innovative.
That sounds like some pretty high standards then. What within the area of tech would you classify as revolutionary then? I'm guessing DARPA: The Internet, IBM/Microsoft: the PC, Apple: the iPhone. Anything else?
I'm talking about the next category of innovation down, whatever you want to call it if you feel "revolutionary" needs to be reserved for generation-defining technologies. Because with your current definition, the vast majority of even large tech companies will never have a product that meets it.
I'm talking about the next category of innovation down, whatever you want to call it if you feel "revolutionary" needs to be reserved for generation-defining technologies. Because with your current definition, the vast majority of even large tech companies will never have a product that meets it.
Disruption and innovation would look like:
1. There’s ML research that clearly shows that you can convert video streams into neural nets that only need to transmit a very small amount of bandwidth for a high quality construction on the remote. Why didn’t this research come out of Google which has gobs of people working on the space? Why hasn’t the Meet team figured out how to get this into customers hands? Certainly the hardware for it exists and it would drastically change what a video call experience looks like.
2. They abandoned Google glass (correctly - that was a terrible product) and their VR in favor of sitting back and watching what others accomplish to then copy cat what a successful product would look like. Why didn’t they wait for in-lens displays while continuing to invest in the R&D of the product itself?
3. Android is a know memory hog. Android phones require 2x the amount of RAM as an iPhone for the same performance. Why hasn’t Google figured out how to bridge this gap? This is also a big reason why they’re watches struggle.
4. I was advocating to an SVP that Google should release a wearable digital watch/fitness band that’s a very basic experience focused on actual value add instead of a smartwatch: an SE so that Google Pay works without needing internet connectivity, mDL integrated, BT phone calls for the cellular enabled version, basic fitness sensors. It was shot down because he didn’t think it could make his P&Ls only for the SVP to later publicly call out the Android SVP for “why did Apple get to mDL first” ignoring that I was the first Bay Area engineer on the ISO committee.
5. Google took a long time to materialize their in-house CPU and it’s largely been underwhelming I think compared to what Apple’s been doing. Of course they started not too long ago (very late) and are copying Apple’s playbook so not sure how innovative. But for a company that’s been making their own HW since forever…it took them a long time just to make the decision to copy. There’s a lot of cool buzzwords but hard to compare value. Disruptive play: compete with Qualcomm here.
6. Fiber: gave up instead of figuring out how to outcompete telco business practices only to resurrect it again.
7. Stadia: instead of going with a disruptive Netflix-like business model and eating the upfront costs to publishers, they tried and failed. There’s a theme here that Rick is not cut up for anything more innovative than managing mature P&L products.
Then there’s all the dead end projects that they refuse to can because they are unlikely to deliver on the vision. Most of their efforts around “health” are vanity efforts that don’t require the amount of man hours being invested (certainly not rolled up under the commercial health app product line). Or at least this was the case many years ago - not sure about now. They talked a huge game about all the things they were going to enable and have a proven track record of not being able to deliver on any of them. X is neat pie in the sky ideas that never materialize. Moonshot ideas actually require you to get to the moon once. Don’t think any of that has ever come out of X.
Deep mind is probably the best innovative jewel in Google’s arsenal. Most of their magic comes from keeping Google disease at arm’s length. It might be interesting to see a Google with Demis Hassabis at the helm and a mandate to bring back some innovation to Google.
1. There’s ML research that clearly shows that you can convert video streams into neural nets that only need to transmit a very small amount of bandwidth for a high quality construction on the remote. Why didn’t this research come out of Google which has gobs of people working on the space? Why hasn’t the Meet team figured out how to get this into customers hands? Certainly the hardware for it exists and it would drastically change what a video call experience looks like.
2. They abandoned Google glass (correctly - that was a terrible product) and their VR in favor of sitting back and watching what others accomplish to then copy cat what a successful product would look like. Why didn’t they wait for in-lens displays while continuing to invest in the R&D of the product itself?
3. Android is a know memory hog. Android phones require 2x the amount of RAM as an iPhone for the same performance. Why hasn’t Google figured out how to bridge this gap? This is also a big reason why they’re watches struggle.
4. I was advocating to an SVP that Google should release a wearable digital watch/fitness band that’s a very basic experience focused on actual value add instead of a smartwatch: an SE so that Google Pay works without needing internet connectivity, mDL integrated, BT phone calls for the cellular enabled version, basic fitness sensors. It was shot down because he didn’t think it could make his P&Ls only for the SVP to later publicly call out the Android SVP for “why did Apple get to mDL first” ignoring that I was the first Bay Area engineer on the ISO committee.
5. Google took a long time to materialize their in-house CPU and it’s largely been underwhelming I think compared to what Apple’s been doing. Of course they started not too long ago (very late) and are copying Apple’s playbook so not sure how innovative. But for a company that’s been making their own HW since forever…it took them a long time just to make the decision to copy. There’s a lot of cool buzzwords but hard to compare value. Disruptive play: compete with Qualcomm here.
6. Fiber: gave up instead of figuring out how to outcompete telco business practices only to resurrect it again.
7. Stadia: instead of going with a disruptive Netflix-like business model and eating the upfront costs to publishers, they tried and failed. There’s a theme here that Rick is not cut up for anything more innovative than managing mature P&L products.
Then there’s all the dead end projects that they refuse to can because they are unlikely to deliver on the vision. Most of their efforts around “health” are vanity efforts that don’t require the amount of man hours being invested (certainly not rolled up under the commercial health app product line). Or at least this was the case many years ago - not sure about now. They talked a huge game about all the things they were going to enable and have a proven track record of not being able to deliver on any of them. X is neat pie in the sky ideas that never materialize. Moonshot ideas actually require you to get to the moon once. Don’t think any of that has ever come out of X.
Deep mind is probably the best innovative jewel in Google’s arsenal. Most of their magic comes from keeping Google disease at arm’s length. It might be interesting to see a Google with Demis Hassabis at the helm and a mandate to bring back some innovation to Google.
What is memegen?
A meme sharing internal website.
At the moment it's also the most reliable source of information for what happens across Google's PAs (Product Areas).
At the moment it's also the most reliable source of information for what happens across Google's PAs (Product Areas).
A google internal meme generating+sharing page.
A Google Monopoly that needs to be broken up and opened to the public (mainly, xooglers).
lol right. I want to rollover my Mcmillen score just like a 401k
> Mcmillen score
I'm unfamiliar with this term and a quick search didn't produce any meaningful results.
What is it?
I'm unfamiliar with this term and a quick search didn't produce any meaningful results.
What is it?
The meme version of h-index.
https://en.wikipedia.org/wiki/H-index
https://en.wikipedia.org/wiki/H-index
Think reddit karma, but for making memes.
> (like Google) are just fine financially
Why do you think you know what is in Google's best long-term interest? Do you think you could run the company?
Why do you think you know what is in Google's best long-term interest? Do you think you could run the company?
Yes. They never are. A recent study investigated this and neither stock price nor productivity nor profitability improved. All mass layoffs do is crater employee morale. And yes, it's a "others are jumping into the lake with their clothes on, let's get our brooks brothers shirts wet, too" thing without any rational cogitation involved..
That seems absurd. I've worked at big companies. They sometimes have staff, often _lots_ of staff, like whole orgs, that are a net drain on the company. What's the alternative in that situation?
Granted, getting into that situation was probably "executives making stupid mistakes" -- seems like it usually is -- and granted, they're probably not saying "we have to do these layoffs because I was an idiot last year", and they're probably not taking commensurate pay cuts. But still. It can certainly and obviously be good for the company's health to have fewer people on its payroll.
Granted, getting into that situation was probably "executives making stupid mistakes" -- seems like it usually is -- and granted, they're probably not saying "we have to do these layoffs because I was an idiot last year", and they're probably not taking commensurate pay cuts. But still. It can certainly and obviously be good for the company's health to have fewer people on its payroll.
> That seems absurd. I've worked at big companies. They sometimes have staff, often _lots_ of staff, like whole orgs, that are a net drain on the company. What's the alternative in that situation?
Well, the evidence is that mass layoffs aren't having the result of being very positive for companies that engage in them.
Given that what you say also feels true, in my experience, an explanation immediately suggests itself:
Big companies rarely if ever manage to mass lay off only unproductive staff, or net-drain internal orgs. Rather, they're almost always implemented as an across-board X% haircut for most departments with little targeting whatsoever. So in the end, they don't solve the problem you're identifying, and that's why the evidence says they end up doing nothing positive for the company.
Well, the evidence is that mass layoffs aren't having the result of being very positive for companies that engage in them.
Given that what you say also feels true, in my experience, an explanation immediately suggests itself:
Big companies rarely if ever manage to mass lay off only unproductive staff, or net-drain internal orgs. Rather, they're almost always implemented as an across-board X% haircut for most departments with little targeting whatsoever. So in the end, they don't solve the problem you're identifying, and that's why the evidence says they end up doing nothing positive for the company.
I think its more complex than that: even if, by magic, you managed to lay off every non-contributing worker, and only them, the affect on employee morale is significant, and would cause contributing employees to leave completely or contribute less. Reducing the total output for the company.
And I'd also suggest that very few, if at all, employees has zero contribution. It's just that some of those contributions are invisible to you.
And I'd also suggest that very few, if at all, employees has zero contribution. It's just that some of those contributions are invisible to you.
> So in the end, they don't solve the problem you're identifying
It may be unpopular to say this, but of course it does. Just hire more people if you need to and hope that you're making the right decision. Yes, it has a terrible effect on employee morale, but that's a tough thing to quantify so it won't show up on the balance sheet.
It's too soon to know if the impact of layoffs on most of the companies doing them is positive or not. twitter is an anomaly: that was driven by basic stupidity!
When the $BIGCO I worked for was acquired, instructions were to cut 8% headcount across the board. We were explicitly told that they expected that some valuable people would be cut accidentally, but that's unfortunate. No one should be unreplaceable and if they really are, this is a way to find out and change processes so it can't happen again.
It may be unpopular to say this, but of course it does. Just hire more people if you need to and hope that you're making the right decision. Yes, it has a terrible effect on employee morale, but that's a tough thing to quantify so it won't show up on the balance sheet.
It's too soon to know if the impact of layoffs on most of the companies doing them is positive or not. twitter is an anomaly: that was driven by basic stupidity!
When the $BIGCO I worked for was acquired, instructions were to cut 8% headcount across the board. We were explicitly told that they expected that some valuable people would be cut accidentally, but that's unfortunate. No one should be unreplaceable and if they really are, this is a way to find out and change processes so it can't happen again.
I wonder if, despite not being a benefit, they avoid a worse outcome at the same time? perhaps the evidence can distinguish those, not sure. It seems like if "not a benefit" means "the stock or performance or profitability didn't go up"... well, I think stock prices are a very trailing indicator of the health the company, since executives are incentivized to pamper over anything bad about it. So the layoffs may reflect the fact that "things have been bad for a while" and thus the metrics staying flat would imply that they would have gone down if they _hadn't_ done it.
They risk laying of RedundantHuman93, who years ago was super human according to the metrics then, and retains the most in-depth institutional knowledge from being core to the business, but on paper for this layoff and it's (holy financial crusade) metrics looks like a lesser performer because their projects are just 'part of the institution' or they are bogged down in tons of unsexy deadwood 'keep the business running tasks' at this point and uninteresting 'overhead' that 'anyone can do'. But once they let RedundantWetware93 go the company realizes the mistake and have to hire them back as a consultant at greater expense, now with zero buyin from ParasiticMeatsackConsultant93, and as they interact with many core people/departments their lack of buyin and the reason for it impacts large core groups of biologicalLoborUnits. The company is also less flexible as they now have to schedule around Deadwood93s availability. Without the 'underperformer' the company is at risk of falling out of applicable legal/industry regulation/various compliance requirements because that stuff's all invisible and 'of course someone takes care of that stuff' without thinking who catches all the little intimate details that require a proactive thinking human being. They stop paying attention to specific customer commitments/requirements/requests that are just going to be dropped now, with potential contractual lawsuits and definite loss of customer good will.
All humans are not just FutureRedundantWetwareMeatsacks that the all knowing bean counters can move around on a board. In reality business is about relationship/small detail institutional knowledge silo'd in individuals/humans proactively getting done what needs doing, many details that get poorly caught by tribal documentation systems.
If your people are truly cogs you don't have a business, you have a franchise, and anyone else can do the cookie cutter things your business is doing, and most likely better/cheaper/flashier. But for some reason HK and all these companies doing layoffs either don't understand that, or they WANT to turn their company into a generic franchise where everyone is interchangeable and lose the flexibility/capability/competency that being a business of interconnected humans gives.
All humans are not just FutureRedundantWetwareMeatsacks that the all knowing bean counters can move around on a board. In reality business is about relationship/small detail institutional knowledge silo'd in individuals/humans proactively getting done what needs doing, many details that get poorly caught by tribal documentation systems.
If your people are truly cogs you don't have a business, you have a franchise, and anyone else can do the cookie cutter things your business is doing, and most likely better/cheaper/flashier. But for some reason HK and all these companies doing layoffs either don't understand that, or they WANT to turn their company into a generic franchise where everyone is interchangeable and lose the flexibility/capability/competency that being a business of interconnected humans gives.
> That seems absurd. I've worked at big companies. They sometimes have staff, often _lots_ of staff, like whole orgs, that are a net drain on the company. What's the alternative in that situation?
It’s tough. Look at Amazon. They cull the bottom 5% every year. It has a negative affect on morale because everyone is continuously on edge and having a bad month or two can be dangerous. Look at a layoff, it craters morale and reduces productivity.
The best bet seems to be to grow slow, hire and retain the best, and fire the low performers only as needed.
After that, look at corporate giants like IBM. They are laying off, yes, but historically they just lurched along, providing a paycheck to everyone.
It’s tough. Look at Amazon. They cull the bottom 5% every year. It has a negative affect on morale because everyone is continuously on edge and having a bad month or two can be dangerous. Look at a layoff, it craters morale and reduces productivity.
The best bet seems to be to grow slow, hire and retain the best, and fire the low performers only as needed.
After that, look at corporate giants like IBM. They are laying off, yes, but historically they just lurched along, providing a paycheck to everyone.
I worked at Amazon (a while ago) and they both (a) did not do that and (b) what firing they did not, imo, affect morale. If anything the fact that really bad engineers were quickly removed was probably a net positive for morale.
There were a couple of dubious episodes, though, where a bad manager tried to do something to people they didn't like. Sometimes it worked (aka, negatively affected people) and sometimes the manager got in trouble instead. So it's not like all good. But it was heavily dependent on the managers you ended up under.
