Salesforce Lays Off 8k While Paying Matthew McConaughey $10M/Yr to Sit Around(futurism.com)
futurism.com
Salesforce Lays Off 8k While Paying Matthew McConaughey $10M/Yr to Sit Around
https://futurism.com/the-byte/company-paying-matthew-mcconaughey-10-million-to-sit-around
196 comments
> Considering they exceeded all analyst expectations for revenue and profits in the last quarter, it's safe to say that some of their effort is working.
> The fact that they also decided that 8K out of the 25K+ employees hired during the pandemic were redundant
Kinda odd how you attribute them "beating the street" more to Mathew McConaughey's presence than the work output of 8 thousand employees. Can you elaborate on why this is so clear to you?
> The fact that they also decided that 8K out of the 25K+ employees hired during the pandemic were redundant
Kinda odd how you attribute them "beating the street" more to Mathew McConaughey's presence than the work output of 8 thousand employees. Can you elaborate on why this is so clear to you?
The old joke is the marketing manager saying: "Half of all our marketing expenditures are wasted. The problem is we don't know which half."
In my years in business, it's nearly impossible to draw an accurate cause and effect line between marketing and sales. Too many other factors at work.
In my years in business, it's nearly impossible to draw an accurate cause and effect line between marketing and sales. Too many other factors at work.
One thing I've noticed is that having competent and down to earth marketing folks also helps to boos overall morale at a company.
It does seem odd that companies would pay for services from Salesforce because of a celebrity quip, instead of a determination that said services would improve the company's operations.
Or perhaps these Marketing departments are just really good at internal marketing of budget usage?
Or perhaps these Marketing departments are just really good at internal marketing of budget usage?
That's not what marketing does. It doesn't influence the decision. Marketing makes sure your company is top of mind when the customer decides to make a decision.
Not just that. An effect of advertising I only understood later in life is that they give the company name recognition among all your peers.
E.g. BMW doesn't create car commercials just to get everyone to think about BMW when buying cars. They make car commercials to make sure everyone knows that BMW is expensive and good, so that driving a BMW is a signal that you're wealthy.
Similarly, Salesforce might want to make it clear that if you go with them, it's a "defensible" choice that you can easily explain to your boss.
E.g. BMW doesn't create car commercials just to get everyone to think about BMW when buying cars. They make car commercials to make sure everyone knows that BMW is expensive and good, so that driving a BMW is a signal that you're wealthy.
Similarly, Salesforce might want to make it clear that if you go with them, it's a "defensible" choice that you can easily explain to your boss.
To be fair though, that's influencing the decision that they make, at least averaged over many people.
So are you saying, then, that you find it odd that marketing and advertising works? Nothing wrong if you do, I just wanted to be clear on that point.
No, I find it odd to spend that much cash on a celebrity endorsement when the target consumer audience (businesses) know that the celebrity is not a Sales Force customer:
"What the heck to Matthew McConaughey use SalesForce for ?"
"What the heck to Matthew McConaughey use SalesForce for ?"
or more importantly:
how do you know it worked in this specific case though? maybe Salesforce would have done just as well financially and also saved 20 million or something like that without that ad campaign
And maybe it wouldn't have. But since I don't work for SalesForce's marketing dept, there's no way to tell.
[deleted]
We buy face creams and cars and sodas and everything else under the sun because popular celebrities tell us to. You can find it "odd" but it works.
It works for enterprise software? why so few companies do it then?
also even if we focus on the consumer market there are very successful companies which don’t spend any money on traditional marketing and don’t do ads at all.
also even if we focus on the consumer market there are very successful companies which don’t spend any money on traditional marketing and don’t do ads at all.
> It works for enterprise software?
Is not really a new marketing concept
https://www.youtube.com/watch?v=P0AJM6HMYjM
Is not really a new marketing concept
https://www.youtube.com/watch?v=P0AJM6HMYjM
> there are very successful companies
Naming a couple would make your claim more persuasive.
Naming a couple would make your claim more persuasive.
Is it very hard to believe that (1) some single digit % of employees (and even entire divisions) at a massive corporation – one that nearly doubled in size during the pandemic – aren't adding a lot of value and (2) a flashy marketing campaign can bring a company new customers?
8k of 25k is not some "single digit %"
u sound like u get paid for salesforce-pr
u sound like u get paid for salesforce-pr
25k what? Salesforce had over 80k employees at the time of the layoffs.
Well all the numbers I've ever seen have been just shy of 80, and 8/80 = 10%, which is 2 digits. So there are two possibilities. One possibility, I guess, is that both your and parent are using some sort of counting system we'll call "base b" where 25 base b = 80 base 10 and in which 8/80 base b < 10% base b. The other, more likely, possibility is that you're intentionally under-stating the scale of the layoffs and being oddly defensive.
Enjoy your Salesforce stock grant, I guess ;-)
Enjoy your Salesforce stock grant, I guess ;-)
The base b here would be base 37.5 :)
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They have better metrics than random anti-corporate HNer who is typically clueless about accounting, marketing, lead-gen?
Don't you think that the ppl deciding to hire like crazies just to fire a year later should be accountable for that? They're clearly making bad decisions. It's just that someone else is expected to pay for them.
How many financially bad decisions you made in 2022?
Did you buy real-estate in 20/21 when the mortgate rates were 2%? If you didn't that's a terrible decision. Did you take responsibility and fire yourself as the primary bread-winner for your family? Why not?
Did you buy any high-growth tech stocks in 2021? If you did, that was a terrible decision.
Any idiot can arm-chair hindsight decisions
Did you buy real-estate in 20/21 when the mortgate rates were 2%? If you didn't that's a terrible decision. Did you take responsibility and fire yourself as the primary bread-winner for your family? Why not?
Did you buy any high-growth tech stocks in 2021? If you did, that was a terrible decision.
Any idiot can arm-chair hindsight decisions
> Did you buy real-estate in 20/21 when the mortgate rates were 2%? If you didn't that's a terrible decision.
Meh. Securing financing in 20/21 was great but buying in 20/21 was kind of terrible.
Everyone I know who bought during that time period is now stuck for 30 years because over-extended and took a bath on property value, and a lot of them are already regretting that choice as life returns to normal and they realize life in the outer suburbs is kind of miserable (especially as they RTO).
Conversely, refinancing and leveraging cheap cash in 20/21, building a pile of powder, and then waiting until 2023-2024 to buy looks like a much better move. At least in my local market, either prices are down significantly or the seller can't afford a lower price and the inventory just sits on the market.
Meh. Securing financing in 20/21 was great but buying in 20/21 was kind of terrible.
Everyone I know who bought during that time period is now stuck for 30 years because over-extended and took a bath on property value, and a lot of them are already regretting that choice as life returns to normal and they realize life in the outer suburbs is kind of miserable (especially as they RTO).
Conversely, refinancing and leveraging cheap cash in 20/21, building a pile of powder, and then waiting until 2023-2024 to buy looks like a much better move. At least in my local market, either prices are down significantly or the seller can't afford a lower price and the inventory just sits on the market.
Real Estate from 20/21 appreciated 20-30%. With leverage you'd see 100%-200% returns. You can always sell now and realize that gain. At the end of the day, however you look at it, it'll be one of the stupidest financial decision you've made and you should take responsibility for it
The 20-30% appreciation is in specific markets. Definitely not all markets. Several housing markets are already down from 20/21 highs and lots of markets are trending downward.
Again, securing financing in 20/21 was great but buying real estate at those prices wasn't great relative to alternatives.
If a mortgage was you only way to get leverage in 20/21 then you should've taken out a mortgage. But if you had other ways to get leverage at the lower rates -- eg taking out a line of credit on existing real estate or borrowing against assets -- other options have been performing better and especially over the next few years will continue performing much better.
Again, securing financing in 20/21 was great but buying real estate at those prices wasn't great relative to alternatives.
If a mortgage was you only way to get leverage in 20/21 then you should've taken out a mortgage. But if you had other ways to get leverage at the lower rates -- eg taking out a line of credit on existing real estate or borrowing against assets -- other options have been performing better and especially over the next few years will continue performing much better.
What if it went the other way? The strategy you described is a silly gamble that could have resulted in bankruptcy. Read the book Fooled by Randomness by Nassim Taleb for a treatise on why your thinking is wrong.
I read "Fooled By Randomness" 20 years ago :)
Your rebuttal, is exactly my point. Leaders make strategic bets all the time, especially in the tech world where you have to constantly take risks. Not all of them will come off and leaders have to shut-down / layoff people when bets fail.
I'm admonishing OP for cherry-picking the time when leaders made the wrong bet.
Your rebuttal, is exactly my point. Leaders make strategic bets all the time, especially in the tech world where you have to constantly take risks. Not all of them will come off and leaders have to shut-down / layoff people when bets fail.
