20 ms·

Buffer Layoffs

593 points by aarondf 10y ago

GBond 10y ago
OT: I stopped using Buffer since they've imposed limits on the free accounts. Any suggestions for alternatives?
- bdcravens 10y ago
  Is this for a non-profit or a personal project? Or social marketing for something that can make money?
smuss77 10y ago
I really like the transparency and accountability. Two questions: Why are the two loans necessary? And, how does a loan get counted as savings? > Leo and I are committing $100k each in the form of a loan at the lowest possible interest rate, with repayment only when Buffer reaches a healthy financial position. Savings: $200,000.
- beambot 10y ago
  It shows founder commitment -- a willingness to put their own personal savings at risk to help the company survive. It's "savings" in the penny-saved, penny-earned sense.
  - dhbanes 10y ago
    A penny saved is not a liability, it is an asset.
pbreit 10y ago
I have mixed emotions with Buffer's shtick. On the one hand there's something fresh and unique about it. On the other, I think: just put your heads down and get to work serving customers! I'm guessing the main benefit of the open-ness is marketing. I doubt it helps the company much beyond that.
- spitfire 10y ago
  Well, except for hiring. When they get to that again. Sometimes just vocalizing things came lead to new insight. I like their approach, minus the salary transparancy.
  - imron 10y ago
    > When they get to that again. Looks like they're still hiring: https://buffer.com/journey/full-stack-developer https://buffer.com/journey/full-stack-developer
    - simonswords82 10y ago
      > Looks like they're still hiring: https://buffer.com/journey/full-stack-developer https://buffer.com/journey/full-stack-developer Yeah that's what I was going to say, there's a link to the we're hiring page on the new salary formula spreadsheet: https://docs.google.com/spreadsheets/d/1l3bXAv8JE5RB9siMq36-Ogngks2MT6yQ5gt8YXhUyAg/edit#gid=1533208969 https://docs.google.com/spreadsheets/d/1l3bXAv8JE5RB9siMq36-...
  - galistoca 10y ago
    Same logic goes for hiring. If you need to use this kind of gimmicky tactic--which is obviously bad for the company in the long run--to find new hires, it probably means you need to focus more on the core product to turn it into something that is naturally attractive for potential employees.
joosters 10y ago
"We had just come out of a long experiment with self-management, where we fully leaned in to ..." What on earth does 'fully leaned in' mean? It's not the greatest of metaphors, I pictured someone falling on their face.
- mildbow 10y ago
  Love this comment. Because that's what happened. Maybe it's a cautionary tale supported by another meme -- never go full retard. But they got up and seem to be dusting themselves off. So kudos for showing transparency when they mess up (which is when commitment to transparency actually means something).
adwf 10y ago
Ouch. Never a pleasant thing to do. I just hope they made the cut deep enough. A common mistake is to cut enough to just get back to break even, when what you really need in that situation is to get back to a decent level of profitability. The number of times I've seen a second round of layoffs because people got that wrong... From the looks of their projections, they've done the right thing, back to profitability and growth.
kumarski 10y ago
They have some pretty tough competition now. https://www.socialchamp.io/ https://www.socialchamp.io/ for example is one that is growing rapidly. I can only imagine that it may become a commodotized space w/ little differentiation.
deleted 10y ago
[deleted]
eropple 10y ago
> Reflecting on it now, I see a lot of ego and pride reflected in that team size number. This is one of the worse diseases I see in the tech world. I have friends who, when asked how their company is doing, respond with something like "great! We just hired a dozen more engineers." I'm pretty sure a better answer is "great! We just got X customers," or "great! We're profitable now!". Not how big your fief is. (But, mentioning fiefs, I'm struck by the notion that a startup is just a business unit of a loosely-organized corporation and CxOs thereof just middle managers for an investor-class executive group.)
Fiahil 10y ago
Are we seeing these event more frequently than before or is it just a matter of perception? Anyway, despite being a tough time for them; it's good to know they live in reality and not in a "unicorn-themed-chase-party".
swagv 10y ago
Pffft. I've laid off 10 people in my sleep in past startups
k-mcgrady 10y ago
I'm curious as to why they had 94 employees. That seems like an insanely high number for a company that does something pretty basic (not dumping on the product, I like it and have used it in the past). What are all of those people doing?
- vox_mollis 10y ago
  Par for the course. TWTR has nearly 4000 employees. Twitter. Human organizations always scale to accommodate available resources, not required functionality.
  - Rezo 10y ago