There were a couple of dubious episodes, though, where a bad manager tried to do something to people they didn't like. Sometimes it worked (aka, negatively affected people) and sometimes the manager got in trouble instead. So it's not like all good. But it was heavily dependent on the managers you ended up under.
Layoffs may have second order cost saving effects (e.g., reducing competitive upward pressure on salaries, discouraging staff from asking for raises), but those seem impossible to measure
What should a business do that has more people on payroll than their revenues can support?
I think the argument is that you shouldn't get into the position where mass layoffs are the solution, just like you shouldn't get into the position where gastric bypass surgery is your only option.
Something like each team is maintaining themselves at a proper rate, laying off inside the team as necessary. But even then you will at times have to fire entire teams, but those aren't really a "mass layoff" so much as "we're not doing X anymore".
Something like each team is maintaining themselves at a proper rate, laying off inside the team as necessary. But even then you will at times have to fire entire teams, but those aren't really a "mass layoff" so much as "we're not doing X anymore".
[deleted]
Yeah, but reality bites. You're in the situation that you're in and you have to deal with what's in front of you.
I mean if your company makes ~150M a quarter and has operating expenses of 217M and cost of revenues of 53M a 6% cut towards your operating expenses isn't going to get you anywhere close to profitable.
https://investors.confluent.io/node/8031/html
https://investors.confluent.io/node/8031/html
Use those people to build products that increase revenues. Isn't that why they were hired in the first place?
Do you have a link to that study would like to share that with someone.
This may lead you to it: https://news.stanford.edu/2022/12/05/explains-recent-tech-la...
It's not inconceivable, but it's weird that everybody is doing it at the same time even when the company is perfectly healthy.
It could be because they're all planning for market conditions predicted by the same forecasts.
Also if your strategy is to hire as many engineers as you can possibly afford so that you can keep up with or beat the competition, then if the competition starts downsizing it means you can do the same, and maybe you see an economic contraction as a bigger risk.
Conjecture of course, but plausible I think.
Also if your strategy is to hire as many engineers as you can possibly afford so that you can keep up with or beat the competition, then if the competition starts downsizing it means you can do the same, and maybe you see an economic contraction as a bigger risk.
Conjecture of course, but plausible I think.
Is it weird at all given the market, inflation, and debt?
patagonia see, patagonia do. I blame the boards.
Do not play to where the ball is, play to where the ball will (might) be.
If you are almost surely going out of business, have some revenue but no good option for reducing your costs, yes a mass layoff has a higher chance to save you than doing nothing.
If you had a healthy business and do a mass layoff, you don't have a healthy business anymore.
If you had a healthy business and do a mass layoff, you don't have a healthy business anymore.
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This is also why so many tech companies hired-up in 2021.
I can’t comment on whether this is blind following or not. But it’s a real fact that the market will punish you less for layoffs when others are doing it too. It’s like how the best time to reveal a scandal is after someone else has revealed a bigger scandal.
It's not just that the market will punish you less. Companies are hoping that the market will actually reward them for layoffs. Unfortunately, these moves can and will be damaging to long term prospects at some companies. But long term thinking isn't something markets generally care about.
It's up to companies to push back against market pressure to maintain long term progress, but it's a tough balancing act to do that while avoiding being punished by investors.
It's up to companies to push back against market pressure to maintain long term progress, but it's a tough balancing act to do that while avoiding being punished by investors.
Honestly, I don't think these layoffs (broadly speaking) are dangerous long term.
In fact, and this may be unpopular, I think they will be greatly beneficial long term.
Consider:
- These companies grew at greatly-expanded rates over the past few years. Google notoriously added 20% per year for 7 years straight, doubling their staff from 2017-2023. After layoffs, Google will still be right near ALL-TIME-HIGHS in staffing. Same with most of these firms. Small layoffs following the fastest growth period in their history isn't some catastrophe for their business
- Most roles being reduced at most companies are not product-creating but administrative. Lots of HR, hiring, marketing, middle managers, getting axed. If companies predict less hiring or lower ad budgets... then reducing those divisions makes sense. If you doubled your hiring team while you were hiring 20% per year, but now you expect to stay steady and only replace attrition ... what would you do with all that hiring staff?
The real damage to their long term prospects was over-hiring the past 3 years and saddling their businesses with a major problem.
In fact, and this may be unpopular, I think they will be greatly beneficial long term.
Consider:
- These companies grew at greatly-expanded rates over the past few years. Google notoriously added 20% per year for 7 years straight, doubling their staff from 2017-2023. After layoffs, Google will still be right near ALL-TIME-HIGHS in staffing. Same with most of these firms. Small layoffs following the fastest growth period in their history isn't some catastrophe for their business
- Most roles being reduced at most companies are not product-creating but administrative. Lots of HR, hiring, marketing, middle managers, getting axed. If companies predict less hiring or lower ad budgets... then reducing those divisions makes sense. If you doubled your hiring team while you were hiring 20% per year, but now you expect to stay steady and only replace attrition ... what would you do with all that hiring staff?
The real damage to their long term prospects was over-hiring the past 3 years and saddling their businesses with a major problem.
> The real damage to their long term prospects was over-hiring the past 3 years and saddling their businesses with a major problem.
So, the real damage was the people who ordered to over hire (usually top-level executives). If any, they should be lay off to actually mitigate long-term damage.
So, the real damage was the people who ordered to over hire (usually top-level executives). If any, they should be lay off to actually mitigate long-term damage.
I think this is all basically true, but what is interesting to me is that these incumbent tech companies were greedy when everyone was greedy and in so doing they created an opening for someone who is greedy when others are fearful to come and eat their cake.
That's wrong. If everyone is doing something irrational that is a big inefficiency in the market and whoever does the opposite eg. hiring will get better outcomes as opposed doing it when all do.
Yeah but in general if you're trying to minimise disaster instead of maximising being the winner, you opt for doing things that avoid revealing you as the being the only wrong one. Being wrong in a crowd is fine. Being the only one wrong is a big deal, "what were they thinking, they knew better than everyone else?!". If everyone does the same mistake, it's just shrugged off as "honest mistake, everyone was doing it."
Plus either way you're cutting expenses and maybe getting rid of some under performers.
Plus either way you're cutting expenses and maybe getting rid of some under performers.
Being wrong alone means you had a flawed thought process.
Being wrong in a crowd means you have no thought process at all.
All the big companies doing layoffs are in the stagnation phase. "minimise disaster instead of maximising being the winner" is exactly that.
Being wrong in a crowd means you have no thought process at all.
All the big companies doing layoffs are in the stagnation phase. "minimise disaster instead of maximising being the winner" is exactly that.
Market values aren't driven by outcomes, those are in the future; they're driven by beliefs about outcomes.
I don't know about Confluent, but I can tell you that sales (and therefore revenue) have seen significant drops in most industries. This is wholly expected in a rising rate environment.
When sales drop, revenue also falls. When revenue falls, models get re-evaluated and numbers get re-calculated. Reducing expenses becomes a priority.
When reducing expenses becomes a priority, SaaS contracts get evaluated very closely. Unnecessary seats are removed. Contracts are re-negotiated. Income for SaaS companies like Confluent drop rapidly, and they may continue to drop more. So I don't think this is blind trend-following, I think this is a rational response to a rapidly changing market.
A company can be profitable and it can still make sense to lay off certain employees. In-house recruiter positions are some of the first to be cut right now because companies are pulling back on hiring. If you have a hiring freeze and very low hiring forecasts for the next year, why would you continue to employee a lot of recruiters?
Market conditions change. Companies adapt to the change. When you have people in positions that are seeing less demand for the coming year, it doesn't make sense to keep them on the payroll and have them sit idle. It's rational to readjust the workforce.
Nobody likes getting laid off, but no position is truly permanent.
When sales drop, revenue also falls. When revenue falls, models get re-evaluated and numbers get re-calculated. Reducing expenses becomes a priority.
When reducing expenses becomes a priority, SaaS contracts get evaluated very closely. Unnecessary seats are removed. Contracts are re-negotiated. Income for SaaS companies like Confluent drop rapidly, and they may continue to drop more. So I don't think this is blind trend-following, I think this is a rational response to a rapidly changing market.
A company can be profitable and it can still make sense to lay off certain employees. In-house recruiter positions are some of the first to be cut right now because companies are pulling back on hiring. If you have a hiring freeze and very low hiring forecasts for the next year, why would you continue to employee a lot of recruiters?
Market conditions change. Companies adapt to the change. When you have people in positions that are seeing less demand for the coming year, it doesn't make sense to keep them on the payroll and have them sit idle. It's rational to readjust the workforce.
Nobody likes getting laid off, but no position is truly permanent.
>When reducing expenses becomes a priority, SaaS contracts get evaluated very closely. Unnecessary seats are removed. Contracts are re-negotiated. Income for SaaS companies like Confluent drop rapidly, and they may continue to drop more.
This has been a long time coming. Some of the numbers I have been seeing for these contracts are truly mindblowing for the value delivered. The days of gouging enterprise on these random non-critical SaaS integrations is probably over.
The one that still really gets me is Slack. Even medium sized companies are paying millions per year for a glorified IRC client. It just doesn't add up.
This has been a long time coming. Some of the numbers I have been seeing for these contracts are truly mindblowing for the value delivered. The days of gouging enterprise on these random non-critical SaaS integrations is probably over.
The one that still really gets me is Slack. Even medium sized companies are paying millions per year for a glorified IRC client. It just doesn't add up.
Slack is an interesting one. Suppose you're a company spending a lot on it, too much. What are your options?
Replacing slack with a comparable like Teams or Gchat is at least a step back in user-friendliness that will be grumbled about by engineers and others, and if you use a lot of integrations there might be significant switching costs.
Moving away from instant messaging as a communication pattern sounds great to me, but good luck convincing folks to change company culture that significantly.
Replacing slack with a comparable like Teams or Gchat is at least a step back in user-friendliness that will be grumbled about by engineers and others, and if you use a lot of integrations there might be significant switching costs.
Moving away from instant messaging as a communication pattern sounds great to me, but good luck convincing folks to change company culture that significantly.
This is exactly what's happening at a previous employer. We used slack for near a decade with tons of integrations. It's now being unceremoniously ripped out because Teams is "free". Will probably cost them more than they're saving from the contract just because of the migration cost.
It’s millions a year and ms teams is near free. In a cost cutting environment this is near perfect.
How big of a team costs that much? Looks like the highest listed price is $180/person/year before it becomes "call us" pricing. Im sure that enterprise plan can get expensive, but even at $500/person/year that's at least 2000 users.
I'd hope there's lots of things higher on the list of effective cost savings before trying to migrate that many users, and integrations, and history.
Such migrations are happening and will continue to happen, but I expect most will go about as well as the one discussed in a sibling comment.
I'd hope there's lots of things higher on the list of effective cost savings before trying to migrate that many users, and integrations, and history.
Such migrations are happening and will continue to happen, but I expect most will go about as well as the one discussed in a sibling comment.
Nah noone's going to make a fuss out of it when people get axed left and right.
+1 on this. I know for a fact at a couple F100 organizations, CFOs now want final sign-off on contracts valued around $20k-30k/year and above, whereas before that would be left to a VP. There is a lot of belt tightening happening
On a macro-economic level though this is a negative doom loop.
Does recruiting ever comprise more than 3% of a company's staff?
There exists a contingent of people who insist that whenever a big company does something it is because they have gotten all the smartest people to do all the research and run all the numbers and they have determined with absolute confidence that it is the most profitable thing to do. I think about those people sometimes.
> I really get the feeling that many companies are just blindly doing whatever other companies do.
A social contagion if you will. It doesn’t seem rational at all at this point.
Hopefully some of the more naive people in the industry learn something from this. Your employer would happily kill your if it were legal and they made a cent more doing so, let alone something less like fire you.
A social contagion if you will. It doesn’t seem rational at all at this point.
Hopefully some of the more naive people in the industry learn something from this. Your employer would happily kill your if it were legal and they made a cent more doing so, let alone something less like fire you.
Lets give some good companies credit, they value their employees more. They would hold out for at least a dollar before killing you.
> It doesn’t seem rational at all at this point.
Layoffs are rational and are common in downward cycles.
I get the feeling that a lot of the shock and awe here is due to age and a lot of people starting their careers during an extended boom period, particularly in tech which was getting absurd. The last few years in particular were far from rational.
Now the Fed is raising interest rates, housing is cooling, cheap money is no more ... and as a result you get a downward business cycle resulting in layoffs.
I don't see anything new here that hasn't happened over and over again ... but I've been in the industry for decades with multiple companies and sectors.
These companies aren't charities, they aren't meant to retain jobs just because they are profitable, and they definetly aren't your friend. Many of them are publically traded, which at the end of the day are beholden to one and one thing only, the shareholders.
Layoffs are rational and are common in downward cycles.
I get the feeling that a lot of the shock and awe here is due to age and a lot of people starting their careers during an extended boom period, particularly in tech which was getting absurd. The last few years in particular were far from rational.
Now the Fed is raising interest rates, housing is cooling, cheap money is no more ... and as a result you get a downward business cycle resulting in layoffs.
I don't see anything new here that hasn't happened over and over again ... but I've been in the industry for decades with multiple companies and sectors.
These companies aren't charities, they aren't meant to retain jobs just because they are profitable, and they definetly aren't your friend. Many of them are publically traded, which at the end of the day are beholden to one and one thing only, the shareholders.
I'm curious why you are calling them rational? They will lead to reduced morale. And will lead to more attrition afterwards. And probably won't lead to any sort of increased income. So, what makes them any more rational than going straight to bankruptcy?
Layoffs are rational and are common in downward cycles.
What downward cycle?
All I'm hearing is panic and hand-wringing about the economy, but I don't see what the problem is.
We had a "recession" in Q1 and Q2 of 2022. GDP dropped from 20,006 to a low of 19,895, then it went right back to its previous growth path.
Inflation is high, but it's dropping. It maxed out at 9.1% in June of 2022. Now it's down to 6.5% and expected to drop in the upcoming update (Feb 14).
We weathered a global pandemic, subsequent supply chain issues, and a war on the other side of the world that disrupted the energy economy. We're doing great, but people are fretting like it's 2008.
What downward cycle?
All I'm hearing is panic and hand-wringing about the economy, but I don't see what the problem is.
We had a "recession" in Q1 and Q2 of 2022. GDP dropped from 20,006 to a low of 19,895, then it went right back to its previous growth path.