I'm admonishing OP for cherry-picking the time when leaders made the wrong bet.
> Did you buy real-estate in 20/21 when the mortgate rates were 2%? If you didn't that's a terrible decision.
You need to make a good decision and learn more about the fact that what you pay for an asset (which is fixed forever) is typically much more important than the loan rate (which can be refinanced at lower rates). Also, overpaying for a house is a trap that cannot be unloaded no matter what the interest rate without bringing cash to closing while underpaying allows for an easy sale no matter how high the interest rate.
You need to make a good decision and learn more about the fact that what you pay for an asset (which is fixed forever) is typically much more important than the loan rate (which can be refinanced at lower rates). Also, overpaying for a house is a trap that cannot be unloaded no matter what the interest rate without bringing cash to closing while underpaying allows for an easy sale no matter how high the interest rate.
Who said that they weren't accountable? It's not just entry level employees getting laid off, but also senior ones, managers and executives. Salesforce got rid of 3 out of their 4 CEOs this year.
Speaking here as an employee that was affected by layoffs in one of those companies that hired like crazy during the pandemic.
I see no problems in their behavior. The insane rate of hiring was useful to give a good boost to my salary in a couple of years.
Here's to hoping they go back at hiring like crazy again.
I see no problems in their behavior. The insane rate of hiring was useful to give a good boost to my salary in a couple of years.
Here's to hoping they go back at hiring like crazy again.
Those might be bad decisions for the employees, but those might be good decisions for the company.
Basically, scoop up talent while you can, then cut the lowest performers. It's basically the last step in a thorough interview process.
Basically, scoop up talent while you can, then cut the lowest performers. It's basically the last step in a thorough interview process.
If you've ever worked somewhere where there's been layoffs, you'll know that of the remaining employees, all of the best people immediately start looking for jobs elsewhere. If management is so incompetent that they overhired or underperformed bad enough to lay people off, the writing is on the wall to jump ship. It can take years to repair the motivational and cultural damage caused by a layoff. Especially when paired with "soft" layoff behavior like mandating RTO and "performance" management.
I've definitely been through some layoffs where most employees said good riddance and moved on with life immediately, so I think there is definitely some variations in morale response.
It is one thing if the layoffs are at a startup running out of money, and another if layoffs are at a profitable company
It is one thing if the layoffs are at a startup running out of money, and another if layoffs are at a profitable company
Where is this magical "elsewhere" part where there would be no layoffs?
It's mind-boggling that we have raised a generation of people who are absolutely clueless about "Cost-of-Capital". It is worse than people not understanding democracy
It's mind-boggling that we have raised a generation of people who are absolutely clueless about "Cost-of-Capital". It is worse than people not understanding democracy
> Where is this magical "elsewhere" part where there would be no layoffs?
Any company with competent management. That includes not cargo culting layoffs while turning a blind eye to the damage they cause to a company.
> It's mind-boggling that we have raised a generation of people who are absolutely clueless about "Cost-of-Capital". It is worse than people not understanding democracy
What's mind-boggling is that people think the cost savings from a layoff happens in a vacuum. There are definitely repercussions in terms of loss of productivity, increased employee churn, brand damage, increased difficulty hiring in the future, loss of operational knowledge...
Layoff are a sign of mismanagement. That has nothing to do with the "cost-of-capital".
Any company with competent management. That includes not cargo culting layoffs while turning a blind eye to the damage they cause to a company.
> It's mind-boggling that we have raised a generation of people who are absolutely clueless about "Cost-of-Capital". It is worse than people not understanding democracy
What's mind-boggling is that people think the cost savings from a layoff happens in a vacuum. There are definitely repercussions in terms of loss of productivity, increased employee churn, brand damage, increased difficulty hiring in the future, loss of operational knowledge...
Layoff are a sign of mismanagement. That has nothing to do with the "cost-of-capital".
So you have never created a bug in your life? Made a mistake?
Your statement is as naive as "A Production Bug / Latency is a sign of Incompetent Software Developer" Should we fire you as soon as you hit the first bug?
BTW, You have a fundamental misunderstanding of Cost of Capital
Tomorrow if your salary is cut by 50%, would you cut-down on extra expenses? Is that a sign of mismanagement from you?
Your statement is as naive as "A Production Bug / Latency is a sign of Incompetent Software Developer" Should we fire you as soon as you hit the first bug?
BTW, You have a fundamental misunderstanding of Cost of Capital
Tomorrow if your salary is cut by 50%, would you cut-down on extra expenses? Is that a sign of mismanagement from you?
I'm not sure if you replied to the right comment or not since I didn't say anything about firing engineers (or anyone).
My point is that over-hiring and layoffs aren't "good for the company" as the post I was responding to claimed. They're both a sign of bad management that incurs a cost on the company being poorly managed. One of those costs is that top performers leave as they are the first to recognize mismanagement.
My point is that over-hiring and layoffs aren't "good for the company" as the post I was responding to claimed. They're both a sign of bad management that incurs a cost on the company being poorly managed. One of those costs is that top performers leave as they are the first to recognize mismanagement.
> Tomorrow if your salary is cut by 50%, would you cut-down on extra expenses? Is that a sign of mismanagement from you?
if you knowingly and willfully put yourself into a situation which resulted in your salary being cut by 50% then yes
if you knowingly and willfully put yourself into a situation which resulted in your salary being cut by 50% then yes
It's still worth it to a apply for a job that pays double or take a job that pays double. It is only a personal failing if you misunderstand the risk and cost going in.
Similarly, if you gamble on a coin flip and lose, that doesn't mean it was a bad bet. It is only a bad bet if you calculate the odds and expected returns incorrectly. People seem to really struggle with this concept
Similarly, if you gamble on a coin flip and lose, that doesn't mean it was a bad bet. It is only a bad bet if you calculate the odds and expected returns incorrectly. People seem to really struggle with this concept
That's not what Salesforce did. They cut longterm and high-performing employees, and we still have freshly hired randoms who know nothing.
Those people should be accountable for that, sure. But Matthew McConaughey isn't accountable for that. We don't know the terms of his contract -- just that his contract was better than that of at-will employees (which, of course it was. The contracts for executives are also better than those of at-will employees...that's how this works) -- and we don't know what all was included as part of it.
But even if paying a celebrity $10 million for endorsements is a bad decision (and we don't know if it is or if it isn't -- it's probably a wash, as most marketing expenditures like this are), that decision is unrelated to why 8,000 people were laid off.
But even if paying a celebrity $10 million for endorsements is a bad decision (and we don't know if it is or if it isn't -- it's probably a wash, as most marketing expenditures like this are), that decision is unrelated to why 8,000 people were laid off.
> Considering they exceeded all analyst expectations for revenue and profits in the last quarter, it's safe to say that some of their effort is working.
Didn't the layoffs happen in January (the end of their fiscal quarter) and wouldn't they have taken the costs of those layoffs and subsequent severance in that quarter? So they recorded record revenue and profits _despite_ laying off people, not because they laid them off.
Didn't the layoffs happen in January (the end of their fiscal quarter) and wouldn't they have taken the costs of those layoffs and subsequent severance in that quarter? So they recorded record revenue and profits _despite_ laying off people, not because they laid them off.
And whilst $10m sounds like a lot (and it is!) that's only about ~50 (Bay Area) employees.
Probably fewer than that. Cost of an employee to the company is on average 2x their salary. Plus such mass layoffs don't just target entry level employees but an entire vertical slice including senior ICs, managers and executives. A lot of them at companies like Salesforce, Google, Meta get $1M+/yr in comp.
> marketing budget
Do people who would be in a place to make the decision about their companies choice of CRMP really need to be marketed to in order to know about Salesforce? Seems like a wasted budget IMO.
Do people who would be in a place to make the decision about their companies choice of CRMP really need to be marketed to in order to know about Salesforce? Seems like a wasted budget IMO.
> The layoffs they are referring to happened in early January. They are not laying off another 8000 employees.
That's not true. They announced 8,000 layoffs in January but they haven't executed all of that yet. As per the quoted WSJ article:
> In January, the company said 8,000 workers had to go. “It’s an unfortunate part that you have to say goodbye to folks who, in many cases, are your friends and you have relationships with,” Mr. Benioff said in an interview. “But, ultimately, the success of the business has to be paramount.”
> After an executive retreat in February, he proposed in a draft of a year-ahead strategy plan that the company rank employees based on metrics, including how much money salespeople bring in. Those in the bottom 5% would be routinely dismissed, according to a draft of the policy posted on the company’s Slack channel and described to The Wall Street Journal.
