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These articles are always written with a not so subtle level of schadenfreude by the author. When companies cut costs they basically have a choice of reducing

These articles are always written with a not so subtle level of schadenfreude by the author. When companies cut costs they basically have a choice of reducing COGS, reducing overhead, reducing compensation per employee, or reducing the number of employees. Most software companies have relatively low COGS so there isn't much to cut there. Reducing overhead (office space, events) is the least painful. Cutting peoples' salaries is basically impossible, so the only lever there is holding back bonuses. Depending on the company that may be a big cost saver. The last option is laying people off. Given those are the only options cutting overhead is the nicest thing to do. Why is that a bad thing?

iofj 10y ago
From the perspective of an ex-cisco employee, two main reasons: 1) Because it never ends at cutting overhead. In fact it would be quite accurate to say it never ends. I still have contacts with cisco employees and the fear of mass-layoffs has gotten worse every year, I am told since 2001 (I wasn't yet an employee in 2001). When the "overhead" in my office was visibly cut, I thought like you did, it was a mistake. Firstly, I should have immediately found another job. Granted it took another year and a half, but I could have done far better, even with just a bit of preparing. I thought I'd work forever at cisco. In retrospect that was a very, very bad assumption to make. Secondly, I should have taken my employment contract to a lawyer. Because they fucked me on severance, stock options, and a few other things. You see, paying employees, especially during mass-layoffs, definitely is something they maximally cut (even to the point of probably being illegal). 2) Because top level managers keep making things worse. At cisco, the specific thing that made me really angry was that we could no longer book our own flights. We had to use the company travel agency. Then you find out what really happened: senior management was told they could no longer expense first-class flights for their entire family. So what did they do ? They went to a particular airline, and negotiated a deal : free first class flights for them (meaning at sub-business prices), if everyone at cisco would fly economy and business only with that airline. Mind you, this was the one that made me blow up, it was far from the only thing.
gaius 10y ago
One company I worked for was very big on breakfast meetings. You would grab a muffin and a coffee, then go listen to some VP waffle about something. One day, the muffins were all sliced in half, and a sign up to only take one half each. Not long after that the company laid off 6000, including me. Pay attention to these early warning signs, is my advice.
nc 10y ago
A wise ex-trader once educated me about the FITH (Food in the hallway) index. One internal measure of a companies performance. Seems like the FITH index is on a downward trend at Dropbox.

iofj 10y ago

From the perspective of an ex-cisco employee, two main reasons: 1) Because it never ends at cutting overhead. In fact it would be quite accurate to say it never ends. I still have contacts with cisco employees and the fear of mass-layoffs has gotten worse every year, I am told since 2001 (I wasn't yet an employee in 2001). When the "overhead" in my office was visibly cut, I thought like you did, it was a mistake. Firstly, I should have immediately found another job. Granted it took another year and a half, but I could have done far better, even with just a bit of preparing. I thought I'd work forever at cisco. In retrospect that was a very, very bad assumption to make. Secondly, I should have taken my employment contract to a lawyer. Because they fucked me on severance, stock options, and a few other things. You see, paying employees, especially during mass-layoffs, definitely is something they maximally cut (even to the point of probably being illegal). 2) Because top level managers keep making things worse. At cisco, the specific thing that made me really angry was that we could no longer book our own flights. We had to use the company travel agency. Then you find out what really happened: senior management was told they could no longer expense first-class flights for their entire family. So what did they do ? They went to a particular airline, and negotiated a deal : free first class flights for them (meaning at sub-business prices), if everyone at cisco would fly economy and business only with that airline. Mind you, this was the one that made me blow up, it was far from the only thing.

gaius 10y ago

One company I worked for was very big on breakfast meetings. You would grab a muffin and a coffee, then go listen to some VP waffle about something. One day, the muffins were all sliced in half, and a sign up to only take one half each. Not long after that the company laid off 6000, including me. Pay attention to these early warning signs, is my advice.

nc 10y ago

A wise ex-trader once educated me about the FITH (Food in the hallway) index. One internal measure of a companies performance. Seems like the FITH index is on a downward trend at Dropbox.