Inflation is high, but it's dropping. It maxed out at 9.1% in June of 2022. Now it's down to 6.5% and expected to drop in the upcoming update (Feb 14).
We weathered a global pandemic, subsequent supply chain issues, and a war on the other side of the world that disrupted the energy economy. We're doing great, but people are fretting like it's 2008.
These companies are using forward-looking metrics to make these types of decisions, it really isn't follow-the-leader.
I don't have access to the data, but it's quite possible with interest rates rising, high inflation, and tightening monetary policy that they are seeing slowing growth/sales. Companies want to get out ahead of that, especially with the massive (and frankly absurd) hiring that these companies did over the last 2 years.
I'm not buying that Microsoft laid of people because Google laid off people, and Spotify laid off people because Microsoft laid off people. Somewhat unfortunately, these public companies are expected to show constant revenue growth, and they will "trim the fat" at a moments notice.
I don't have access to the data, but it's quite possible with interest rates rising, high inflation, and tightening monetary policy that they are seeing slowing growth/sales. Companies want to get out ahead of that, especially with the massive (and frankly absurd) hiring that these companies did over the last 2 years.
I'm not buying that Microsoft laid of people because Google laid off people, and Spotify laid off people because Microsoft laid off people. Somewhat unfortunately, these public companies are expected to show constant revenue growth, and they will "trim the fat" at a moments notice.
These companies are using forward-looking metrics to make these types of decisions
Such as? This seems super hand-wavy.
The pandemic already happened. Inflation peaked last summer, after the Fed responded. The supply chain crunch is resolved or resolving.
They had the bad news months or years ago. What are these forward-looking metrics that are worse than what we already experienced in the last few years, and why isn't the entire market panicking over them?
Such as? This seems super hand-wavy.
The pandemic already happened. Inflation peaked last summer, after the Fed responded. The supply chain crunch is resolved or resolving.
They had the bad news months or years ago. What are these forward-looking metrics that are worse than what we already experienced in the last few years, and why isn't the entire market panicking over them?
It's not just here, but "we need to have a blockchain division / we need to have an AI powered product / We need to have a cloud services strategy / We need to etc"
All these companies have no vision, and are run by people only interested in saving their jobs and/or preparing for their next one.
All these companies have no vision, and are run by people only interested in saving their jobs and/or preparing for their next one.
This post agrees that it’s essentially copycat behavior.
https://news.stanford.edu/2022/12/05/explains-recent-tech-la...
https://news.stanford.edu/2022/12/05/explains-recent-tech-la...
Viral contagion. Code RED. Put all the CEOs in lockdown. Disable internet access.
I would venture that word of mouth is spreading among the elites who are on the boards of all these companies - a storm is coming so everything needs to get tied down - so the CEO’s as captains of the ships are following the advice.
Whether the storm actually hits, what gets wrecked, what doesn’t. That is a completely separate issue to these people.
Whether the storm actually hits, what gets wrecked, what doesn’t. That is a completely separate issue to these people.
What is the storm they're worried about, if not mass layoffs concentrated within an industry?
Inflation is almost down to normal, employment is still high and will remain so as long as the construction sector avoids layoffs due to the coming cash infusion from federal spending bills.
Seems to me the only storm coming is the one created by these same execs, though I understand each of them is incentivized to follow the crowd.
Inflation is almost down to normal, employment is still high and will remain so as long as the construction sector avoids layoffs due to the coming cash infusion from federal spending bills.
Seems to me the only storm coming is the one created by these same execs, though I understand each of them is incentivized to follow the crowd.
I’m not one of those elites. So I would not know what the real forecast is.
I’m just stating a hypothesis on the perspective of, say such CEO’s. To them it’s not pack behavior based on hearsay.
I’m just stating a hypothesis on the perspective of, say such CEO’s. To them it’s not pack behavior based on hearsay.
> Inflation is almost down to normal
Huh? Normal inflation in the US is 2% - that's the Fed's target.
Last month, inflation was 6.5%.
Being 250% above target is not "normal".
Huh? Normal inflation in the US is 2% - that's the Fed's target.
Last month, inflation was 6.5%.
Being 250% above target is not "normal".
That's an unweighted trailing average where the bulk of the increase came from earlier months.
Instantaneous inflation in December 2022 annualizes to 2%.
Instantaneous inflation in December 2022 annualizes to 2%.
"The index for all items less food and energy rose 0.3 percent in December, following a 0.2-percent increase in November. The shelter index continued to increase, rising 0.8 percent over the month."
Food inflation increased over November. Shelter index increased at an annualized rate of nearly 10%.
Sometimes, you have to dig deeper than the headline.
Source: https://www.bls.gov/news.release/pdf/cpi.pdf
Food inflation increased over November. Shelter index increased at an annualized rate of nearly 10%.
Sometimes, you have to dig deeper than the headline.
Source: https://www.bls.gov/news.release/pdf/cpi.pdf
The rest of that same page you quoted from mentions we actually had _deflation_ in December (-0.1% CPI-U), because energy costs fell so much, specifically gas.
"Last month, inflation was 6.5%" is not correct by any reading of this data! Your link makes it clear that was inflation over the course of 2022, as I said in clunkier language. The graph on that same first page shows most of that inflation happened in the first 6 months of 2022.
The average of the last 6 months in that graph is 0.15, or ~1.8% annualized. That's an arbitrary cutoff (including July's 1.3 shoots up to 3.9% annualized!), but it seems clear we're on the right track. If the next 6 months look similar to the last 6, we will look back and say inflation was already under control before 2022 ended.
"Last month, inflation was 6.5%" is not correct by any reading of this data! Your link makes it clear that was inflation over the course of 2022, as I said in clunkier language. The graph on that same first page shows most of that inflation happened in the first 6 months of 2022.
The average of the last 6 months in that graph is 0.15, or ~1.8% annualized. That's an arbitrary cutoff (including July's 1.3 shoots up to 3.9% annualized!), but it seems clear we're on the right track. If the next 6 months look similar to the last 6, we will look back and say inflation was already under control before 2022 ended.
I'm sorry, but I fail to see nearly 1% monthly inflation in the biggest expense category - shelter - as a sign of "being on the right track".
I agree that's high, even for the last year, and certainly not a good or welcome thing, but I'm very glad it's offset by gas prices coming down.
If "being on the right track" means that an increase in one category can't be offset by a decrease in another, that seems like an impossible bar to clear.
It's not obvious to me why inflation there has increased even as mortgage rates have skyrocketed due to the fed; people/institutions feel safer betting on housing prices than on stocks, lately?
If "being on the right track" means that an increase in one category can't be offset by a decrease in another, that seems like an impossible bar to clear.
It's not obvious to me why inflation there has increased even as mortgage rates have skyrocketed due to the fed; people/institutions feel safer betting on housing prices than on stocks, lately?
Shelter and wages are the two core sticky categories of inflation. You don’t negotiate your lease or employment terms every month. Even if there is a change in supply/demand dynamics, it won’t be visible in the market immediately.
This is also why the Fed has been trying to engineer a soft recession. As long as labor markets are tight, there will be sustained wage inflation. And as long as there is wage inflation, there will be people willing to pay higher rates for longer.
The dominant unspoken narrative in the financial markets is that the Fed will overplay its hand and cause a hard recession, at which point they’ll reverse their rate hikes. And when that happens, all the money sitting on the sidelines will reenter the market, leading to sustained inflation. No one really thinks that this beast can be tamed so easily.
This is also why the Fed has been trying to engineer a soft recession. As long as labor markets are tight, there will be sustained wage inflation. And as long as there is wage inflation, there will be people willing to pay higher rates for longer.
The dominant unspoken narrative in the financial markets is that the Fed will overplay its hand and cause a hard recession, at which point they’ll reverse their rate hikes. And when that happens, all the money sitting on the sidelines will reenter the market, leading to sustained inflation. No one really thinks that this beast can be tamed so easily.
it’s not just money sitting on sidelines, there is also risk appetite on the sidelines, reserve work capacity on the sidelines, the ability and willingness to lever up on the sidelines.
To quote HN user @badhombres from the original thread:
> Not surprising. Every company is going to take the opportunity to trim costs when it doesn't affect their PR as much as it would any other time.
I'm pretty sure this is really what's going on here. These CEO's are killing all of these jobs while they can (seemingly without any repercussions).
I was talking with my dad about these layoffs and one of the interesting things we talked about is how different the loyalty formula is nowadays. My dad grew up during a time when folks happily worked for, and were loyal to, one company sometimes for decades. Nowadays, sadly, it's not smart to trust any of these companies for more than a few years. These layoffs prove that. Whether it's companies laying off folks who've been at the company for 20 years (see: Google) or companies laying off new hires, any loyalty seems to be one-sided.
> Not surprising. Every company is going to take the opportunity to trim costs when it doesn't affect their PR as much as it would any other time.
I'm pretty sure this is really what's going on here. These CEO's are killing all of these jobs while they can (seemingly without any repercussions).
I was talking with my dad about these layoffs and one of the interesting things we talked about is how different the loyalty formula is nowadays. My dad grew up during a time when folks happily worked for, and were loyal to, one company sometimes for decades. Nowadays, sadly, it's not smart to trust any of these companies for more than a few years. These layoffs prove that. Whether it's companies laying off folks who've been at the company for 20 years (see: Google) or companies laying off new hires, any loyalty seems to be one-sided.
A lot of this is sourced in the 2021-2022 job seekers market, when everybody and his brother could get a job. There were hiring sprees not because there was an obvious need for a/that particular level of skills and experience, but because there were a lot of companies thinking "if we don't get this guy/gal now, someone else, maybe even a competitor, may". I've witnessed it especially in the blockchain/web3/cryptoBS areas. I know of a company which had a target of min 25 hires/week, and kept that pace for three-four months. When I tried to insert a cost analysis process in their Infra organization, part of an operational model meant to get them to a more mature level than forever startup, I was told that "money was no object", so I should focus my advice in other areas. Of course I left them, soon thereafter, and now I see them in the news, alongside all others, letting people go. Oh, well...
Yep. Vest and move on.
The dominoes started falling with Elon laying off half the company without much problems. Copycat managers thought if Elon can lay off half the company, they can surely get away with 10% layoffs.
You’re giving him too much credit. Also there we large cuts at tech companies like Twilio, Coinbase and Snapchat etc in the summer.
From November, 2022
"Activist investor TCI Fund Management is calling on Google's parent Alphabet to pursue aggressive cost cutting on the back of a hiring spree during the pandemic, claiming the business could be more efficiently run."
- https://www.theregister.com/2022/11/16/tci_fund_google_cut_c...
I would assume Google was no the only one to receive such a letter, nor were TCI Fund Management the only investment fund sending out such letters
"Activist investor TCI Fund Management is calling on Google's parent Alphabet to pursue aggressive cost cutting on the back of a hiring spree during the pandemic, claiming the business could be more efficiently run."
- https://www.theregister.com/2022/11/16/tci_fund_google_cut_c...
I would assume Google was no the only one to receive such a letter, nor were TCI Fund Management the only investment fund sending out such letters
I think it's less blindly doing and more seeing your attractive friends dieting and becoming more self-conscious about your own weight.
I don't want to give reactionary CEOs too much credit, but I dont think it's fair to describe it as blind.
I don't want to give reactionary CEOs too much credit, but I dont think it's fair to describe it as blind.
Yeah, this CEO technology is interesting but ultimately going nowhere, it's only remixing existing decisions and not having any original innovations. Plus, as CEO decisions get fed back into the models, it's going to get even worse, like a photocopy of a photocopy.
I'm constantly amazed at how people fail to see that in B2B if your clients are downsizing, well, you should expect less money coming your way. Yes, there is a "follow on effect" as one should expect.
If Confluent was building out new product features and "investing in growth" hoping to sell those features to expand customer uptake, should they just blindly keep going?
Sure, there are probably some 20 something CEOs right now running startups that are like OMG I guess we should lay off too, but it's such a naive take.
CEOs can't just will the market to bear whatever their vision is, they have to "make something people want". And if there are less people to sell to, well, you're gonna make less money...
If Confluent was building out new product features and "investing in growth" hoping to sell those features to expand customer uptake, should they just blindly keep going?
Sure, there are probably some 20 something CEOs right now running startups that are like OMG I guess we should lay off too, but it's such a naive take.
CEOs can't just will the market to bear whatever their vision is, they have to "make something people want". And if there are less people to sell to, well, you're gonna make less money...
Absolutely.
The 4Q22 numbers are out. US GDP increased nearly 3%. The job market remains super tight for many classes of workers. There's simply no evidence of a broader recession.
Are there headwinds? Sure! Household debt is up, consumer spending is down as a consequence--but this is relative to a previous year when we were still feeling the effects of the COVID stimulus--and interest rates are up which will drive down debt-funded investment.
But, companies are cutting because 1) some got bloated during the COVID hiring surge and now need to cut back, 2) some always wanted to cut headcount but they didn't want to do it without air cover, and 3) some just follow the leader.
The 4Q22 numbers are out. US GDP increased nearly 3%. The job market remains super tight for many classes of workers. There's simply no evidence of a broader recession.
Are there headwinds? Sure! Household debt is up, consumer spending is down as a consequence--but this is relative to a previous year when we were still feeling the effects of the COVID stimulus--and interest rates are up which will drive down debt-funded investment.
But, companies are cutting because 1) some got bloated during the COVID hiring surge and now need to cut back, 2) some always wanted to cut headcount but they didn't want to do it without air cover, and 3) some just follow the leader.
I'm sure there is a "monkey see, monkey do" peer pressure aspect to the current wave of layoffs, but don't forget that hedge funds and activist investors have been actively lobbying for these job cuts: https://www.marketwatch.com/story/hedge-fund-billionaire-goo...
I disagree that CEOs aren't thinking for themselves. In many cases, they are thinking perfectly rationally. Companies don't live in a vacuum. If everyone else is raising salaries, it's to attract and retail talent. If you don't do the same, you will lose current employees and not attract new ones. If everyone else is doing layoffs, then it's a good time to do layoffs that perhaps you were considering anyway.
Say you've been wanting to close down an unproductive division and let go of low-performing employees in other divisions for a few years now. You sure as hell weren't going to do that in early 2022, when you'd risk a lot of other employees jumping ship at the first signs of cracks in the house. But in 2023, you can do layoffs and get away with it.
Say you've been wanting to close down an unproductive division and let go of low-performing employees in other divisions for a few years now. You sure as hell weren't going to do that in early 2022, when you'd risk a lot of other employees jumping ship at the first signs of cracks in the house. But in 2023, you can do layoffs and get away with it.