That's not true. They announced 8,000 layoffs in January but they haven't executed all of that yet. As per the quoted WSJ article:
> In January, the company said 8,000 workers had to go. “It’s an unfortunate part that you have to say goodbye to folks who, in many cases, are your friends and you have relationships with,” Mr. Benioff said in an interview. “But, ultimately, the success of the business has to be paramount.”
> After an executive retreat in February, he proposed in a draft of a year-ahead strategy plan that the company rank employees based on metrics, including how much money salespeople bring in. Those in the bottom 5% would be routinely dismissed, according to a draft of the policy posted on the company’s Slack channel and described to The Wall Street Journal.
The two aren't connected. They announced 10% layoffs in January and executed it. Then they announced that they would be rolling out stack ranking and PIP quotas for managers, but both of those decisions were later reversed (https://www.businessinsider.com/salesforce-plans-ranking-emp...).
It's actually unclear as to whether or not they have done all of the layoffs. From your article:
> The company has been reducing its workforce since November, when it cut hundreds of salespeople. In January, the company announced restructuring plans to lay off 10% of staff — roughly 7,000 people — and shed some of its office real estate.
> Since then, thousands of workers from that planned 10% cut have been notified of their terminations. Insider has also reported that remaining employees are feeling increased performance pressure, and some are being pressured to quit with severance offers that are not as big as those being laid off.
> Salesforce has not confirmed whether it has notified all 10% of workers included in the official restructuring plan yet. Insider previously reported that at least one person familiar with the matter said the company was evaluating last month whether it needs to cut an additional 10%.
> The company has been reducing its workforce since November, when it cut hundreds of salespeople. In January, the company announced restructuring plans to lay off 10% of staff — roughly 7,000 people — and shed some of its office real estate.
> Since then, thousands of workers from that planned 10% cut have been notified of their terminations. Insider has also reported that remaining employees are feeling increased performance pressure, and some are being pressured to quit with severance offers that are not as big as those being laid off.
> Salesforce has not confirmed whether it has notified all 10% of workers included in the official restructuring plan yet. Insider previously reported that at least one person familiar with the matter said the company was evaluating last month whether it needs to cut an additional 10%.
> The fact that they also decided that 8K out of the 25K+ employees hired during the pandemic were redundant has nothing to do with Matthew McConaughey.
Like everyone else in Tech, they over-hired because they were objectively in a different state of the world in 2021, which was possibly everyone's best year in 1-2 decades. Then 2022 rolled in, shit hit the fan on inflation, Ukraine war and a seemingly overnight massive hike in rates after being in negative yield territory for a while... guess what? Companies went back to the drawing board, stared at lower revenue expectations, higher costs, worse margins given operating leverage and decided they could do without X% employees to favor profitability over growth, since there's nowhere near the same growth to be had in 2022-23 as there was in 2020-21
Conceptually, I dislike layoffs as much as the next person... but keeping the same cost structure against deteriorating topline growth is just Bad Business, and that's how CEOs get fired and companies go under. Ask the owner of the pizza joint nearest to you and they're likely to agree.
All in all, unemployment is still at record lows so I'm incline to believe that laid-off workers are finding employment elsewhere, which is the good side of Capitalism.
It could have been worse, John... a lot worse
Like everyone else in Tech, they over-hired because they were objectively in a different state of the world in 2021, which was possibly everyone's best year in 1-2 decades. Then 2022 rolled in, shit hit the fan on inflation, Ukraine war and a seemingly overnight massive hike in rates after being in negative yield territory for a while... guess what? Companies went back to the drawing board, stared at lower revenue expectations, higher costs, worse margins given operating leverage and decided they could do without X% employees to favor profitability over growth, since there's nowhere near the same growth to be had in 2022-23 as there was in 2020-21
Conceptually, I dislike layoffs as much as the next person... but keeping the same cost structure against deteriorating topline growth is just Bad Business, and that's how CEOs get fired and companies go under. Ask the owner of the pizza joint nearest to you and they're likely to agree.
All in all, unemployment is still at record lows so I'm incline to believe that laid-off workers are finding employment elsewhere, which is the good side of Capitalism.
It could have been worse, John... a lot worse
For what it's worth, this deal was almost definitely signed long before the economy crashed. And he was paid to create / star in ads (I'd assume the money went to his production company, not him specifically), which I don't think is particularly unique... a lot of large billion dollar businesses hire celebrity spokespeople.
EDIT: Okay, economy hasn't technically crashed, but valuations are down, funding is down, and layoffs are up. Tech companies have a very different view of money now than they did 8 months ago.
EDIT: Okay, economy hasn't technically crashed, but valuations are down, funding is down, and layoffs are up. Tech companies have a very different view of money now than they did 8 months ago.
The economy hasn’t crashed and their earnings and profits are both up by double digits as of yesterday’s report:
https://investor.salesforce.com/press-releases/press-release...
This is businesses reacting to activist investors and trying to quash workers asking for better compensation. To the extent that the economy lags it’ll be due to layoffs affecting people who circulate their income more effectively than shareholders.
https://investor.salesforce.com/press-releases/press-release...
This is businesses reacting to activist investors and trying to quash workers asking for better compensation. To the extent that the economy lags it’ll be due to layoffs affecting people who circulate their income more effectively than shareholders.
> their earnings and profits are both up by double digit
To be more specific, their adjusted non-GAAP profits are higher than expected. By GAAP measures they posted a loss for the previous quarter.
To be more specific, their adjusted non-GAAP profits are higher than expected. By GAAP measures they posted a loss for the previous quarter.
Fair but I’m going by the first thing their CEO told investors:
> “For the full year we delivered $31.4 billion in revenue, up 18% year-over-year, or 22% in constant currency, one of the best performances of any enterprise software company our size,” said Marc Benioff, Chair and CEO of Salesforce. “We closed FY23 with operating cash flow reaching $7.1 billion, up 19% year-over-year, the highest cash flow in our company’s history, and one of the highest cash flows of any enterprise software company our size.”
> “For the full year we delivered $31.4 billion in revenue, up 18% year-over-year, or 22% in constant currency, one of the best performances of any enterprise software company our size,” said Marc Benioff, Chair and CEO of Salesforce. “We closed FY23 with operating cash flow reaching $7.1 billion, up 19% year-over-year, the highest cash flow in our company’s history, and one of the highest cash flows of any enterprise software company our size.”
> This is businesses reacting to activist investors and trying to quash workers asking for better compensation.
I feel like you're saying this with a negative connotation. Isn't that what the business is supposed to do? Run more efficiently, cut excess bureaucracy, make more profits?
I feel like you're saying this with a negative connotation. Isn't that what the business is supposed to do? Run more efficiently, cut excess bureaucracy, make more profits?
That’s a bit too simplified, though, bordering on the shareholder value fallacy. Efficiency isn’t an objective fact in most cases and reasonable people can disagree about whether something has benefits on a different timeframe (e.g. R&D) or which are hard to quantify (cutting support & customer relations often seems like a pure win at first). Some shareholders thought Apple wasted too much money developing personal music players and should stick to computers, and listening to them would have cancelled the iPod and never reached the iPhone.
Given that they are reporting solid profits on very large revenue volumes, I don’t think you can make the case that this was a financial necessity and the scale is too large to have had much detailed thought going into it. (And “excess bureaucracy” is cut by sacking the C/VP-level managers who built it, not the rank and file implementing those policies.)
Given that they are reporting solid profits on very large revenue volumes, I don’t think you can make the case that this was a financial necessity and the scale is too large to have had much detailed thought going into it. (And “excess bureaucracy” is cut by sacking the C/VP-level managers who built it, not the rank and file implementing those policies.)
Inflation is up by double digits, too, so profits going up by double digits may just be running in place.
The economy has crashed? That's news to me. Last I heard we had record low unemployment across the board and widespread, if modest, growth.
unemployment is a lagging indicator of economic malice. also, we have boomers a large generation retiring from work force, so even if the economic pie is not expanding or stagnant, there are labor pressures and these are not evenly distributed in the economy.
Trades is seeing phenomenal demand for labor, where as white collar people are going to get pink slips esp. in the fields (finance, tech, commercial real estate management, refinancing/mortgage) that have boomed during last decade.
Trades is seeing phenomenal demand for labor, where as white collar people are going to get pink slips esp. in the fields (finance, tech, commercial real estate management, refinancing/mortgage) that have boomed during last decade.
None of what you said is either false or evidence of an ongoing economy crash.
what I meant from my comment is, when there is un-deniable evidence, it is too late!
And when there is no evidence, it's to soon. It cuts both ways: you can't predict market movement, and after it's moved you can't do anything about it... As J.P. Morgan put it (when asked what the market would do that day): "It will fluctuate".
Absence of evidence is not evidence of absence. When there is no evidence.. there is no evidence that is it. Predictions are hard, but anyone forward looking has to make at least assumptions. The goal is to be less wrong or err on the side of caution.