People where hiring because their valuations were large. All the organisations now had to grow into that valuation. Expansion and contraction of head count is a normal thing in an orgs life-cycle that reflects the economy. CEO's job is to think about the stakeholders first and then employees. There are not many levers to play with to adjust the net revenue, growth and valuations. Growth have become stagnant or even lower, revenues are impacted and valuations are down. Only lever that is in control is head count others are dictated by external forces.
PS. No one employee was complaining when these companies were in a hiring spree and could see it was not sustainable. Startup had a hard time competing with the salaries offered by these orgs.
PS. No one employee was complaining when these companies were in a hiring spree and could see it was not sustainable. Startup had a hard time competing with the salaries offered by these orgs.
Do you actually believe that CEOs are seeing other companies doing layoffs and sending off emails to someone saying hey we need to do layoffs too?
It seems much more likely to me that many companies over hired and/or have 2-4% of their staff they were planning on letting go anyway and now that so many other companies are doing layoffs it allowed them to cut other low performers without being the only company in the news.
We talk all the time about large company bloat. This just seems like normal annual pruning + a little extra from over hiring during covid + a chance to cut xyz projects that havent worked out or someone doesnt like or whatever without catching as much bad pr as they normally would.
It seems much more likely to me that many companies over hired and/or have 2-4% of their staff they were planning on letting go anyway and now that so many other companies are doing layoffs it allowed them to cut other low performers without being the only company in the news.
We talk all the time about large company bloat. This just seems like normal annual pruning + a little extra from over hiring during covid + a chance to cut xyz projects that havent worked out or someone doesnt like or whatever without catching as much bad pr as they normally would.
> sending off emails to someone saying hey we need to do layoffs too?
This is absolutely happening, and if not from the C Suite then from the board and other investors.
Yes, virtually all companies have plenty of bloat that can be trimmed, but trimming it a year ago would be a negative signal to investors. Now it's a positive signal, so layoffs are happening. They will continue to happen until companies are punished for it rather than being rewarded for it.
This is absolutely happening, and if not from the C Suite then from the board and other investors.
Yes, virtually all companies have plenty of bloat that can be trimmed, but trimming it a year ago would be a negative signal to investors. Now it's a positive signal, so layoffs are happening. They will continue to happen until companies are punished for it rather than being rewarded for it.
> Do you actually believe that CEOs are seeing other companies doing layoffs and sending off emails to someone saying hey we need to do layoffs too?
that would be illegal.
that would be illegal.
You likely have to go on a hiring spree and pay large bonuses to stay competitive when others are doing the same. Without the benefit of hindsight it was not obvious that the free money era would end so abruptly. Even the Fed did not expect to raise rates until 2023. It has been about the length of one finance professional's career since the Fed was last forced to hike into a growth slowdown, so few have experienced this environment.
Apple stands out as the contrarian that didn't panic hire. They will probably come out ahead at the end of all this as their reward.
Apple stands out as the contrarian that didn't panic hire. They will probably come out ahead at the end of all this as their reward.
There's a lot of performance in hiring and firing, even outside a supposed 'recession' CEO's are rewarded for 'cutting the fat' through firing via stock bumps because at the very least it's going to temporarily cut some costs in a very surface level analysis. Couple that with the constant recession talk that never seems to materialize and boards and shareholders are looking at companies thinking they need to trim down some for the recession that's seemingly been just around the bend for a whole year now.
If you think about it, CEOs are just people that are influenced by events like the rest of us. They are also a group that usually socialize with other CEOs and I have noticed this time the mantra of "preserve cash" has been a strong signal being shared in that group.
The thing is, in a lot of the cases, the companies preserving cash by laying off workers aren't really saving a significant amount of cash, compared to the amount they have on hand. So, it turns into some sort of lemming behavior.
The thing is, in a lot of the cases, the companies preserving cash by laying off workers aren't really saving a significant amount of cash, compared to the amount they have on hand. So, it turns into some sort of lemming behavior.
This is silly. If a business is sustainable there's no reason for layoffs. Simple math. If they rely on investment or loans and only have money to get down the runway but not takeoff without coming back to investors or banks, they aren't sustainable and will fail when the economy fails. The economy is currently failing big time. Expect a major culling of companies that rely on investment and growth because there's no speculative investment in growth for the foreseeable future.
I get why public companies like google, meta or even confluent is doing layoffs when the stock price falls 50-75%, the employees are unhappy and the shareholders are unhappy. Layoffs is a way to tell shareholders that the leadership is doing something to curb the costs and try to increase profit. But there are also pre-ipo private companies laying people off, that part I don't quite understand, since they have no shareholder pressure.
Those companies don't have public shareholder pressure but they do have investor pressure. The market downtown and cost of raising money changes investment calculus
Could be blind, but could also be that laying off when everyone else is laying off protects a company from being the odd one out and distributes the blame.
0) Macroeconomics is macro. Everything is connected.
1) we just came out of a very long period of "easy money" that inflated valuations and gave founders/boards a sense that money would always be there
2) when your customers are laying off / reducing spend, your revenues usually go down
3) the future is very uncertain
Take all of these things together and boards are asking teams to be as prudent as possible which unfortunately means, bringing costs down.
1) we just came out of a very long period of "easy money" that inflated valuations and gave founders/boards a sense that money would always be there
2) when your customers are laying off / reducing spend, your revenues usually go down
3) the future is very uncertain
Take all of these things together and boards are asking teams to be as prudent as possible which unfortunately means, bringing costs down.
Bunch of horse…excrements. You are trying to find logical explanation where there is none. My company laid off hundreds of people during corona while knowing the business will recover and receiving incredible amount of money. 5 months after the lay offs they bought bunch of companies and restarted hiring in different locations.
These companies dont know more than you and I. They are acting in panic and in a bad faith towards their employees.
These companies dont know more than you and I. They are acting in panic and in a bad faith towards their employees.
>I really get the feeling that many companies are just blindly doing whatever other companies do.
Alternatively, we are in a unique window where cutting underperforming projects whole-cloth can be done with almost no signaling risk (had this happened in 2021, people would assume the worst), so CEO's are cutting everything they don't like now, assuming they won't be able to do it as easily later.
Alternatively, we are in a unique window where cutting underperforming projects whole-cloth can be done with almost no signaling risk (had this happened in 2021, people would assume the worst), so CEO's are cutting everything they don't like now, assuming they won't be able to do it as easily later.
> I really get the feeling that many companies are just blindly doing whatever other companies do.
They’d all have had to collude in December for this to happen. Laying off people in large companies takes a sufficient amount of planning, and isn’t accomplished in days. They need to hire external consultants to help, even.
They’d all have had to collude in December for this to happen. Laying off people in large companies takes a sufficient amount of planning, and isn’t accomplished in days. They need to hire external consultants to help, even.
I would say a large part of it is that layoffs are terrible for PR, so many companies are jumping on the layoff bandwagon while it's "acceptable". Being one of 40 large companies doing mass layoffs is much better than being an isolated incident on the news curve at some other point.
Is there any chance that we're dealing with a form of confirmation bias? In an economy as large as the US's there will always be companies laying off workers. Current unemployment is low so I'm not sure if there's any major, new trend other than reporting it on HN.
I don't think so there's been a string of tech layoff's right here in a row totaling 40,000+ just from the ones at Amazon, Microsoft, Meta, and Google. These are companies that don't generally shed huge numbers of employees all at once.
Possible, but it could also be that they see / foresee / know that upcoming quarters are just down (in terms of revenue or whatever their respective KPIs are).
The reality however,could be somewhere in the middle as always, IMO.
The reality however,could be somewhere in the middle as always, IMO.
...I'm surprised this shit wasn't apparent to HN when everyone literally uses the same leetcode interview process despite the fact that it makes no fucking sense.
I really get the feeling that many companies are just blindly doing whatever other companies do.
You are correct. And for some reason they call themselves "leadership."
You are correct. And for some reason they call themselves "leadership."
> I really get the feeling that many companies are just blindly doing whatever other companies do.
You're not on your own with that idea. It's the blind leading the blind.
You're not on your own with that idea. It's the blind leading the blind.
Indeed.
- FAANG started to offer free drinks in the office? Every startup begins to do the same
- Agile coaches are hired at FAANG? Every damn startup needs their own Agile coaches as well
- "Think customer first" was coined by... and then every startup made it its core value
- Staff, Principal, VP engineer levels are introduced at FAANG... you know the drill
- Microservices...
Every tech company out there dies to be Google or Facebook or Apple. They will copy every single thing from them.
- FAANG started to offer free drinks in the office? Every startup begins to do the same
- Agile coaches are hired at FAANG? Every damn startup needs their own Agile coaches as well
- "Think customer first" was coined by... and then every startup made it its core value
- Staff, Principal, VP engineer levels are introduced at FAANG... you know the drill
- Microservices...
Every tech company out there dies to be Google or Facebook or Apple. They will copy every single thing from them.
I don't think this is the case at all. Companies are rethinking the future a bit and forecasting a downward trend more than initially thought. This means preserving cash and reducing burn. This has a trickle-down effect with other tech companies, as they will cut back on saas subscriptions.
A financial stampede
To be honest, most executives wish they could fire 10% of their staff. Once you get to even 30-40 people, 10% of your staff are almost inevitably dead weight. Unfortunately you can't mass cull without causing morale issues.
This period is just giving us a chance to shed those people without cultural ramifications.
This period is just giving us a chance to shed those people without cultural ramifications.
Reading these comments reminds me of how old (and jaded?) I am. We saw the same thing in previous recession-type environments (2000, 2008, etc).
Layoffs suck-they hurt everyone involved (except maybe for the shareholders?) and are a big big deal for each individual that it affects.
That being said, it doesn't take a genius to see that they are very useful from a company perspective. Given how difficult it is to fire underperformers, layoffs allow them to cut a huge swathe of underperformers (and, realistically, people they don't like) without opening themselves up to endless litigation. Yes, the justification can be as simple as "the economy looks like there is an economic downturn and see? the other companies in our industry are doing it too."
Smart companies treat it as a tool and use it sparingly, dumb companies over use it and kneecap themselves for the future.
Layoffs suck-they hurt everyone involved (except maybe for the shareholders?) and are a big big deal for each individual that it affects.
That being said, it doesn't take a genius to see that they are very useful from a company perspective. Given how difficult it is to fire underperformers, layoffs allow them to cut a huge swathe of underperformers (and, realistically, people they don't like) without opening themselves up to endless litigation. Yes, the justification can be as simple as "the economy looks like there is an economic downturn and see? the other companies in our industry are doing it too."
Smart companies treat it as a tool and use it sparingly, dumb companies over use it and kneecap themselves for the future.
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Oh my sweet summer child....
As someone who lived through the .COM crash and implosion and then 2008, any company with "strong cash reserves" and "trajectory to profitability" is not making more money than they are spending. They are, to use the SV term - losing runway. This is catastrophic because it's infeasible to raise money right now to extend the runway. If the plane is not airborne (making significantly more money than they are consuming) by the end of the runway, they crash and burn, taking themselves and the company's investors with them.
My experience has been highly capitalized, but running way in the red are the worst possible place to hide when a significant economic event occurs. Confluent has raised capital 11 times (from a quick crunchbase article) and has a product that is open source core, giving its customers an escape path.
I'd also point out that this is a bit snowflake. The average annual corporate turnover rate is way higher then this number. If not for the immediacy of the headwinds, almost every company could handle this by simply not rehiring after attrition.
As someone who lived through the .COM crash and implosion and then 2008, any company with "strong cash reserves" and "trajectory to profitability" is not making more money than they are spending. They are, to use the SV term - losing runway. This is catastrophic because it's infeasible to raise money right now to extend the runway. If the plane is not airborne (making significantly more money than they are consuming) by the end of the runway, they crash and burn, taking themselves and the company's investors with them.
My experience has been highly capitalized, but running way in the red are the worst possible place to hide when a significant economic event occurs. Confluent has raised capital 11 times (from a quick crunchbase article) and has a product that is open source core, giving its customers an escape path.
I'd also point out that this is a bit snowflake. The average annual corporate turnover rate is way higher then this number. If not for the immediacy of the headwinds, almost every company could handle this by simply not rehiring after attrition.
> almost every company could handle this by simply not rehiring after attrition
The problem is that there's a selection bias for attrition. It's possible that your worst employees are the ones who stick around the longest.
The problem is that there's a selection bias for attrition. It's possible that your worst employees are the ones who stick around the longest.
Absolutely valid - the equation shifts quote a lot during down markets, because top performers tend to fly to stability - and usually that is a incumbent situation.
> It's possible that your worst employees are the ones who stick around the longest.
That's another failure of management, rather than the line employees.
That's another failure of management, rather than the line employees.
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So I work for a company with "strong cash reserves" and "trajectory to profitability", and I was a child in 2008. We haven't done any layoffs yet, but it's definitely possible. Any advice for someone in my position with no recession experience?
Don't overly panic - keep your head down and do good work. At the same time, put off discretionary purchases and ensure that you have a few months of emergency liquidity setup if possible. (not always possible).
Keep a eye on linkedIn for connections who are hiring and make sure to stay connected.
Keep a eye on linkedIn for connections who are hiring and make sure to stay connected.
Study up for technical interviews. Do some real interviews for practice. Update your resume. Network. Build a larger emergency fund. Check your budget and plan through how you could lower your expenses if the hammer falls. Think through alternative income you could build.
This, but with one twist: "... plan through how you could lower your expenses if the hammer falls."
Don't just plan - implement that plan now. You won't be any worse off, and will be much better prepared if the hammer actually falls.
If the hammer does NOT fall, then the money you saved while in this mode is just a nice little problem to have - pay down other debt, save it, etc...
I went through the 2000 .com bust and learned this lesson in time for the 2008 slowdown. It really helped and also allowed me to trim some unwanted expenses long term.
Don't just plan - implement that plan now. You won't be any worse off, and will be much better prepared if the hammer actually falls.
If the hammer does NOT fall, then the money you saved while in this mode is just a nice little problem to have - pay down other debt, save it, etc...
I went through the 2000 .com bust and learned this lesson in time for the 2008 slowdown. It really helped and also allowed me to trim some unwanted expenses long term.
That’s fair advice, it’s just that it can be quite difficult for many people to keep their expenses cut to the bone. Many people don’t even know what they are spending. I think a first step is to understand your budget, maybe then make some easy cuts to start increasing your savings, and have a plan how you might cut to the bone quickly if you needed to.
For example, you might analyze your spending and realize that you’d save a lot of money by cutting daily Starbucks and avocado toast and that it’s trivial to make that at home. So you do that now to get some extra savings with no pain. You might also realize that moving back in with your parents is the single biggest thing you could do for your budget, but not a thing you would do unless you were laid off. But you could still have the conversation and be ready to pull that ripcord fast instead of waiting till you were out of money after a layoff.
For example, you might analyze your spending and realize that you’d save a lot of money by cutting daily Starbucks and avocado toast and that it’s trivial to make that at home. So you do that now to get some extra savings with no pain. You might also realize that moving back in with your parents is the single biggest thing you could do for your budget, but not a thing you would do unless you were laid off. But you could still have the conversation and be ready to pull that ripcord fast instead of waiting till you were out of money after a layoff.
I'd say lower your expenses now, regardless of layoff there's likely a strong buying opportunity in asset markets that could set them up for life.
You need an emergency fund and you need to cut expenses right away. I'd also practice interviewing. I have a leetcode routine I do. But keep in mind, interviewing is going to be hard with very good competition.
Sunday - Stack | Queue | Priority Queue (Heap)
Monday - String | Math
Tuesday - Tree | Dynamic Programming
Wednesday - BFS | DFS
Thursday - Graph
Friday - Linked List
Saturday - SabbathMaintain a broadly diversified portfolio. If you have money to invest, try to avoid tech, since it's highly correlated with your employment situation. Keep costs low and savings high.
Also most importantly don't read the news. I had just started working in 2008 and honestly didn't really pay attention to the recession and luckily it never affected me materially or mentally.
Also most importantly don't read the news. I had just started working in 2008 and honestly didn't really pay attention to the recession and luckily it never affected me materially or mentally.
have plenty of cash reserves. cash in a bank account, and low expenses are the way to weather these moments.
Always a good time to check in with old friends and coworkers who respect your work.
If things get bad be prepared to make significant changes, like moving to an area with more opportunity, etc.
If things get bad be prepared to make significant changes, like moving to an area with more opportunity, etc.
Interview.
So for another summer child - What would be an actually good thing for a company to be saying?
Ironically - two very different things:
a) We are managing the company very conservatively and are cutting travel/advertising and projects that are not making money and shifting them to projects that do, and not replacing people who leave unless the CEO or board approves (ie, the do less better strategy)
-or-
b) We are in trouble, so we are going to address this now by a sizeable layoff, but with generous layoff terms. We will also kill anything that doesn't have a clear trajectory to be sucessfull at runway length * 0.75.
Where you want to avoid is in a company that does sequential waves of 5-10% layoff. That means that that they didn't focus enough and are now past V1, without enough velocity to takeoff (https://en.wikipedia.org/wiki/V_speeds). That's when the company suddeny laysoff the vast majority of their workers with crappy layoff terms.
-or-
b) We are in trouble, so we are going to address this now by a sizeable layoff, but with generous layoff terms. We will also kill anything that doesn't have a clear trajectory to be sucessfull at runway length * 0.75.
Where you want to avoid is in a company that does sequential waves of 5-10% layoff. That means that that they didn't focus enough and are now past V1, without enough velocity to takeoff (https://en.wikipedia.org/wiki/V_speeds). That's when the company suddeny laysoff the vast majority of their workers with crappy layoff terms.
Profitability and low debt.
If you're making money and don't owe money, you can't go bankrupt.
Of course, profitable companies can become unprofitable, especially in a negative environment, so the more profitable it is, the safer it is.
The only thing that stops the timer on the bomb is taking in more money than you spend.
If you're making money and don't owe money, you can't go bankrupt.
Of course, profitable companies can become unprofitable, especially in a negative environment, so the more profitable it is, the safer it is.
The only thing that stops the timer on the bomb is taking in more money than you spend.
> Oh my sweet summer child
Someone watches GOT ;)
Someone watches GOT ;)
The real question is: does the CEO take full responsibility?
I mean, it’s a funny joke. But this attitude only upsets people who thought jobs were not transactional. Kind of reminds me of stories by people who paid for sex and found out the sex worker didn’t want to cuddle afterwards.
> But this attitude only upsets people who thought jobs were not transactional
It's entirely possible to believe your job is transactional while expecting accountability for all underperforming colleagues, at all levels. Rather than just the rank-and-file.
It's entirely possible to believe your job is transactional while expecting accountability for all underperforming colleagues, at all levels. Rather than just the rank-and-file.
This is why it is important to fire people who push regressions to production. Accountability is important!
Maybe? Depends on the severity of the regression, how much it cost, whether there was negligence or carelessness involved etc. And arguably you'd first fire the person who set up a process that allows regressions to be pushed to prod so easily.
Underperformance is not a single mistake. It's a pattern of behaviors that compound.
Underperformance is not a single mistake. It's a pattern of behaviors that compound.
Yep, we just had this happen with a newer staff member. When we contacted the primary maintainer of the regressed system, they replied “you need to overwrite XYZ binary/config files using the backup build from ABC machine after patching”… like how is this suitable for a prod scenario? We’d have been foolish to fire the new staff member who technically pushed the regression.
Sounds like a lack of accountability. Heads must roll.
A CEO looking at the economic climate of 2020-2021 and thinking they needed to hire to support the growth in demand for their products is not being negligent, they simply lacked the crystal ball that would have told them the Fed was going to slam the brakes on the economy last year. Even the Fed said they wouldn't be doing that. In light of what's happened, companies need to get leaner to survive.
Now if these CEOs don't manage to turn the ship around in the next couple years it probably is in fact time to look for a replacement.
Now if these CEOs don't manage to turn the ship around in the next couple years it probably is in fact time to look for a replacement.
What's the point in paying people tens or hundreds of millions of dollars if they make the same predictions and bad decisions as everyone else? And have exactly one contingency plan if things go sideways? Which is also everyone else's plan btw and not even a very good one. They hired in a seller's market for talent, and are now firing in a buyer's market.
You could hypothetically have a CEO that was good in a period of economic expansion but poor in a period of economic contraction. By the time you figure out you have one of these CEOs at the helm, it's probably too late to do much about it. And any replacement CEO you bring in is all the more likely to make drastic cuts to cost centers (headcount).
I mean it's not like the sex worker spends the entire session talking about how they're all in it together and they're a team and then at the end releases a public statement about how difficult the decision not to cuddle was for them.
Except the sex workers often literally offer the girlfriend experience, which is, arguably, exactly that, a "make believe" relationship for some agreed time.
Thank God they don't use the 'We're family" angle like companies do ... xD
NB: I'm just playing along for fun, never been involved in any way with sex work or sex workers.
NB: I'm just playing along for fun, never been involved in any way with sex work or sex workers.
The very idea of separating humanity from the system we live in will never sit right with me. Jobs are purely transactional on paper, sure, but in the end, we're not _just_ dealing with jobs, but people and their livelihoods. We're simply lucky enough to be in a field where saving up and building a financial security cushion is doable.
In practice, accountability only seems to go up so far. I shortly did consulting for a company that did large layoffs in early COVID days. The board played the "we take responsibility" card, cut in their own salaries, but scratch a little bit under the fresh coat of paint and most of the board's income isn't that mostly symbolic salary. The ones effectively paying the price were the file and rank, as usual.
In practice, accountability only seems to go up so far. I shortly did consulting for a company that did large layoffs in early COVID days. The board played the "we take responsibility" card, cut in their own salaries, but scratch a little bit under the fresh coat of paint and most of the board's income isn't that mostly symbolic salary. The ones effectively paying the price were the file and rank, as usual.
what about accountability to the people who took a risk investing in the company?
maybe the CEO didn't predict the future however many months or years ago to get to a point where no layoffs would've been necessary, but maybe this would've been at the cost of less growth, possibly having worse consequences
the idea of "humanity" is completely opaque, it's not that hard to look at the reality instead
maybe the CEO didn't predict the future however many months or years ago to get to a point where no layoffs would've been necessary, but maybe this would've been at the cost of less growth, possibly having worse consequences
the idea of "humanity" is completely opaque, it's not that hard to look at the reality instead
"The reality" is jobs = people. We don't live in a vacuum. It's seriously not that hard either. Between the hundreds of thousands of regular people losing their livelihoods and some investors losing money ("don't invest what you can't afford to lose" something something), doesn't sound too complicated for me.
Humanity is not opaque unless you make it so, like this particular system does. It's just people.
Humanity is not opaque unless you make it so, like this particular system does. It's just people.
if you don't have money to pay employees then they're out of a job, and if you don't grow you don't get investors and don't hire people
please explain how "humanity" solves this
please explain how "humanity" solves this
Humanity solves this by having an entrepreneur that just wants to have a business up & running in a sustainable, bootstrapped way, that will give jobs to X people earning Y in salary, while the founder in the long run will earn 5-7Y salary. Instead of having founders that want to be billionaires with VC money in a 5 years time-frame. There is still risk, and a business might fail and jobs be lost, but the scale is different.
Therefore coming back to my initial comment: the very system we live in is based on this conception that we have to forego treating people like humans and have to consider them as mere "resources" just to make it work. Not pretending like I have a solution in the current context. It just will never sit right with me, that's all.
It’s called “Japan”. Low performers are kept in corporations to do nothing all day while many of their peers work themselves to death.
Are you implying 100000+ people getting laid off in a handful of months merely is about weeding off "underperformers"?
> It's seriously not that hard either.
Hah. Suggesting an unworkable solution is of course trivial, never mind the centuries of debate of all the shades of economic systems like cutthroat capitalism, democratic socialism, dictatorship of the proletariat and everything in between.
I mean, this is like saying Robin Hood was a serious philosopher of social economics instead of a folktale, and "robbing the rich to feed the poor" is a legit strategy that can and should be implemented under the current capitalist system.
And somehow you'd think I was the arrogant one around here for saying there's a lot we don't understand (especially about humanity, i.e. ourselves!).
Hah. Suggesting an unworkable solution is of course trivial, never mind the centuries of debate of all the shades of economic systems like cutthroat capitalism, democratic socialism, dictatorship of the proletariat and everything in between.
I mean, this is like saying Robin Hood was a serious philosopher of social economics instead of a folktale, and "robbing the rich to feed the poor" is a legit strategy that can and should be implemented under the current capitalist system.
And somehow you'd think I was the arrogant one around here for saying there's a lot we don't understand (especially about humanity, i.e. ourselves!).
I didn't suggest a solution. I literally just said "humanity" is people, and our system treating people like numbers on a spreadsheet will never sit right with me.
The rest is you going on a tangent.
The rest is you going on a tangent.
I think it could be a bit easier to think of things this way if there were a stronger social safety net, especially in the USA.
Also I think the scale of the company you work at has an impact on this. The larger the company, the less personal treatment I would expect.
Also I think the scale of the company you work at has an impact on this. The larger the company, the less personal treatment I would expect.
[deleted]
The problem isn't that CEOs don't get punished. The problem is when they virtue signal with "I'm sowwy " and claim responsibility without accepting accountability.
That's the defined procedure though, without that, you draw more attention. There is a clearly defined playbook at this point, and it WORKS, so why go making up your own words when they just wanna hear the song?
Someone could have an entirely transactional understanding of their job but assume that - alongside many implicit elements of that transaction - there's a component of through-line longevity.
> The responsibility for that falls squarely on me [Jay].
https://www.marketscreener.com/quote/stock/CONFLUENT-INC-124...
https://www.marketscreener.com/quote/stock/CONFLUENT-INC-124...
Responsibility without consequences is meaningless.
I expected the "we're sorry" clip from South Park.
The CEO take full credit for the layoffs, that is what they mean when they say they take full responsibility. In the eyes of those who matter to the CEO the layoff is a good thing, who would want that credit to trickle down the ranks to the middle managers?
Too bad full doesn't include financial.
Some of these “fully responsible” CEOs are going to end up triggering bonuses based on performance at the end of this year. The lip service is strong but the reality is disconnected from these layoffs’ messaging.
A company I consult for is decidedly guilty of this. Not one month ago it was blue skys and calm waters. This week? “Full responsibility.”
Did they get their end of 2022 bonuses? Absolutely. I fail to see how the first two weeks of 2023 could be so different from the last two of 2022. That’s because they had this in the planning stage for a while.
A company I consult for is decidedly guilty of this. Not one month ago it was blue skys and calm waters. This week? “Full responsibility.”
Did they get their end of 2022 bonuses? Absolutely. I fail to see how the first two weeks of 2023 could be so different from the last two of 2022. That’s because they had this in the planning stage for a while.
I don’t get this mentality. From a meta level, Confluent isn’t profitable. In this environment, what would you have Confluent to do?
The second point, a job is always transactional, you exchange labor for money and at any given time, either party can stop that transaction
Also, if you are a tech person in any major city in the US, you are more than likely making at least twice the median wage in that city. If others can survive making half of what you’re making, you should be able to save enough to weather a brief storm.
Of course I understand things are different if you are here on H1B.
The second point, a job is always transactional, you exchange labor for money and at any given time, either party can stop that transaction
Also, if you are a tech person in any major city in the US, you are more than likely making at least twice the median wage in that city. If others can survive making half of what you’re making, you should be able to save enough to weather a brief storm.
Of course I understand things are different if you are here on H1B.
Based on the people I know who work at Confluent, the messaging at all hands meetings has been that the market conditions didn't affect staffing plans. Employees make decisions based on the expectation of ongoing employment - if the CEO keeps says "we won't do layoffs" and then you buy a house and get laid off, that seems like detrimental reliance.
It's also worth noting many places enshrine in law protections for layoffs because of the power imbalance between employees and employers.
It's also worth noting many places enshrine in law protections for layoffs because of the power imbalance between employees and employers.
> Employees make decisions based on the expectation of ongoing employment
Then again outside of visa holders they are naive.
I’ve been working professionally for 25+ years and there isn’t a day after my first year after I built up savings that I depended on my employer instead of my employability to support my addiction to food and shelter.
In the case of Confluent, who depends on a non profitable company to be a sustainable place of unemployment? You go in knowing that any given day that you are going to be laid off and save accordingly.
And no when I graduated from college I wasn’t making an above average salary. I started out making $30K and found the cheapest apartment I could until I saved money.
Then again outside of visa holders they are naive.
I’ve been working professionally for 25+ years and there isn’t a day after my first year after I built up savings that I depended on my employer instead of my employability to support my addiction to food and shelter.
In the case of Confluent, who depends on a non profitable company to be a sustainable place of unemployment? You go in knowing that any given day that you are going to be laid off and save accordingly.