Sure keep predicting economic collapse and eventually you'll be right. People make careers out of it. In good times there will always be good and bad indicators to pick from.
(it’s “malaise”)
thank you! (was using the wrong spelling all the time, mentally of course)
Exactly this. Financial situtions change but you still haven't to honor contracts that were signed. The 8K employees didn't have the same contracts as a long term spokesperson...that is not unusual at all...
So what? Can a company not take responsibility for the lives of thousands of employees? Either don't be a headcount glut, or take responsibility for the damage you'll inflict on these real life people and their families.
Why is the expectation from managers to be decent human beings is so unreasonable?
Do we need a contract for that?
There is no responsibility on the part of the company to do anything other than what they agreed to do.
If employees wanted to be kept on even in a downturn, they should have negotiated for it, but I suspect the price they would have had to pay for that would make the entire prospect unattractive.
You just want to eat your cake, and have it afterwards too.
If employees wanted to be kept on even in a downturn, they should have negotiated for it, but I suspect the price they would have had to pay for that would make the entire prospect unattractive.
You just want to eat your cake, and have it afterwards too.
Well I know of other employers that do take in to account the impact on the life of they're workers and families, and will hire very conservatively, and would resort to firing only if very extreme circumstances.
It's because they were not trained in American style business schools, where everyone is just a number, And there's no such thing as decency.
You somehow believe this is natural, it's not, it's insane.
Many things are done for the sake of growth at the expense of employees...however those employees generally get much higher salaries in exchange for that. There is a reason Google, Facebook and Apple are the huge companies they are...and they were all started in the US.
Companies like Intel are facing new realities in over hiring as well (not to mention overextending on new fabs)...apparently they preferred not to have layoffs but instead cut salaries, bonuses and 401k matching. Personally I would prefer to fire the bottom 5% than risk the top 10% leaving because of a short sighted cash flow play.
Companies like Intel are facing new realities in over hiring as well (not to mention overextending on new fabs)...apparently they preferred not to have layoffs but instead cut salaries, bonuses and 401k matching. Personally I would prefer to fire the bottom 5% than risk the top 10% leaving because of a short sighted cash flow play.
The obvious question is why didn't these laid off salesforce employees go get a job at the company that never fires people instead?
Hiring very conservatively hurts GDP and increases long-term unemployment, especially for unproven entry level candidates.
They actually like hiring new grads.
Building slowly and soundly is not bad for the GDP.
"But we had to do <terrible thing> because it's the law" isn't an excuse, just a different form of condemnation.
> "But we had to do <terrible thing> because it's the law" isn't an excuse
If the “terrible thing” you’re referring to is paying someone according to a contract signed then, yes, it’s an excuse for why they had to do it.
That’s literally how contracts work.
If the “terrible thing” you’re referring to is paying someone according to a contract signed then, yes, it’s an excuse for why they had to do it.
That’s literally how contracts work.
If you agreed to pay one person enough to do nothing that you have to lay off thousands of other people, I don't care if you signed a contract to do it—it's still worthy of condemnation.
All it changes is the timing of when the action worthy of condemnation occurred.
All it changes is the timing of when the action worthy of condemnation occurred.
Why is paying a celebrity spokesperson terrible?
Because many of the engineers here either do not understand or are unwilling to accept that society operates in more dimensions than the technical and "rational". They see celebrity and functions like marketing and sales as inherently bullshit and unnecessary.
Market cap bubble popped. See also: SPACs imploded.
It'll take a while for a consensus narrative to emerge explaining the widespread tech layoffs.
Usual suspects are: post-pandemic hangover (over hiring), C-level & boards are feckless lemmings (copycats, groupthink), another round of revanchist Capital sticking it to Labor, profit taking by institutional investors, and macroeconomic stuff (end of cheap capital, blah blah blah consumer confidence, and so forth).
My personal theory: The MBAs couldn't think of anything else to do. They're admitting their growth has ended.
Cost cutting, including layoffs, happens in the absence of strategery [sic], plans for the future. So there's nothing to invest in. So they "return monies to their investors".
What's Meta's plans? Social networking and digital advertising have entered the top plateau of the S-curve. And it's not yet clear they can monetize their pivot to 3D porn (the Zuck's "megaverse").
What's Amazon's plans? It's now "Day 2". AWS is on autopilot and will continue to print money. If the rest of the conglomerate disappeared tomorrow, the share price would increase. There's nothing left in the B2C space to do.
As a counter point, Apple definitely has plans. IIRC They keep increasing their R&D. (And they didn't over staff.) So no layoffs.
It'll take a while for a consensus narrative to emerge explaining the widespread tech layoffs.
Usual suspects are: post-pandemic hangover (over hiring), C-level & boards are feckless lemmings (copycats, groupthink), another round of revanchist Capital sticking it to Labor, profit taking by institutional investors, and macroeconomic stuff (end of cheap capital, blah blah blah consumer confidence, and so forth).
My personal theory: The MBAs couldn't think of anything else to do. They're admitting their growth has ended.
Cost cutting, including layoffs, happens in the absence of strategery [sic], plans for the future. So there's nothing to invest in. So they "return monies to their investors".
What's Meta's plans? Social networking and digital advertising have entered the top plateau of the S-curve. And it's not yet clear they can monetize their pivot to 3D porn (the Zuck's "megaverse").
What's Amazon's plans? It's now "Day 2". AWS is on autopilot and will continue to print money. If the rest of the conglomerate disappeared tomorrow, the share price would increase. There's nothing left in the B2C space to do.
As a counter point, Apple definitely has plans. IIRC They keep increasing their R&D. (And they didn't over staff.) So no layoffs.
The major reason was ZIRP going away.
All of this is downstream of that.
All of this is downstream of that.
I don’t get this line of argument.
Sales force believed their business will do better with Matthew Mcconaughey as opposed to those 8k employees. They may be wrong, but it’s for them to figure out if they’re wrong.
I understand the argument that workers should not be disposable, and workers shouldn’t be fired at will, even with at-will contracts, and companies have responsibilities towards their workers. In fact, that argument is popular enough that most countries, including the U.S. until recently, gave workers and their unions privileges that wouldn’t be afforded in a different scenario. And if you want to argue that workers rights have been diluted far too much in with you.
My problem is instead of making this straightforward argument, when you’re trying to compare the firing of workers to spending on a completely different situation. There’s no possible way for an outsider to know what the value of having McConaughey sit around is, what the contractual details are, what the cost, both monetary and otherwise of splitting from him, etc is.
My response to this headline isn’t to be more sympathetic to the workers. It’s to wonder what the hell McConaughey getting contractually paid has anything to do with the poor treatment of workers by Salesforce.
Sales force believed their business will do better with Matthew Mcconaughey as opposed to those 8k employees. They may be wrong, but it’s for them to figure out if they’re wrong.
I understand the argument that workers should not be disposable, and workers shouldn’t be fired at will, even with at-will contracts, and companies have responsibilities towards their workers. In fact, that argument is popular enough that most countries, including the U.S. until recently, gave workers and their unions privileges that wouldn’t be afforded in a different scenario. And if you want to argue that workers rights have been diluted far too much in with you.
My problem is instead of making this straightforward argument, when you’re trying to compare the firing of workers to spending on a completely different situation. There’s no possible way for an outsider to know what the value of having McConaughey sit around is, what the contractual details are, what the cost, both monetary and otherwise of splitting from him, etc is.
My response to this headline isn’t to be more sympathetic to the workers. It’s to wonder what the hell McConaughey getting contractually paid has anything to do with the poor treatment of workers by Salesforce.
> They may be wrong, but it’s for them to figure out if they’re wrong.
You clearly buy into the idea that because salesforce has, within our current economic system, managed to gather to itself substantial economic resources, then it should be the entity that gets to decide how to deploy those resources.
If Salesforce is wrong (and there's a very, very good chance that they are), they have mis-allocated resources, but will face little if any penalty for it other than some opportunity costs that are of their own making.
> There’s no possible way for an outsider to know what the value of having McConaughey sit around is, what the contractual details are, what the cost, both monetary and otherwise of splitting from him, etc is.
The actual question is whether there is actually any way for an insider to know this either, and what penalties would be face if they make a mistake.
I'm fine with companies making a profit (I think). But I want them taxed in a way that removes their control over the bulk of these resource allocation decisions. Salesforce might (or might not) be very good at what they do, but they, like every other corporation (and essentially all individuals) have no demonstrated competence at resource allocation that benefits all of us. US$10M might not seem like a lot if it is roughly your annual salary, but there are huge numbers of people and communities that would be substantially aided via US$10M.
You clearly buy into the idea that because salesforce has, within our current economic system, managed to gather to itself substantial economic resources, then it should be the entity that gets to decide how to deploy those resources.
If Salesforce is wrong (and there's a very, very good chance that they are), they have mis-allocated resources, but will face little if any penalty for it other than some opportunity costs that are of their own making.
> There’s no possible way for an outsider to know what the value of having McConaughey sit around is, what the contractual details are, what the cost, both monetary and otherwise of splitting from him, etc is.
The actual question is whether there is actually any way for an insider to know this either, and what penalties would be face if they make a mistake.
I'm fine with companies making a profit (I think). But I want them taxed in a way that removes their control over the bulk of these resource allocation decisions. Salesforce might (or might not) be very good at what they do, but they, like every other corporation (and essentially all individuals) have no demonstrated competence at resource allocation that benefits all of us. US$10M might not seem like a lot if it is roughly your annual salary, but there are huge numbers of people and communities that would be substantially aided via US$10M.
Even $1M would be a genuinely life-changing amount of money for me and my family. That's well over a decade's worth of my salary. Working where I work now, I wouldn't be able to make an aggregate of $10M over my lifetime even if I lived to be over 100.
Just making sure: You've propose that the state should control the bulk of resource allocation decisions?
Depends on what you mean by "the state".
I respect the power of loosely regulated markets, and a highly entrepeneurial culture.
I also have respect for the power of participatory democracy to make better decisions than profit-incentivized corporations.
Do I think that the current US congress can do a better job than Salesforce in deciding how to spend US10M? Actually, probably yes. Can the current US congress do a better job than the entirety of all US for-profit corporations? Probably not.
Does that mean that there are no forms of non-corporate resource allocation decision making that couldn't do a better job. I believe that it does not, and that we should, as a society, seek out those other forms.
I respect the power of loosely regulated markets, and a highly entrepeneurial culture.
I also have respect for the power of participatory democracy to make better decisions than profit-incentivized corporations.
Do I think that the current US congress can do a better job than Salesforce in deciding how to spend US10M? Actually, probably yes. Can the current US congress do a better job than the entirety of all US for-profit corporations? Probably not.
Does that mean that there are no forms of non-corporate resource allocation decision making that couldn't do a better job. I believe that it does not, and that we should, as a society, seek out those other forms.
The idea that we should "seek out those other forms" is a huge retreat from the statement:
> I'm fine with companies making a profit (I think). But I want them taxed in a way that removes their control over the bulk of these resource allocation decisions.
Do you think we should increase corporate taxes to "the bulk of" a company's resources (implying, at a minimum, more than half)?
Or are you just frustrated by this instance of what seems like obvious waste, but on further consideration still admit that leaving the bulk of resource allocation decisions to the market is the best idea we collectively have?
> I'm fine with companies making a profit (I think). But I want them taxed in a way that removes their control over the bulk of these resource allocation decisions.
Do you think we should increase corporate taxes to "the bulk of" a company's resources (implying, at a minimum, more than half)?
Or are you just frustrated by this instance of what seems like obvious waste, but on further consideration still admit that leaving the bulk of resource allocation decisions to the market is the best idea we collectively have?
I think that we should tax away the majority of corporate profit (modulo, of course, legally sanctioned re-investment).
And no, I do not think that leaving the bulk of resource allocation decisions to the market is the best idea we collectively have. The market works fine for some resource allocation, but it has very disturbing failures with quite a number of things that are central to a happy, free life. I do believe that market pricing is a valuable strategy in running a contemporary economy, but the level of trust and responsibility we place in it has, IMO, gotten completely out of control.
And no, I do not think that leaving the bulk of resource allocation decisions to the market is the best idea we collectively have. The market works fine for some resource allocation, but it has very disturbing failures with quite a number of things that are central to a happy, free life. I do believe that market pricing is a valuable strategy in running a contemporary economy, but the level of trust and responsibility we place in it has, IMO, gotten completely out of control.
Why not penalize the people who gave these resources to salesforce to misallocate?
Depends on who they were. VC is a different story than customers. Don't know Salesforce's situation well enough to understand which applies here.
Bad optics, but even if they could break the contract (which presumably includes work/performance already done) and reallocate the funds to save jobs they’d still be laying off about 7,950 people to reach budget parity.
This was my reaction as well (though it might be closer to 100-200 jobs depending on what kind of jobs were laid off; not all of Salesforce is software engineers).
Though I think there is something to be said about companies spending money imprudently. It's never just that they're giving McConaughey $10M/year. Often times there's a slew of vanity expenses that aren't justifiable. I'm not saying that's necessarily the case with Salesforce, but companies spend a lot of money on things that have dubious ROI.
For example, GE advertised their smart electric grid technology during the Super Bowl and licensed the Wizard of Oz for it. That's a lot of money for an ad with very dubious ROI. Who is buying smart electric grid technology? A very small handful of companies who are going to have a competitive bidding process and are already going to be aware of their options. What was the point of this commercial? To me, the most likely explanation is executive vanity. They want their friends and peers to be impressed by their company and by extension themselves. If they're working on something invisible and behind the scenes, they aren't going to get the same recognition and acclaim.
Companies sponsor sports stadiums and sometimes you can't even really buy their product. Highmark sponsors the Buffalo Bills stadium, but most people get their insurance via their employer and don't have a choice. Xcel Energy sponsors the NHL stadium of the Minnesota Wild and most of their business is as the monopoly electric/natural-gas transmission provider in the area. Are they trying to convince people "you don't want to live off the grid! Life is better with electricity and heating!" And yes, these companies do have some amount of business that is consumer choice, but given how much of their business has zero consumer decision-making, it seems like their ROI on advertising and sponsorships would be terribly low. Consumers do decide on many things - what soda brand to buy, what smartphone to use, what clothes to wear, what car insurance to get, etc. However, we see companies spending lots of money on things that have really dubious justification - beyond the vanity of executives.
I don't know much about Salesforce and what they're spending money on, but I do think there's a reasonable question of whether McConaughey's $10M is part of a larger trend of imprudent, potentially vanity-driven spending.
Though I think there is something to be said about companies spending money imprudently. It's never just that they're giving McConaughey $10M/year. Often times there's a slew of vanity expenses that aren't justifiable. I'm not saying that's necessarily the case with Salesforce, but companies spend a lot of money on things that have dubious ROI.
For example, GE advertised their smart electric grid technology during the Super Bowl and licensed the Wizard of Oz for it. That's a lot of money for an ad with very dubious ROI. Who is buying smart electric grid technology? A very small handful of companies who are going to have a competitive bidding process and are already going to be aware of their options. What was the point of this commercial? To me, the most likely explanation is executive vanity. They want their friends and peers to be impressed by their company and by extension themselves. If they're working on something invisible and behind the scenes, they aren't going to get the same recognition and acclaim.
Companies sponsor sports stadiums and sometimes you can't even really buy their product. Highmark sponsors the Buffalo Bills stadium, but most people get their insurance via their employer and don't have a choice. Xcel Energy sponsors the NHL stadium of the Minnesota Wild and most of their business is as the monopoly electric/natural-gas transmission provider in the area. Are they trying to convince people "you don't want to live off the grid! Life is better with electricity and heating!" And yes, these companies do have some amount of business that is consumer choice, but given how much of their business has zero consumer decision-making, it seems like their ROI on advertising and sponsorships would be terribly low. Consumers do decide on many things - what soda brand to buy, what smartphone to use, what clothes to wear, what car insurance to get, etc. However, we see companies spending lots of money on things that have really dubious justification - beyond the vanity of executives.
I don't know much about Salesforce and what they're spending money on, but I do think there's a reasonable question of whether McConaughey's $10M is part of a larger trend of imprudent, potentially vanity-driven spending.
> Who is buying smart electric grid technology?
> They want their friends and peers to be impressed by their company
You answered your own question.
> They want their friends and peers to be impressed by their company
You answered your own question.
The purpose of advertising is to bring in Revenue, and presumably Salesforce thinks this ad will bring in more than it cost.
This title makes it sound as though the $10M would pay for all those employees. It might pay for 40-50 of them, which is basically a rounding error of 8000.
So the question is: can 40-50 people bring more value than one person who can get the attention (for whatever reason) of large customers' CFOs?
So the question is: can 40-50 people bring more value than one person who can get the attention (for whatever reason) of large customers' CFOs?
Their profits and stock price are both up. Seem like they're making fairly sane financial decisions.
I'm not one to defend the actions of corporate leadership most times, but it does look like Salesforce is doing what the market is asking for: bringing up profits.
And if we assume an average TC of around 250k per engineer, that's 40 employees of 8,000 laid or half a percent of the employees could have been spared by letting go of McConaughey instead. In case they're mistaken it seems a lot easier to hire 40 $250k engineers again then get McConaughey back after breaking a contract.