And no when I graduated from college I wasn’t making an above average salary. I started out making $30K and found the cheapest apartment I could until I saved money.
One should never assume anything about his employment status other than that it can end at any moment. Companies’ management might have empathy, but as a rule they absolutely don’t care about employees.
Empathy for those laid off shouldn't vary based on visa status. These are real people losing their jobs, searching for another job in an already saturated market.
I completely disagree. Not all job losses are the same, and visa status makes an enormous difference in the consequences of losing one's job.
I've been laid off. At the time, I had plenty of savings and nobody depending on me besides my dog. I took some time off and was later able to find a new job. The company didn't have any H-1Bs at the time, but if it did they certainly would've been in a much worse situation than I was and clearly more deserving of empathy.
I've been laid off. At the time, I had plenty of savings and nobody depending on me besides my dog. I took some time off and was later able to find a new job. The company didn't have any H-1Bs at the time, but if it did they certainly would've been in a much worse situation than I was and clearly more deserving of empathy.
I feel that the original post rubbed me the wrong way. The whole "others have it worse, so toughen up" doesn't serve to help anyone.
When I was laid off, I had four months worth of savings and could have scraped by longer. No matter how much money that my coworkers had that are here on H1B, they had to find a job no matter what.
Did you feel any empathy when the Disney CEO was fired with a multi million dollar severance package? Things are different for different people.
Did you feel any empathy when the Disney CEO was fired with a multi million dollar severance package? Things are different for different people.
I don't think they meant different empathy, just visa holders have fewer options around getting a new job
As long as CXO takes real responsibility by cutting their salary to a significant percentage and refusing stock refreshers (or whatever called) I'm fine. By saying "I take full responsibility" but still maintains the original pay is not convincing. Since tech CXOs usually take very large stock and cash compensations (well into multi-millions), just imagine how much cost can be saved by cutting all CXO compensation by 50%.
The company can also initiate a vote of all employees to remove this cut of CXO compensations, so that if CXO is really doing well overall I'm sure he will be recognized and his compensation defended by the whole company.
The company can also initiate a vote of all employees to remove this cut of CXO compensations, so that if CXO is really doing well overall I'm sure he will be recognized and his compensation defended by the whole company.
I make a mistake, I get fired.
CEO makes a mistake, I get laid off. CEO takes full responsibility.
CEO makes a mistake, I get laid off. CEO takes full responsibility.
Layoffs don't prove the CEO made a mistake. Understaffing and overstaffing are both errors. A small layoff when the SHTF shows they at least didn't understaff. If you're a growing startup in ZIRP, understaffing is arguably a bigger error than overstaffing, up to a point.
I have no idea if Confluent overstaffed. I admit I'm surprised to hear they aren't profitable though.
I have no idea if Confluent overstaffed. I admit I'm surprised to hear they aren't profitable though.
> Layoffs don't prove the CEO made a mistake
That is irrelevant, since they are taking full responsibility anyway, right?
Just kidding.
That is irrelevant, since they are taking full responsibility anyway, right?
Just kidding.
And complaining about life not being “fair” is a waste of my energy.
> The second point, a job is always transactional
Precisely. Corporations made jobs always transactional. Now the employees and the public are making corporations transactional by affording them no sympathy or loyalty whatsoever.
Precisely. Corporations made jobs always transactional. Now the employees and the public are making corporations transactional by affording them no sympathy or loyalty whatsoever.
Responsibility would mean cutting executive compensation. If the executives are choosing to inflict suffering on anyone but themselves, that's not responsibility, that's crocodile tears.
should be able to save enough to weather a brief storm is a huge assumption. What do you do if you have dependents or complex medical needs personally? What happens if you have a personal emergency during your job search? What do you do if you have existing debt from a previous emergency, medical crisis, etc?
> What do you do if you have dependents or complex medical needs personally
You get COBRA through your former employer. Been there done that. I had a pre-existing condition that I couldn’t get health insurance individually (pre-ACA)
> What happens if you have a personal emergency during your job search? What do you do if you have existing debt from a previous emergency, medical crisis, etc?
You talk to the people and make arrangements or you just don’t pay them until you can afford to. Your priority becomes house, food, shelter, car.
How do you think people making much less than tech workers handle it?
You get COBRA through your former employer. Been there done that. I had a pre-existing condition that I couldn’t get health insurance individually (pre-ACA)
> What happens if you have a personal emergency during your job search? What do you do if you have existing debt from a previous emergency, medical crisis, etc?
You talk to the people and make arrangements or you just don’t pay them until you can afford to. Your priority becomes house, food, shelter, car.
How do you think people making much less than tech workers handle it?
> How do you think people making much less than tech workers handle it?
They don't. That doesn't make being laid off not worth sympathy, though! You don't know someone's personal life circumstances. It's not helpful to just presume they'll be okay and therefore it isn't worth advocating for better treatment.
They don't. That doesn't make being laid off not worth sympathy, though! You don't know someone's personal life circumstances. It's not helpful to just presume they'll be okay and therefore it isn't worth advocating for better treatment.
While what you describe are serious problems and would be very anxiety inducing for many (most?), the truth remains that it isn't someone else's problem or responsibility.
I'm not ascribing anything but to say that people who are laid off deserve sympathy because you cannot assume their personal circumstances surrounding the layoff. I have no dependents so it doesn't matter to me. My friend's wife is only able to work because of his healthcare, and if she loses his healthcare even if he finds a new job quickly his new health insurance will force the wife into a nightmare of proving she's sick enough to get her medicine again, putting her out of work.
That’s very very unfortunate and warrants sympathy for sure. At the same time, one’s employer isn’t the one responsible for securing your financial stability or future.
If employees were being encouraged to jump ship every 3-6 months for a pay raise during the pandemic, why should companies show any loyalty to them either?
If employees can jump for a significant pay raise en-mass, the companies weren’t showing loyalty to begin with.
The CEO's job (responsibility) is not to give people jobs, but to steer a company for success on behalf of the owners.
If your comment ("CEO takes full responsibility") is suggesting s/he should be fired or compensation reduced because of their misread of the future, that would be quite silly.
Companies don't fire people for making mistakes (in fact if you make no mistakes you probably should be let go because you're not pushing the boundaries enough or taking sufficient risk). Reducing comp as punishment would also not make sense, for obvious reasons.
If your comment ("CEO takes full responsibility") is suggesting s/he should be fired or compensation reduced because of their misread of the future, that would be quite silly.
Companies don't fire people for making mistakes (in fact if you make no mistakes you probably should be let go because you're not pushing the boundaries enough or taking sufficient risk). Reducing comp as punishment would also not make sense, for obvious reasons.
"Reducing comp as punishment would also not make sense, for obvious reasons."
If leadership is financially incentivized for positive outcomes, why shouldn't they carry downside financial risk as well?
If leadership is financially incentivized for positive outcomes, why shouldn't they carry downside financial risk as well?
If a leader makes poor decision after another, they will be penalized by the board (either in job prospects, having this job, or compensation).
Ultimately, the comp for the CEO is set by the board and that is determined by supply/demand (which inputes performance of the CEO). Penalizing someone for one mistake in anticipating the future would make a company so risk averse that returns would be very low - not a good outcome for the owners.
Ultimately, the comp for the CEO is set by the board and that is determined by supply/demand (which inputes performance of the CEO). Penalizing someone for one mistake in anticipating the future would make a company so risk averse that returns would be very low - not a good outcome for the owners.
If that leader is a founder of a company with a dual-class stock, they won't
In that case, there's a natural incentive for the leader to do things that make the business successful long-term. It is in their best interest.
leadership's financial incentive is basically stocks which does carry the downside of losing value when the stock price goes down. The problem for us normals is that leadership gets paid life changing amounts of money every year, so losing a couple of millions is not that big of a deal.
I think you should get your sarcasm detector checked. He was referring to the recent surge of empty CEO statements built around the "full responsibility" cliche.
Sure, but when you look at the history of comments around this theme (CEO, layoffs), it seems pretty clear that people want a CEO to take responsibility in some other way that laying off staff.
I can't speak for everyone else but a lot of what I've seen is mockery of a meaningless statement that would have been better left unsaid.
Perhaps, but scanning the conversation thread here again, I see most people wanting to punish the CEO for steering the ship for a new reality in a way that includes layoffs.
You have a pretty one-dimensional view of a company's goal. Well, many have, especially the higher-ups in the US, of course, making those vision statements more of a joke than they ever were. But for some, companies have a responsibility towards their employees, customers and environment as well.
In your hyper-financialized viewpoint, the CEO's job should be to make as much money for him/herself as possible.
In your hyper-financialized viewpoint, the CEO's job should be to make as much money for him/herself as possible.
> In your hyper-financialized viewpoint, the CEO's job should be to make as much money for him/herself as possible.
No, the CEO is meant to optimize not for themselves, but for the owners of the company. If the CEO didn't do that, the board should fire them.
No, the CEO is meant to optimize not for themselves, but for the owners of the company. If the CEO didn't do that, the board should fire them.
But what if the board are optimizing for themselves as well?
Then the board is breaking their fiduciary duty and the shareholders will sue them into oblivion.
How would you prove it? "We thought that these stock buybacks we put on the company credit card were for the good of the shareholders long term, it's a coinsidance that it happened to increase our compensation as well, sorry it didn't work out as we thought."
If you're curious to learn more then instead of debating in the abstract, it is worth learning more about:
a) how board members are compensated
b) what type of people are appointed to boards
A good start is https://www.investopedia.com/articles/wealth-management/0404...
a) how board members are compensated
b) what type of people are appointed to boards
A good start is https://www.investopedia.com/articles/wealth-management/0404...
> If your comment ("CEO takes full responsibility") is suggesting s/he should be fired or compensation reduced because of their misread of the future, that would be quite silly.
If he suffers no negative consequences then in what way is he taking responsibility? This is just meaningless psychobabble. He could not say it and it would be no different.
If he suffers no negative consequences then in what way is he taking responsibility? This is just meaningless psychobabble. He could not say it and it would be no different.
It's a reference to the Google CEO's statement about their layoffs and I think the point is that it's an empty platitude.
Only an empty platitude if one interprets it as meant for those laid off.
But if you think about it as a message to remaining employees, the board, and to shareholders, it isn't an empty platitude at all.
Perhaps but even then it's still pointless. Over-hiring was a strategy to take advantage of easy money and layoffs are a strategy to clean it up when the well runs dry. The very act of laying people off indicates that you are taking responsibility for changing direction.
That said, when someone says they're taking full responsibility there's an implication that they're going to take on pain or consequences. I don't say I'm taking full responsibility for washing my car when it gets dirty. Not saying he should be fired or take a pay cut, just that he said something dumb and did a terrible job of reading the room.
That said, when someone says they're taking full responsibility there's an implication that they're going to take on pain or consequences. I don't say I'm taking full responsibility for washing my car when it gets dirty. Not saying he should be fired or take a pay cut, just that he said something dumb and did a terrible job of reading the room.
[deleted]
Lol! Questions that need answers . . .
Reminds me of https://ourincrediblejourney.tumblr.com/ : the cliche is that "our incredible journey" means "we are being bought out and our product will be deleted"
> The findings of two decades of profitability studies are equivocal: The majority of firms that conduct layoffs do not see improved profitability, whether measured by return on assets, return on equity, or return on sales. Layoffs are especially hard on the performance of companies with a high reliance on R&D, low capital intensity, and high growth. Market response to layoffs was also less positive than might be expected, with three-day share prices of firms conducting layoffs generally neutral. ... Layoffs undertaken only for the purpose of reducing costs tended to lead to drops in share price.
https://hbr.org/2022/12/what-companies-still-get-wrong-about...
We need to circulate this information as wide and far as possible. Perhaps at least some well meaning CEOs will grow a backbone to at least challenge the board.
https://hbr.org/2022/12/what-companies-still-get-wrong-about...
We need to circulate this information as wide and far as possible. Perhaps at least some well meaning CEOs will grow a backbone to at least challenge the board.
The problem with this article is that it targets companies that are stable revenue-wise and have low capital intensity. Neither of these statements are true about startup companies unless the startup is managed very conservatively.
That essentially rules out any VC-related startup. VC's basically are a huge force-multiplier during up markets and black holes in recessionary periods due to the growth expectations (and the willingness to blank-check funding until the revenue goals are met).
That essentially rules out any VC-related startup. VC's basically are a huge force-multiplier during up markets and black holes in recessionary periods due to the growth expectations (and the willingness to blank-check funding until the revenue goals are met).
> Layoffs are especially hard on the performance of companies with a high reliance on R&D, low capital intensity, and high growth.
Start ups are 2 out of 3.
The thesis is that with layoffs the outcome is worse than without. So we can make all kinds of rhetorical debates, but the data seems to suggest for some causal reason companies that do layoff do worse off in the subsequent years.
Start ups are 2 out of 3.
The thesis is that with layoffs the outcome is worse than without. So we can make all kinds of rhetorical debates, but the data seems to suggest for some causal reason companies that do layoff do worse off in the subsequent years.
Startups don't survive to later years in limited runways circumstances unless they decrease their spend. There is a survivorship bias point of view - but the critical point is that startups are not low capital intensity.
> There is a survivorship bias point of view
I'm uncertain if the data has a survivorship bias or not (did not review the actual academic papers). Your and I's conjecture needn't assume it.
None the less we're not talking about seed/Series A companies here. We're talking about late stage and large publics w/ 100s Millions to Billions of cash.
I'm uncertain if the data has a survivorship bias or not (did not review the actual academic papers). Your and I's conjecture needn't assume it.
None the less we're not talking about seed/Series A companies here. We're talking about late stage and large publics w/ 100s Millions to Billions of cash.
This sets off my BS detector. If true, there is a bigger underlying problem
Layoffs signal weakness, from every angle. They hired indiscriminately and now are doing catch and release. Or they lacked foresight of their market. Or they are financially mismanaged. Or they are directed by a unqualified board. Or they are unable to cope with their market shrinking. Or they are a behemoth that grinds up workers as part of their operation (a lot of what we're seeing now). Or they're jumping off the cliff with the other lemmings. Or they need money for upper management pay.
When you're looking for a job, keep the companies previous layoffs in mind. Are they stable, or do they acquire and jettison?
When you're looking for a job, keep the companies previous layoffs in mind. Are they stable, or do they acquire and jettison?
So many companies just lit all their "social capital" on fire, especially Google. They have maintained the "don't be evil" mantra for so many years but who will ever believe that lie ever again?