Meanwhile the company I'm at is just learning that publicly traded companies can't live off runway alone and that they need to become profitable (something they've never done) and please investors. The "leadership"'s failure to act is causing increasing stress in the company, and personally I'm finding it more and more clear they don't really know how to run a public company.
There are so many companies that look like what I described I'm not remotely worried about anyone de-anonymizing me over this info.
I would much rather be at a company like Salesforce right now. At least there's some evidence the layoffs were effective and anyone surviving, after the recent earnings, is probably already starting to feel more assured about their job. When layoffs do eventually hit me where I'm at now, even if I survive I'm not going to have much confidence in the future.
I'm not one to defend the actions of corporate leadership most times, but it does look like Salesforce is doing what the market is asking for: bringing up profits.
And if we assume an average TC of around 250k per engineer, that's 40 employees of 8,000 laid or half a percent of the employees could have been spared by letting go of McConaughey instead. In case they're mistaken it seems a lot easier to hire 40 $250k engineers again then get McConaughey back after breaking a contract.
Meanwhile the company I'm at is just learning that publicly traded companies can't live off runway alone and that they need to become profitable (something they've never done) and please investors. The "leadership"'s failure to act is causing increasing stress in the company, and personally I'm finding it more and more clear they don't really know how to run a public company.
There are so many companies that look like what I described I'm not remotely worried about anyone de-anonymizing me over this info.
I would much rather be at a company like Salesforce right now. At least there's some evidence the layoffs were effective and anyone surviving, after the recent earnings, is probably already starting to feel more assured about their job. When layoffs do eventually hit me where I'm at now, even if I survive I'm not going to have much confidence in the future.
Nobody at salesforce was worried about their job except for layoffs, and all of us who remain are far more worried about our jobs today than we were on Jan 1. Those layoffs were poorly executed and arbitrarily distributed, and execs will make zero commitments to not continue doing so. Not even a pretense of “if you work hard, you’ll be ok”. Just try and make sure you picked a team and project where you personally look essential to some exec and their personal future at the company.
I appreciate the insight from the other side, and am sorry to hear that the situation remains so stressful there.
I guess this situation just universally sucks.
I guess this situation just universally sucks.
$10M / 8k = $1250, so I guess they could have kept each of those employees on another day and a half without the McConaughey contract.
Reminds me of Domino's talking about supporting local businesses, fixing roads and deploying electrical vehicles. Long story short Domino's spent exponetially more on commercials advertising their "good" deeds than on the deeds themselves.
For example spent 54 million on commercials talking about supporting local businesses... provided local businesses 100,000.
https://i.redd.it/3vks4w3nddh81.jpg
Seems like so much in our society is smoke and mirrors these days.
For example spent 54 million on commercials talking about supporting local businesses... provided local businesses 100,000.
https://i.redd.it/3vks4w3nddh81.jpg
Seems like so much in our society is smoke and mirrors these days.
The framing here is off. I understand the impulse, but it's different business decisions and conflating them just isn't reasonable. It is certainly reasonable for employees to question why one area of business was prioritized over others, but framing this as "paying someone $10m to sit around vs 8,000 people who did real work" is still disingenuous.
I'm not defending the layoffs -- though I think all of us have known that the ever-increasing TC wars amongst big companies was unsustainable and that tech companies over-hired. And none of that is the people who were laid off's fault. At all. These were bad decisions on the part of management. But framing it as "chose to layoff X people instead of paying out a contract to Matthew McConaughey" is misguided.
The bottom line is that Matthew McConaughey did a better job of negotiating his contract than rank and file employees did and that's why he still has a contract. Obviously, he is in a position to argue better terms than rank and file engineers, but that's how this works. If his contract was renewed or reupped on, that would be one thing (and ultimately, that would be something for the board or shareholders to weigh in on), but we don't know the details about how long the contract was for and what the deliverables are, or what the ROI is.
Framing this in "this versus that" terms just doesn't make sense.
I'm not defending the layoffs -- though I think all of us have known that the ever-increasing TC wars amongst big companies was unsustainable and that tech companies over-hired. And none of that is the people who were laid off's fault. At all. These were bad decisions on the part of management. But framing it as "chose to layoff X people instead of paying out a contract to Matthew McConaughey" is misguided.
The bottom line is that Matthew McConaughey did a better job of negotiating his contract than rank and file employees did and that's why he still has a contract. Obviously, he is in a position to argue better terms than rank and file engineers, but that's how this works. If his contract was renewed or reupped on, that would be one thing (and ultimately, that would be something for the board or shareholders to weigh in on), but we don't know the details about how long the contract was for and what the deliverables are, or what the ROI is.
Framing this in "this versus that" terms just doesn't make sense.
> though I think all of us have known that the ever-increasing TC wars amongst big companies was unsustainable
Just wow! What about ever increasing stocks? ever increasing returns on VC funds? You've gotta be kidding.
Just wow! What about ever increasing stocks? ever increasing returns on VC funds? You've gotta be kidding.
Okay, I understand that came across pointing, but I hope you know I'm not pointing at you. I'm pointing at "Market Rate" salary fixing, etc.
And I don't disagree with that! My point is that the increase we saw went beyond salary fixing. I'm talking seeing TC offers that were more than just stock, and often a cash component, in many cases double for the same job/level at the same company over two years. Where you saw people with no experience hired in at rates significantly higher than high-performers who had worked at a company for a number of years.
Do I personally regret not taking some of those insane offers when I had the chance (prioritizing pay over working in a position I know I wouldn't have enjoyed)? Yes, I do. But I also knew in 2021 and even mid-2022 that none of the offers that were going out were sustainable long-term.
Do I personally regret not taking some of those insane offers when I had the chance (prioritizing pay over working in a position I know I wouldn't have enjoyed)? Yes, I do. But I also knew in 2021 and even mid-2022 that none of the offers that were going out were sustainable long-term.
Watching FAANG offers nearly double over two years was not sustainable and anyone who thought that it was is delusional.
Weird thinking all around. The point of advertising is to grow sales. You don't have more money to employ people by selling less product.
Is Matthew McConaughey worth 40-50 laid off salesforce employees in terms of value provided to Salesforce? No idea. Totally possible, though.
The tech hiring build up in 2021 and 2022 was all about political appeasement.
https://trends.google.com/trends/explore?date=today%205-y&ge...
"Big Tech" could not maintain that forever.
https://trends.google.com/trends/explore?date=today%205-y&ge...
"Big Tech" could not maintain that forever.
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Gross. If your company uses sales force, try to encourage them to use something else. Don’t recommend it for anything new. Don’t go work for them. Don’t do anything that would be good for salesforce. Do your best to bring them down any way you can.
They should have hired me instead. I'd have done it for $9M.
Alternate title: I don’t understand why businesses have marketing budgets
Would at least not be objectively false, unlike the current title.
I’m surprised this got upvoted on HN.
Would at least not be objectively false, unlike the current title.
I’m surprised this got upvoted on HN.
8000 people could cost over $1B /yr. That's a totally different scale from paying an A-list celebrity $10M to do some commercials.
The real travesty is dropping the fun Island vibe.
Such stupid clickbait. Yes, Salesforce spends millions on advertising. That advertising brings in revenue. Thats how business works.
Should change title to Mark Benioff is not Hawaiian because I felt that point most well argued.
I agree. Seems like more words spent on the Hawaiian thing than the actual story.
Maggie Harrison (who is definitely not Hawaiian) appropriating Hawaiians’ prerogative to define the bounds of acceptable cross-cultural interaction with their group is actual, destructive appropriation. It’s a white person with a platform co-opting a minority group’s ability to decide how it interacts with the majority group.
I agree with you. But:
Please don't pick the most provocative thing in an article or post to complain about in the thread. Find something interesting to respond to instead.
https://news.ycombinator.com/newsguidelines.html
The article isn't really about Hawaiian culture, nor is the complaint it is making about how Salesforce prioritizes its expenditures.
Please don't pick the most provocative thing in an article or post to complain about in the thread. Find something interesting to respond to instead.
https://news.ycombinator.com/newsguidelines.html
The article isn't really about Hawaiian culture, nor is the complaint it is making about how Salesforce prioritizes its expenditures.
Assuming an average wage of $50k a year, 8k x $50k is $400m a year. Math checks out
After Federal and California taxes, what's it net to McConaughey? $4 million?
You Gotta Pump Those Numbers Up, Those Are Rookie Numbers.
This is just a natural reality of capitalism. Some "workers" produce much more value than others. A coder making 150-200k is completely replaceable, a widely recognized public figure is not. Shouldn't be shocking, whats shocking is that people don't understand this and arent honest with themselves about the value they bring to the workplace
I think why this rings false to many is that McConaughey is definitely extremely replaceable.