Based on goomics [1], I think the social capital has been rotting or at best fragile, for a while [2] [3].
Alas, money-printing machines emit strong reality-distortion fields. As long as it's working, they'll have no issue finding people to hire.
[1]: https://goomics.net
[2]: https://goomics.net/240/, 2018Q1
[3]: https://goomics.net/155/ 2012Q
Alas, money-printing machines emit strong reality-distortion fields. As long as it's working, they'll have no issue finding people to hire.
[1]: https://goomics.net
[2]: https://goomics.net/240/, 2018Q1
[3]: https://goomics.net/155/ 2012Q
Interesting, earlier today an post was made about confluent cli going "open source" and now they're doing massive layoffs.
Was this an "open-source folks will do it for free anyhow" or someone wanting to save their work from obsolence?
(Earlier flagged post) https://news.ycombinator.com/item?id=34527670
Was this an "open-source folks will do it for free anyhow" or someone wanting to save their work from obsolence?
(Earlier flagged post) https://news.ycombinator.com/item?id=34527670
>Was this an "open-source folks will do it for free anyhow"
I doubt it. Open-sourcing anything is a lot of work. Managing open-source projects is a lot of work. There are no guarantees that that project will even get any external development traction or mindshare, and if this is still an important component to you, you'll be paying developers to build it out anyway.
I doubt it. Open-sourcing anything is a lot of work. Managing open-source projects is a lot of work. There are no guarantees that that project will even get any external development traction or mindshare, and if this is still an important component to you, you'll be paying developers to build it out anyway.
It is a little odd that they pulled the announcement page. But the repo is still available so who knows. Maybe they thought it would be poorly received by other employees after the layoffs? Seems like a stretch.
The post got pulled because it was wrong, see https://www.reddit.com/r/programming/comments/10lonsi/commen...
It was pulled because they used the term "open source", and the Confluent Community License, while being source-available and allows modifications prevents use of the code in a SaaS environment. So kinda not totally open. But it's just the confluent cli - it's not like someone's gonna base their SaaS around it, should just be BSDed or something.
I don't really understand the intensity of folks that insist on open source meaning something very narrow and specific but different strokes. To me something is open source if I can use it and since I have no intention of ever competing with any of these companies in the SaaS space I don't really care that my rights are limited because they effectively aren't.
This is going to sound stupid because I didn't put any real thought into it but: shouldn't open source advocates also be against calling the GPL open source? It doesn't just constrain what you are permitted to do it also obligates you to take certain actions. I like the GPL personally and it's obviously different from these anti-SaaS licenses but isn't all of this really about freedom?
This is going to sound stupid because I didn't put any real thought into it but: shouldn't open source advocates also be against calling the GPL open source? It doesn't just constrain what you are permitted to do it also obligates you to take certain actions. I like the GPL personally and it's obviously different from these anti-SaaS licenses but isn't all of this really about freedom?
>I don't really understand the intensity of folks that insist on open source meaning something very narrow and specific but different strokes.
Words have defined meanings and are important for conveying information and communicating. If you just make up definitions to commonly understood terms, it leads to confusion.
>To me something is open source if ...
So you took a precisely defined phrase[1] that many people put a lot of thought and negotiation into (working with various stakeholders), has been in wide use for decades by thousands of companies and organizations, and hundreds of thousands (or millions) of developers, threw that definition out, and created your own definition because of reasons - how does help anything?
>This is going to sound stupid because I didn't put any real thought into it
Hmmm.
[1] https://opensource.org/osd
Words have defined meanings and are important for conveying information and communicating. If you just make up definitions to commonly understood terms, it leads to confusion.
>To me something is open source if ...
So you took a precisely defined phrase[1] that many people put a lot of thought and negotiation into (working with various stakeholders), has been in wide use for decades by thousands of companies and organizations, and hundreds of thousands (or millions) of developers, threw that definition out, and created your own definition because of reasons - how does help anything?
>This is going to sound stupid because I didn't put any real thought into it
Hmmm.
[1] https://opensource.org/osd
We're well into the cargo cult layoffs. CEOs need to look good to their bosses and your job is a sacrafice they are willing to make. I'm sure there are some who will make their decisions based on real data and analysis - but they'll make thier decisions independently of other firms actions. Seeing all this clustered behavior suggests little analysis is really being done here.
Especially given the strong economic numbers that just came out, yeah I don't buy the "bad macro climate" argument anymore. It's really plain as day: these CEOs make some cuts of 5-15%, their stock price goes up. This is a pattern we'll likely continue to see through this year.
Honestly, the tech industry was due for some churn from an employer perspective, and all this talent circulating is going to up the competition for company's products.
Honestly, the tech industry was due for some churn from an employer perspective, and all this talent circulating is going to up the competition for company's products.
> Especially given the strong economic numbers that just came out, yeah I don't buy the "bad macro climate" argument anymore.
The US Federal Reserve literally says they are committed to bringing the US to a recession to curb inflation (if it is what it takes to do so). So while strong economic numbers are a "good thing", it just means the current numbers will keep getting worse until it's a recession. (Or the Fed will change course. Who knows.)
The US Federal Reserve literally says they are committed to bringing the US to a recession to curb inflation (if it is what it takes to do so). So while strong economic numbers are a "good thing", it just means the current numbers will keep getting worse until it's a recession. (Or the Fed will change course. Who knows.)
You should see people working in the financial industry right now. While there's one segment that's bearish and believes that the Fed will have to engineer a short recession to bring inflation under control, there's another, larger, stronger camp that believes we're in the end times for capitalism, and the endgame is to make money so cheap that everyone is paper rich.
There's an increasing atmosphere of bacchanalia in the markets - buy every dip, long every thing because they don't believe that the money can be unprinted and inflation thwarted. Might as well pump it up and make some money and hopefully, swing into some meaningful assets before it all comes crashing down.
Personally, I believe American capitalism is in the ICU right now. There's too much money in the system, and there's too much concern over the long-term viability of the USD as the reserve currency. All that money printing coupled with the war in Ukraine, American sanctions, and increasing refusal of the non-Nato countries to play ball with America (espcially China) means that the demand for all the USD printed is never going to be the same.
It's going to get very, very interesting in the coming couple of years.
There's an increasing atmosphere of bacchanalia in the markets - buy every dip, long every thing because they don't believe that the money can be unprinted and inflation thwarted. Might as well pump it up and make some money and hopefully, swing into some meaningful assets before it all comes crashing down.
Personally, I believe American capitalism is in the ICU right now. There's too much money in the system, and there's too much concern over the long-term viability of the USD as the reserve currency. All that money printing coupled with the war in Ukraine, American sanctions, and increasing refusal of the non-Nato countries to play ball with America (espcially China) means that the demand for all the USD printed is never going to be the same.
It's going to get very, very interesting in the coming couple of years.
Not surprising. Every company is going to take the opportunity to trim costs when it doesn't affect their PR as much as it would any other time.
And not doing so could affect their IR (investor relations) negatively, which is a higher concern than PR to most companies
Why can't a company do offense on the IR front with literally any action other than cutting workforce?
"Our products are better than ever" "Our revenue per employee is better than ever"
Why does cutting costs have to be the only way to please investors?
"Our products are better than ever" "Our revenue per employee is better than ever"
Why does cutting costs have to be the only way to please investors?
Because most investors are investing in more than one company. If someone has a stake in Google, Microsoft, and Confluent, and their ROI for the first two are great this quarter, but Confluent is lukewarm or even in the red, they're going to want an explanation.
They can be told that products are great, or employees are producing a lot, but the only thing that matters to investors is the money. And so, when you're underperforming compared to others in your market, you have to do what appeases the shareholders, and that involves culling employees.
They can be told that products are great, or employees are producing a lot, but the only thing that matters to investors is the money. And so, when you're underperforming compared to others in your market, you have to do what appeases the shareholders, and that involves culling employees.
This needs to be a video game, not the way we organize humanity :(
I have no unique insight into their perspective but if I had to guess they're starting to worry about the lack of easy money and want a signal that management is going to play it safe with their current cash reserves instead of banking on another infusion. They probably could, you know, tell them as much, but sacrificing your employees really adds oomph to your commitment.
Every company that mishired.
You don't cut costs if they aren't costs.
If you hired employees to do something and they're making you money hand over fist, you don't fire them. They're not an expense. They're a profit center.
You don't cut costs if they aren't costs.
If you hired employees to do something and they're making you money hand over fist, you don't fire them. They're not an expense. They're a profit center.
There's an article about it https://www.marketscreener.com/quote/stock/CONFLUENT-INC-124...
The optimistic things management says about a company are as empty as a paupers purse. Theyll tell you there are no layoffs planned the moment before they sign your severance package.
DAE feel it all started with Elon laying off half the company without destroying Twitter completely? These other managers must have thought if Elon can lay off half the company , we can atleast do away with like 10% without much negative consequences? Time will tell if such hire and fire will cause unintended consquences. Software as a whole is quite resilient though, you don't need much resources to maintain code once it's written, creating new features is where skilled individuals are needed. So companies will definitely survive even if they lay off half the company, but the question is will they thrive when opportunity comes knocking again?
I don't think any credible person predict twitter would fall over immediately. The only prediction I've seen was for April [1] and there's still 4 months and in the meantime Elon has talked about replacing himself as CEO, ad spend has cratered, and iirc Twitter wasn't profitable when it was bought nevermind with an additional 1B/yr interest payment.
[1]: https://www.technologyreview.com/2022/11/08/1062886/heres-ho...
[1]: https://www.technologyreview.com/2022/11/08/1062886/heres-ho...
No.
If anyone reading this was part of the affected, please DM me. I have an SRE type role open that would almost certainly be a good fit for anyone from eng. Totally remote, good company culture.
Layoffs are like a freebie right now. Everybody is doing it so might as well right? Sad state of affairs.
General rule is that a 10% cut won’t impact business operations. They’ll do cuts like this periodically to get rid of low performers and / or people getting paid too much.
Goal is to cut costs, projections are likely decreasing / stagnant revenue.
Goal is to cut costs, projections are likely decreasing / stagnant revenue.
Granted, tech companies generally do not have unions.
Companies with union agreements, have not been laying off people.
I think it's silly when companies present the nonsensical rationale of "due to prevailing economic conditions" without qualification. As if these conditions (everyone else is doing it for some reason, so let's ride the stock boost) is obvious, decided, and not worth talking about.
I think it's silly when companies present the nonsensical rationale of "due to prevailing economic conditions" without qualification. As if these conditions (everyone else is doing it for some reason, so let's ride the stock boost) is obvious, decided, and not worth talking about.
The CEOs know their macro. I think it's all political. Employment is the last bastion holding this cycle. Low unemployment means the Fed won't pivot. A fed that doesn't pivot is a fed that's in tampering mode which is a money tight environment.
I think it's gotten to be a game of macro economic manipulation to get to fed to flood the market with lush money again.
I think it's gotten to be a game of macro economic manipulation to get to fed to flood the market with lush money again.
Has anyone at an unprofitable company ever been told that they "were NOT on a trajectory to profitability"???
I feel like that the statement that you are on a path to breakeven, means absolutely nothing. And that you should ALWAYS consider yourself to be in a high risk situation if your company is losing money.
I feel like that the statement that you are on a path to breakeven, means absolutely nothing. And that you should ALWAYS consider yourself to be in a high risk situation if your company is losing money.
I don't know how common it is to specifically deny it, but plenty of early stage startups consider themselves to be in a "growth stage" where it doesn't make sense to talk about the path to profitability.
The whole point of the Fed putting rates up was to cause mass unemployment so workers had no leverage so they'd accept lower wages and more money would go to capital holders. You can't blame CEOs for getting "ahead" on their Todo list...
I think it's all about cashflow. Salaries are the biggest cost to cashflow and 2023 is not going to be all roses, there will be more bad news at some point. A shrewd business reduces operating costs before the storm hits.
I am actually pondering on accepting an offer from Confluent. It's still an active offer... after this layoff would you say my new job is safer? Or would that just mean I'm probably next up to be laid off?
A lot of companies do this just as a matter of course. They call it "trimming the fat", eg, laying off the bottom 5%, 10% or whatever percent of employees, in hopes the future hires will be higher performing.
What makes you think companies actually use performance as a metric to do layoffs? Why makes you think they aren't just using a random number generator to find people to trim?
This is clearly the "new management trend" for 2023, to the point that what's newsworthy is which tech companies are __not__ laying off 8%-15% of their staff. Maybe we should hear about those.
I'm wondering how many of the commenters on these threads have been around for long enough to experience pervious layoff events? The reality is that any company has 5-10% staff that aren't really doing anything useful, and can be fired without significant impact to business operations. So it's more that companies don't just fire those people every year because normally various kinds of negative blowback would ensue. The reason we're seeing layoffs now is basically that the conditions are such that said blowback is reduced. In other words: it's in fashion (in Elite circles) and they can get away with it.
Of course often the appropriate 5-10% aren't actually the target of layoffs, but that's an orthogonal problem.
Of course often the appropriate 5-10% aren't actually the target of layoffs, but that's an orthogonal problem.
[deleted]
Of course other sectors are hiring and hoping to take advantage of moves like this. I'd love to find some of these folks for a university job if I knew how to reach them.
We benefited from the incessant hiring with outsized compensations. Now we’re on the flip side of that. If you want stability, tech is not the place for you.
Message to Confluent Employees from Jay Kreps
Today we’re announcing a very hard change we have to make. We are rolling out a set of adjustments to our 2023 plan oriented around driving additional efficiency. As part of this we are reducing our workforce by about 8%. If you are one of the individuals whose role is impacted, you will receive a calendar invite for a conversation with a senior leader today. If you are outside of the U.S. there may be slightly different timelines based on local laws. If you are one of the individuals whose role is not impacted, you will receive a follow-up email letting you know you are not impacted.
Why we are doing this
This decision was not made lightly. However, I believe this is a necessary change to set us up for success in the year ahead.
To many, I’m sure this news comes as a shock, though those following the broader tech ecosystem closely may be less surprised. In this challenging economic environment, sales cycles are taking longer and many of our deals are more scrutinized by customers. This puts pressure on growth. Meanwhile there has also been a significant shift in the market, resetting expectations for the tech sector. This rapid change in the world around us, left our plans for the year increasingly squeezed between downward pressure on growth from a slowing economy and upwards pressure on efficiency from the rapid change in the market. Ultimately, we had optimized some aspects of our operations for a very different world than we found ourselves operating in. The responsibility for that falls squarely on me.