If that is already sunk money and they paid it to him before the layoffs than the article is off base.
But why is he at $10M not replaceable by some other celebrity who might do the work for 10x or 100x less? He has no special credibility around anything to do with Salesforce, CRM, or anything in tech.
It's more likely Benioff has a man crush on him and like the fact he gets to hang out with a famous movie star and pretend he's friends with him or something and can conveniently ignore that he's kind of buying a famous friend for $10M.
A really well executed ad campaign with a less famous, less expensive star might be far more effective.
If that is already sunk money and they paid it to him before the layoffs than the article is off base.
But why is he at $10M not replaceable by some other celebrity who might do the work for 10x or 100x less? He has no special credibility around anything to do with Salesforce, CRM, or anything in tech.
It's more likely Benioff has a man crush on him and like the fact he gets to hang out with a famous movie star and pretend he's friends with him or something and can conveniently ignore that he's kind of buying a famous friend for $10M.
A really well executed ad campaign with a less famous, less expensive star might be far more effective.
Yes, I’m sure an actor adds more real value to a SaaS company than engineers do. Recognizable talking heads who read lines into a camera are famously hard to find.
"Real value" is an attempt to draw a distinction where there isn't one.
Kim Kardashian brings in more "real value" to a clothing company than any one seamstress.
Welcome to marketing.
Kim Kardashian brings in more "real value" to a clothing company than any one seamstress.
Welcome to marketing.
And yet a bad seamstress can tank a clothing company if a single bad article of clothing gets into the wrong hands.
This kind of makes Kim K a safer play than a bad seamstress. As unless you go full Kanye a spokesmodel isn't going to tank a company.
This kind of makes Kim K a safer play than a bad seamstress. As unless you go full Kanye a spokesmodel isn't going to tank a company.
A single bad seamstress causing bad clothing to be delivered to customers is a process failure, the same way no single engineer should be responsible for Saleforce's production systems going down. And in most ways, implementing quality control on your product is a lot easier than controlling the personal life of your spokespeople.
Any company that's paying $10M to a spokesperson will have (maybe I should say "should have") a lot of employees dedicated to that spokesperson and the campaign. They might have a clawback clause if the spokesperson shows bad judgement, and can also get some additional good marketing if they are proactive in distancing themselves from their Kanye-esque spokesperson.
So I guess, like you say, there is a quality control process regardless.
I think the larger issues are probably the decisions of the pre-seamstress process employees. Bad choices in materials or cost-savings measures can turn off customers.
So I guess, like you say, there is a quality control process regardless.
I think the larger issues are probably the decisions of the pre-seamstress process employees. Bad choices in materials or cost-savings measures can turn off customers.
If an actor can directly bring more revenue to the business than an engineer then yes, they are adding more real value.
given the hype-driven nature of our industry, that may well be the case.
Probably does. Most engineers are fungible
> whats shocking is that people don't understand this and arent honest with themselves about the value they bring to the workplace
The labor theory of value[1] is still a very popular belief. Even though it doesn't work very well if you poke it at all.
---
1. https://en.wikipedia.org/wiki/Labor_theory_of_value
The labor theory of value[1] is still a very popular belief. Even though it doesn't work very well if you poke it at all.
---
1. https://en.wikipedia.org/wiki/Labor_theory_of_value
I think people understand it, I just think they rightfully don't care that much. They care about their income, not the particular set of justifications the powers-that-be have for their organizational schemes.
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Capitalism creates these situations but what should be talked about is disincentivizing them not that we should accept them. That is enough money for 100 workers to not be laid off for an entire year. Merits a discussion on how much value he’s actually creating. Same goes for CEOs getting paid many millions.
It's not possible to predict if this is a good call or not. At the end of the day, it will come out in the wash, and you can make a pretty penny betting correctly.
I'm going to assume no one here thinks this decision is so foolish that it will single handedly bring about the fall of Salesforce.
As soon as you stray into the land of "we should make this decision on Salesforce's behalf", you're straying into a "known-unknown", and acting as if it's obvious what the correct decision is is always the downfall of those who seek to plan society according to their morality.
If you said "I accept that I don't know if this was a good move for generating profit or not, but I still don't think it should be allowed", I might be more inclined to entertain the idea!
I'm going to assume no one here thinks this decision is so foolish that it will single handedly bring about the fall of Salesforce.
As soon as you stray into the land of "we should make this decision on Salesforce's behalf", you're straying into a "known-unknown", and acting as if it's obvious what the correct decision is is always the downfall of those who seek to plan society according to their morality.
If you said "I accept that I don't know if this was a good move for generating profit or not, but I still don't think it should be allowed", I might be more inclined to entertain the idea!
You are having a straw man argument I think. I said it merits a discussion and seems highly unethical. I have to disagree that there are appropriate situations where society should allow unethical situations to occur, unless they are extremely necessary, as that creates an unethical society which is dystopian. My way of phrasing that is that society should highly disincentivize unethical situations.
If it turns out that his being a spokesman provides enough sales to employ 1000 people would that also be unethical?
I have no insider knowledge of the inner working of salesforce but I can reasonably surmise that they aren’t paying him to literally sit around.
I have no insider knowledge of the inner working of salesforce but I can reasonably surmise that they aren’t paying him to literally sit around.
No that would be great but I think it’s very difficult to quantify, in an objective way, how much value a spokesperson or CEO brings. That’s the real head scratcher.
This was my entire point - it's actually exceptionally easy to quantify, in an objective way. CRM stock price! If the distributed decision making system that is the market decides this was or was not worth it, based on all available information, then we will know!
Maybe they can employ people to track metrics to determine the effectiveness of sales campaigns and CEO?
You can wax philosophical all day, but nobody is mentioning the downfall of Salesforce.
People aren’t arguing against the merit of advertising. The argument is against the specific case of a massive, already well-recognized and widely-integrated SaaS company paying a specific actor 10 million, while doing layoffs, and the benefit that actor brings versus those laid off.
If Salesforce just started, maybe the name recognition would make sense. My personal belief is that the company is too big already for it to matter. I also don’t think middle-aged CEO’s understand marketing as well as they think: every A-list celebrity advertising campaign I can think of has, from the outside looking in, appeared to go poorly (eg Coinbase).
People aren’t arguing against the merit of advertising. The argument is against the specific case of a massive, already well-recognized and widely-integrated SaaS company paying a specific actor 10 million, while doing layoffs, and the benefit that actor brings versus those laid off.
If Salesforce just started, maybe the name recognition would make sense. My personal belief is that the company is too big already for it to matter. I also don’t think middle-aged CEO’s understand marketing as well as they think: every A-list celebrity advertising campaign I can think of has, from the outside looking in, appeared to go poorly (eg Coinbase).
Either you're wrong, or you're a marketing genius who's perspective and ideas can change the industry. If it's the former, a lot of highly paid people aren't idiots. If it's the latter, you should probably go out there and change the world!
Ah yes, anyone upset that their employer’s layoffs cite financial reasons while objectively wasting money is “shockingly” ignorant to capitalism! Luckily the enlightened fdsg has brought it to our attention!
Without knowing what any of them did, it’s obvious that none of them, nor in aggregate, brought any near the value to Salesforce as did one aging celebrity.
Anecdotally, I’ve never seen anything associating the actor with Salesforce in any capacity. Even those I know at the company didn’t know he advertised for them. (But capitalism!)
Without knowing what any of them did, it’s obvious that none of them, nor in aggregate, brought any near the value to Salesforce as did one aging celebrity.
Anecdotally, I’ve never seen anything associating the actor with Salesforce in any capacity. Even those I know at the company didn’t know he advertised for them. (But capitalism!)
I think another lens to view this through, is a company that mismanaged their budget has two more glaring examples of mismanaging their budget.
Ah yes, the smoke-and-mirrors part of capitalism, the style-but-no-substance, image-above-competence, the elitism and cronyism part straight out of Adam Smith.
"That's capitalism, guess y'all gotta suffer while ten people add to their hoards, nothing we can do"
I'm not condoning it, just pointing out how society works
I’d also point out that non-capitalist systems don’t actually correct this problem in practice, they just change the means by which wealth is acquired (usually violence).
It's ultimately violence in a capitalist society too (what do you think the police are for?). It's certainly possible to achieve a fairer distribution of wealth than capitalist societies produce.
And before the inevitable replies: no, I'm not advocating for communism. I'm advocating for non-capitalist variants on market economies.
And before the inevitable replies: no, I'm not advocating for communism. I'm advocating for non-capitalist variants on market economies.
Sure, all things can be improved, and I know we don’t live in anywhere near a utopia (education, retirement ,healthcare, tort reform, all needed), but I get uncomfortable with the tone that we’re consciously choosing a bad system when the reality is that peacefully refactoring power structures and society is just hard.
> I'm advocating for non-capitalist variants on market economies.
I'm struggling to think of a good example of a current non-capitalist market economy. Do you have one in mind? Or are you advocating for something not yet successfully created?
I'm struggling to think of a good example of a current non-capitalist market economy. Do you have one in mind? Or are you advocating for something not yet successfully created?
As the sibling suggests, somewhere like Sweden is probably closest. But yes, I'm advocating for something not yet successfully created (or even attempted as far as I'm aware).
That is interesting, thanks for sharing your viewpoint. In that case, I agree with you, at least insofar as I very much want to see more social democracy in the US than we currently have. But I think it would require the citizens to have a great deal more trust in gov't than we currently have, so not anytime soon.
Some people argue that social democracy (eg Sweden), as a real welfare state, is distinct from capitalism.
Is it so crazy to assume McConaughey may enable more business through his influence than 8,000 employees combined?
If true, then it is justified by the argument Benioff put forward and that this article seems to also agree with.
If true, then it is justified by the argument Benioff put forward and that this article seems to also agree with.
To put this into perspective, assuming the average salary of the 8k employees is $125,000, that would only save 80 jobs.
The cost of employing someone is roughly double their salary, once bonuses, benefits, payroll taxes and overheads are considered.
Plus for many companies, RSUs can be an additional significant fraction or even multiple of base salary.
So it's a lot of money, but would pay for fewer jobs than you might think.
It's also possible - I have no idea - that the marketing featuring McConaughy made more money in new sales than it cost. I assume this was the expectation for the deal.
Plus for many companies, RSUs can be an additional significant fraction or even multiple of base salary.
So it's a lot of money, but would pay for fewer jobs than you might think.
It's also possible - I have no idea - that the marketing featuring McConaughy made more money in new sales than it cost. I assume this was the expectation for the deal.
> The cost of employing someone is roughly double their salary, once bonuses, benefits, payroll taxes and overheads are considered.
This is for a good job. Temp agencies often pull about 30% of the total payment for each temp and permatemp they employ at another company. And they make a profit off of that overhead.
And I don't know about the jobs at Salesforce, but I find it odd that the person you're replying to assumed an average $125k per job. That's a really nicely compensated job, even if the $125k is total compensation, not just salary.
This is for a good job. Temp agencies often pull about 30% of the total payment for each temp and permatemp they employ at another company. And they make a profit off of that overhead.
And I don't know about the jobs at Salesforce, but I find it odd that the person you're replying to assumed an average $125k per job. That's a really nicely compensated job, even if the $125k is total compensation, not just salary.
Temp agencies have very low overheads. They aren't even paying for the electricity and toilet paper their placements consume at work, let alone medical insurance.
Glassdoor says $138K base and $184K total comp at Salesforce for a SWE, with Senior SWE 10% higher.
Glassdoor says $138K base and $184K total comp at Salesforce for a SWE, with Senior SWE 10% higher.
From their 10k filing it looks like an average of $255k total expenses (including rent, etcetera) per employee.
https://news.ycombinator.com/item?id=35000125
https://news.ycombinator.com/item?id=35000125
Keep in mind fully loaded cost is approximately 2x salary. So maybe 40 jobs.
Can you cite this figure? I'd like to know where the additional funds go for an average employee. Is this including things such as material expenses (photocopy paper, utility bills, etcetera)? Because that's the only way I could imagine the 2x happening. And this will have huge variation depending on the type of job.
The biggest overhead costs are: 1) employee health insurance 2) employment taxes 3) employee benefits like 401K matching 4) real estate costs for offices. Photocopy paper isn't even a rounding error on a rounding error.
In a production job like mine consumable costs are huge.
- Federal taxes,
- health insurance,
- 401k matching,
- other benefits big corporate SaaS companies offer,
- office space
It used to be 1.5x. And I was just wondering where the 2x came from. The non-office space expenses for me add up to maybe an additional 40%. If I was in a better health plan it might theoretically go up to 50%. Tack on expenses for the non-pension retirement plan manager and HR jobs to support employees and I can maybe get to 1.6x. But 2x+ doesn't happen until factoring in consumable and other expenses needed for my job. So I think that has to be a big part of it.
Feel free to use 1.5x, I just made up 2x. Either way, 125k/dev seems low.
Most of their employees are of course not devs, and some of the non-dev roles have greater salaries, while some are baristas.
I looked up their most recent 10k filing: https://s23.q4cdn.com/574569502/files/doc_financials/2023/q4...
From: https://investor.salesforce.com/financials/default.aspx
For the 3 months ending in January 31 2023 page 6 has $5.927 billion in operating expenses. Subtract out the $0.828 billion in restructuring costs for $5.099 billion in above the line expenses. For about 80,000 employees this means about $255,000 in expenses per employee.
I've never read a 10k before so I hope I'm doing it right.
Assuming all of those expenses go away with the employee (which will obviously not be the case), laying off 8,000 employees would save an average of about $2 billion per year.
This is the big takeaway from the 10k filing, and I wonder if it changed in the last two months: "Announces Share Repurchase Program increased to $20 billion".
I looked up their most recent 10k filing: https://s23.q4cdn.com/574569502/files/doc_financials/2023/q4...
From: https://investor.salesforce.com/financials/default.aspx
For the 3 months ending in January 31 2023 page 6 has $5.927 billion in operating expenses. Subtract out the $0.828 billion in restructuring costs for $5.099 billion in above the line expenses. For about 80,000 employees this means about $255,000 in expenses per employee.
I've never read a 10k before so I hope I'm doing it right.
Assuming all of those expenses go away with the employee (which will obviously not be the case), laying off 8,000 employees would save an average of about $2 billion per year.
This is the big takeaway from the 10k filing, and I wonder if it changed in the last two months: "Announces Share Repurchase Program increased to $20 billion".
But that's all expenses, not just direct employee costs. Like Salesforce buys an ad in the Superbowl, or spends money on Google ads, or buys electricity for its datacenters, etc.
Yeah, I know. I couldn't find an employee costs line. The best I could find was a stock options line.
Taxes, healthcare, social security, free massages and lattes?
> that would only save 80 jobs
for one year
for one year
People really hate that. Also the secretary is not a fan that their CEO does indeed provide 4000x the value.
CEO is in the unique position of being capable of providing 4000X the value, due to being a force multiplier on the entire company (It’s the job they hold, not skill, that makes it impossible for a random secretary to have as much value to a company). On one hand, this means it is indeed worth paying a lot of money to get the best CEO you can, as small differences in skill have outsized influences on the end result. On the other hand, even the CEOs who are of neutral or negative value compared to someone you could pay 10X less still get paid 4000X more than the secretary.
Anyway, long way of saying than general salaries are a race to paying as low an amount as you can to get someone of the needed skill, while CEO salaries are about paying more than strictly necessary due to the effect even a small difference has from your biggest productivity multiplier. And given that most people will never have the opportunity to enter a role where their pay starts being calculated that way, it’s unsurprising they find it unfair (even if it’s logical).
Anyway, long way of saying than general salaries are a race to paying as low an amount as you can to get someone of the needed skill, while CEO salaries are about paying more than strictly necessary due to the effect even a small difference has from your biggest productivity multiplier. And given that most people will never have the opportunity to enter a role where their pay starts being calculated that way, it’s unsurprising they find it unfair (even if it’s logical).
I think that's a good point. I also think another way to look at it would be to actually understand their marketing and sales spend and look at what this cost represents.
If they've ceased all marketing and just hope MM will take up the slack, it might be a dumb move. If they have too many software or back office or whatever people, the decision to let them go is completely decoupled from what they spend on marketing. It's not an either / or, it's different part of the business entirely.
If they've ceased all marketing and just hope MM will take up the slack, it might be a dumb move. If they have too many software or back office or whatever people, the decision to let them go is completely decoupled from what they spend on marketing. It's not an either / or, it's different part of the business entirely.
There's also little value in pushing this clickbait style journalism to the front page.
First of all, it is objectively incorrect:
> Per the WSJ, the company will be letting go of 8,000 members from its massive workforce
The layoffs they are referring to happened in early January. They are not laying off another 8000 employees.
Beyond that, they paid an A-list actor $10M out of their marketing budget not to "sit around" but to do a set of commercials (one of which aired at the Superbowl). Considering they exceeded all analyst expectations for revenue and profits in the last quarter, it's safe to say that some of their effort is working. Enlightened engineers don't like to admit it, but advertising works, and is a critical part of running any business.
The fact that they also decided that 8K out of the 25K+ employees hired during the pandemic were redundant has nothing to do with Matthew McConaughey.