In light of this we reevaluated our plans for the year, and have made the decision to accelerate our path to profitability, while still delivering high growth. In our new plan, we expect to grow revenue by approximately 30% in 2023 and exit Q4 2023 with breakeven non-GAAP operating margin.
At my request, everyone on the executive team took a step back to look at our existing expenses and headcount. We wanted to ensure we had fully funded every essential aspect of our near term execution and longer term plans. But we knew that in the rapid growth over the last 8 years, there was room for improvements in efficiency without compromising our longer term plans. With this in mind we made a set of targeted cuts that enable a more rapid path to profitability while maintaining high growth. We’ll talk through these changes in the days ahead.
Our plan for departures
Unfortunately, we are saying goodbye to many friends and colleagues across the company. We want to do this in a way that ensures we are doing right by our departing team members.
In the U.S., impacted employees will be offered severance, healthcare coverage, outplacement services, immigration support as needed and some forward vesting of RSUs. Those outside the U.S. will receive a broadly similar package but with variations based on the requirements of local laws.
What’s next?
To those who are leaving, I want to say thank you. You have made important contributions to Confluent and I have the utmost respect for all of you.
To those who remain, I know a change like this is jarring and disruptive. We’ll be adjusting some team structures and our plans for the year in light of this change. We’ll be discussing this plan in greater detail at our company kick off next week.
Despite the difficult environment, I remain very optimistic about our future. We are a leader in a massive, highly strategic space. We have a huge opportunity to build a major new data platform that can be the central nervous system of every company.
I want to personally thank all of you for being here, showing up, and helping build Confluent into the enduring company we all know it can be.
-Jay
Today we’re announcing a very hard change we have to make. We are rolling out a set of adjustments to our 2023 plan oriented around driving additional efficiency. As part of this we are reducing our workforce by about 8%. If you are one of the individuals whose role is impacted, you will receive a calendar invite for a conversation with a senior leader today. If you are outside of the U.S. there may be slightly different timelines based on local laws. If you are one of the individuals whose role is not impacted, you will receive a follow-up email letting you know you are not impacted.
Why we are doing this
This decision was not made lightly. However, I believe this is a necessary change to set us up for success in the year ahead.
To many, I’m sure this news comes as a shock, though those following the broader tech ecosystem closely may be less surprised. In this challenging economic environment, sales cycles are taking longer and many of our deals are more scrutinized by customers. This puts pressure on growth. Meanwhile there has also been a significant shift in the market, resetting expectations for the tech sector. This rapid change in the world around us, left our plans for the year increasingly squeezed between downward pressure on growth from a slowing economy and upwards pressure on efficiency from the rapid change in the market. Ultimately, we had optimized some aspects of our operations for a very different world than we found ourselves operating in. The responsibility for that falls squarely on me.
In light of this we reevaluated our plans for the year, and have made the decision to accelerate our path to profitability, while still delivering high growth. In our new plan, we expect to grow revenue by approximately 30% in 2023 and exit Q4 2023 with breakeven non-GAAP operating margin.
At my request, everyone on the executive team took a step back to look at our existing expenses and headcount. We wanted to ensure we had fully funded every essential aspect of our near term execution and longer term plans. But we knew that in the rapid growth over the last 8 years, there was room for improvements in efficiency without compromising our longer term plans. With this in mind we made a set of targeted cuts that enable a more rapid path to profitability while maintaining high growth. We’ll talk through these changes in the days ahead.
Our plan for departures
Unfortunately, we are saying goodbye to many friends and colleagues across the company. We want to do this in a way that ensures we are doing right by our departing team members.
In the U.S., impacted employees will be offered severance, healthcare coverage, outplacement services, immigration support as needed and some forward vesting of RSUs. Those outside the U.S. will receive a broadly similar package but with variations based on the requirements of local laws.
What’s next?
To those who are leaving, I want to say thank you. You have made important contributions to Confluent and I have the utmost respect for all of you.
To those who remain, I know a change like this is jarring and disruptive. We’ll be adjusting some team structures and our plans for the year in light of this change. We’ll be discussing this plan in greater detail at our company kick off next week.
Despite the difficult environment, I remain very optimistic about our future. We are a leader in a massive, highly strategic space. We have a huge opportunity to build a major new data platform that can be the central nervous system of every company.
I want to personally thank all of you for being here, showing up, and helping build Confluent into the enduring company we all know it can be.
-Jay
CRO was axed. Anticipate this will hurt sales, Marketing and business development before they go after the engineers.
It's so strange that every companies' number is 6-8%. Its almost like it is a cargo cult or something.
why speak about an integer number of humans in a percent?
to soften the blow?
because they're speaking to investors, often institutional for whom it's more useful to know the rates and who don't particularly care about the lives of the employees joining the job-seekers?
to soften the blow?
because they're speaking to investors, often institutional for whom it's more useful to know the rates and who don't particularly care about the lives of the employees joining the job-seekers?
The smart companies are going to be using these layoff opportunities to hire good people.
I’m genuinely curious about the language senior management uses to communicate such things in public.
Perhaps it is a disconnect about the audience. The people getting fired are not the audience of the message which communicates their termination. This is inhuman, but what else would one expect from capitalism.
I’ve fired people, for cause and in person, for generic layoffs, and for attrition targets. It is hard, and personal. I never talk about responsibility or blame, or how hard it was for me. I have bad news for you. No need to be flowery about it. I owe them a straightforward conversation.
Perhaps it is a disconnect about the audience. The people getting fired are not the audience of the message which communicates their termination. This is inhuman, but what else would one expect from capitalism.
I’ve fired people, for cause and in person, for generic layoffs, and for attrition targets. It is hard, and personal. I never talk about responsibility or blame, or how hard it was for me. I have bad news for you. No need to be flowery about it. I owe them a straightforward conversation.
Yet they were hiring all not too long ago
Confluent Lays off!
https://m.marketscreener.com/quote/stock/CONFLUENT-INC-12404...
This is highly personal for me since I was part of the early Confluent growth story, having seen the company grow from about 150 folks to 1600+ headcount. I was amazed to see the quality of people who joined the company as each person was highly skilled, motivated and talented in their trades across all the functions of the organization.
I treasured the time the team spent at the happy hour every friday and no pay thursday lunch in Palo Alto, as we bonded and built friendships for life.
I understand that this is a difficult time for everyone involved, and I want to express my deepest compassion for those who have been affected by the layoffs, including everyone in the technology sector as a whole. Losing a job can be a traumatic experience, and my heart goes out to all of those who are facing this challenge.
I hope that you can find new opportunities quickly and that this difficult period in your life is as short as possible. Please know that you are in my thoughts and that I wish you all the best during this difficult time.
If you need to speak to someone about how to navigate this cycle, feel free to hit me up. I want to chat with everyone.
I have seen market cycles both good times and bad times. I still remember back in the day when my graduation ceremony coincided with the 2008 market crash. As a new graduate, it felt like the end of the world, however once I refocused my energies to dissect the situation, I found an abundance of opportunities in the downcycle. I realized there is an opportunity in every change and that each opportunity is different and unique in perspective.
I also wanted to add that we need to capture this energy, across the technology sector in general, to reconnect, chat, share ideas and be there for each other, be part of this giant pack, be part of the confluent mafia, that everyone who is still wearing the golden handcuff will be one day regretful. I hope you do realize that this is a pivotal moment that we get to be a part of, that is to re-evaluate our strenghts and re-align expectations to explore new opportunities and position ourselves for the next stage of growth story.
As per the reports, Venture capitalists are burdened with hundreds of billions of dollars that they can't invest in later-stage companies due to economic conditions. There has probably literally never been a better time in history to work on solving real-world problems.
The acceleration of these highly competent people hitting the labor market at the same time is going to create an burst of innovation. This will create an opportunity that will certainly be a prominent pillar in the next economic recovery.
For example, here is a recent post on what others who have left Confluent have been upto: https://www.linkedin.com/feed/update/urn:li:activity:6953693...
I know some of us got more severance than others, and I know some of us are in more delicate circumstances than others, but let's take a minute to consider the possibilities with each other and at least have a little fun thinking out of the box about what the future could bring.
I hope the following verse from Bhagvad Gita will bring peace and strength to you in the current situation: "The friction between our desire for the predictable and the mutability of life makes us feel a bit lost. Rather than rail against change, which the Gita says is inherent in all things, the key is to broaden our view by becoming less self-focused, less ruled by our ego. Change the inputs and you change the story. That shift occurs when we deepen our level of consciousness. The only place of unchanging truth, says the Gita, is internal, where we come into alignment with the Self."
Use all your power to free the senses from attachment and aversion alike, and live in the full wisdom of the Self. —Bhagavad Gita, 2.68
This is highly personal for me since I was part of the early Confluent growth story, having seen the company grow from about 150 folks to 1600+ headcount. I was amazed to see the quality of people who joined the company as each person was highly skilled, motivated and talented in their trades across all the functions of the organization.
I treasured the time the team spent at the happy hour every friday and no pay thursday lunch in Palo Alto, as we bonded and built friendships for life.
I understand that this is a difficult time for everyone involved, and I want to express my deepest compassion for those who have been affected by the layoffs, including everyone in the technology sector as a whole. Losing a job can be a traumatic experience, and my heart goes out to all of those who are facing this challenge.
I hope that you can find new opportunities quickly and that this difficult period in your life is as short as possible. Please know that you are in my thoughts and that I wish you all the best during this difficult time.
If you need to speak to someone about how to navigate this cycle, feel free to hit me up. I want to chat with everyone.
I have seen market cycles both good times and bad times. I still remember back in the day when my graduation ceremony coincided with the 2008 market crash. As a new graduate, it felt like the end of the world, however once I refocused my energies to dissect the situation, I found an abundance of opportunities in the downcycle. I realized there is an opportunity in every change and that each opportunity is different and unique in perspective.
I also wanted to add that we need to capture this energy, across the technology sector in general, to reconnect, chat, share ideas and be there for each other, be part of this giant pack, be part of the confluent mafia, that everyone who is still wearing the golden handcuff will be one day regretful. I hope you do realize that this is a pivotal moment that we get to be a part of, that is to re-evaluate our strenghts and re-align expectations to explore new opportunities and position ourselves for the next stage of growth story.
As per the reports, Venture capitalists are burdened with hundreds of billions of dollars that they can't invest in later-stage companies due to economic conditions. There has probably literally never been a better time in history to work on solving real-world problems.
The acceleration of these highly competent people hitting the labor market at the same time is going to create an burst of innovation. This will create an opportunity that will certainly be a prominent pillar in the next economic recovery.
For example, here is a recent post on what others who have left Confluent have been upto: https://www.linkedin.com/feed/update/urn:li:activity:6953693...
I know some of us got more severance than others, and I know some of us are in more delicate circumstances than others, but let's take a minute to consider the possibilities with each other and at least have a little fun thinking out of the box about what the future could bring.
I hope the following verse from Bhagvad Gita will bring peace and strength to you in the current situation: "The friction between our desire for the predictable and the mutability of life makes us feel a bit lost. Rather than rail against change, which the Gita says is inherent in all things, the key is to broaden our view by becoming less self-focused, less ruled by our ego. Change the inputs and you change the story. That shift occurs when we deepen our level of consciousness. The only place of unchanging truth, says the Gita, is internal, where we come into alignment with the Self."
Use all your power to free the senses from attachment and aversion alike, and live in the full wisdom of the Self. —Bhagavad Gita, 2.68
Well, here’s some great news: The CEO takes full responsibility [1]!
> Ultimately, we had optimized some aspects of our operations for a very different world than we found ourselves operating in. The responsibility for that falls squarely on me.
[1]: https://www.publicnow.com/view/CEA41F7D5BB5C6CFF1144A3A9C462...
> Ultimately, we had optimized some aspects of our operations for a very different world than we found ourselves operating in. The responsibility for that falls squarely on me.
[1]: https://www.publicnow.com/view/CEA41F7D5BB5C6CFF1144A3A9C462...
Let’s not mince words, though; the accountability for this decision rests with me. The consequences, on the other hand, rest with you, but so does a pretty generous COBRA package.[1]
/s
[1]: https://www.mcsweeneys.net/articles/macroeconomic-changes-ha...
/s
[1]: https://www.mcsweeneys.net/articles/macroeconomic-changes-ha...
[deleted]
> In our new plan, we expect to grow revenue by approximately 30% in 2023 and exit Q4 2023 with breakeven non-GAAP operating margin.
Interesting plan, too bad operating margin doesn't mean profitable.
In 2022 Q3 the 9month cumulative sums show a revenue of 417M with net loss of 346M. Growing 417M by 30% to say 550M still would be a loss of 204M. If they also cut operating expenses by 33% then they could become profitable though.
Interesting plan, too bad operating margin doesn't mean profitable.
In 2022 Q3 the 9month cumulative sums show a revenue of 417M with net loss of 346M. Growing 417M by 30% to say 550M still would be a loss of 204M. If they also cut operating expenses by 33% then they could become profitable though.
[deleted]
Some of these companies had so many employees - it's staggering. Kafka management is a useful tool but man, 2000 employees is a LOT for something my SRE team does as a standard part of the job.
I am not saying 2000 is too much but I'm 100% sure that your SRE team only does a tiny fraction of what Confluent is doing.
They will have marketing folks, lawyers, they will almost certainly do more testing than you, they are going to have to support many many more configurations than you, they have people all over the world, they have a support staff, they have upstream contributors, they have backoffice people, ...
Nothing against you or your team but what you're doing does in no way compare to building a fully fledget product for on-prem and as a SaaS.
They will have marketing folks, lawyers, they will almost certainly do more testing than you, they are going to have to support many many more configurations than you, they have people all over the world, they have a support staff, they have upstream contributors, they have backoffice people, ...
Nothing against you or your team but what you're doing does in no way compare to building a fully fledget product for on-prem and as a SaaS.
2000 were SREs?
I am not joining this pity-party.
Companies hire tech workers to stifle their competition; whilst keeping their workers 'sedated' on fake projects (i.e. projects that are paraded as important, but the 'inner-circle' knows well its just to keep the nerds happy). During tough times, its not unreasonable for a company to trim their fat. Personally, tech and academia has been bloated for over a decade now. So no foul here.
Companies hire tech workers to stifle their competition; whilst keeping their workers 'sedated' on fake projects (i.e. projects that are paraded as important, but the 'inner-circle' knows well its just to keep the nerds happy). During tough times, its not unreasonable for a company to trim their fat. Personally, tech and academia has been bloated for over a decade now. So no foul here.