    WhatsApp famously has 55 employees and over a billion monthly active users. That should be the role model for today's startups! I think it's conceivable the reason you don't see much innovation from Twitter for years now, is that they have the organizational equivalent of traffic gridlock. It's simply impossible to get anything done with that many stakeholders.
- BenoitEssiambre 10y ago
  As part of a company of less than 30 in a rural region, I get that feeling a lot. I'm sure I'm wrong but what do 57000 google employees do!? Am I really hitting an immense mechanical turk when I use google? Yet they can't spare a single person to spend a few weeks to convert the flash off of google finance?
  - jpm_sd 10y ago
    Kind of, yes! You would not believe how much manual labor goes into maintaining and load balancing data centers and keeping deceptively simple-looking services up and running... There has been some recent press on the work done by legions of SREs that gets into a few of the details.
    - BenoitEssiambre 10y ago
      I dunno we are 3 software devs, 2 network admins (also playing the role of top tier level, on call support) and run our own bare metal servers in two geographically separated collocation data centers. We also have 2 device hardware/firmware guys and the CEO also does a bit of coding sometimes. Our solutions are sometimes a bit clunky but our infrastructure is audited yearly by an outside firm and certified to carry banking data through the wireless device we designed and through our network. There is another 15-20 people doing financials, payroll, hr, tech support, sales, marketing, assembly, hardware testing, shipping etc.. We maintain multiple backend interfaces to a bunch of (sometimes old and archaic) bank networks and to our wireless devices as well as multiple front end portals for our users. It's hard to imagine ever being able to make use of 57000 bodies, but I suppose that's a totally different context. We could use a few more.
minimaxir 10y ago
While Buffer's transparency is incredible, the financial calculations in the article fail to account for the possibility of an employee exodus domino effect, especially after both knowing the financial state of the company, and relevant perks being cut.
- Animats 10y ago
  Right. In general, if you have a layoff and the job market isn't extremely tight, you will also lose some other employees you wanted to keep. Especially the ones who see that top management's plans aren't working and it's time to jump ship.
- toomuchtodo 10y ago
  Is it possible to stem an employee exodus when fully transparent? I don't think so. It only works when there's a level of information asymmetry.
  - st3v3r 10y ago
    I think it is, unless your situation is so terrible where you don't think you'll be around in 3-6 months.
  - dasil003 10y ago
    I don't follow your thinking at all. You're assuming that the truth is always so horrible that management can never fully reveal it, and your not accounting for the whiff of secrecy and gossip that can be much worse than the actual withheld information.
    - toomuchtodo 10y ago
      Perhaps its because I've been at more failed companies than most? Regardless of transparency vs secrecy, you reach a tipping point where the situation "feels" dire enough that employees leaving accelerates. I'm sure it depends on the demographics of the org, employees with families, mortgages, etc are willing to stick out volatility far less (in my experience) than employees with no obligations. Anecdotal of course! I'd love to have more data on this to find out what that tipping point is.
bitrotburner 10y ago
I was really shocked to see how little Buffer paid when they started their "open" thing, so I'm surprised that they're not a lot more profitable.
danso 10y ago
FWIW, here's their public spreadsheet of salaries and calculations. Not sure if it's been recently updated (on closer look, seems to reflect the founders' stated pay cuts, and new hires as recent as last month): https://docs.google.com/spreadsheets/d/1l3bXAv8JE5RB9siMq36-Ogngks2MT6yQ5gt8YXhUyAg/edit#gid=1533208969 https://docs.google.com/spreadsheets/d/1l3bXAv8JE5RB9siMq36-... edit: Adding links to their blog posts: https://open.buffer.com/transparent-salaries/ https://open.buffer.com/transparent-salaries/ https://open.buffer.com/introducing-open-salaries-at-buffer-including-our-transparent-formula-and-all-individual-salaries/ https://open.buffer.com/introducing-open-salaries-at-buffer-...
- dsacco 10y ago
  I admire Buffer for being so transparent with their salaries, but I don't think I would ever decide to work for a company that mandated it. In my (admittedly limited) experience, mandating salary transparency tends to increase the salaries of low performers and reduce the salaries of high performers. It usually eliminates the potential for negotiating raises and poses difficult questions about paying some employees more than others in the same band. Case in point: according to Buffer's salary calculator[1], a "master" (their highest rank) backend developer living in San Francisco and optimizing for salary over equity would earn about $155,000/year. I can't think of any definition of "master" developer that could be competitive for. Friends of mine at AmaGooBookSoft and even other startups have earned nearly double that for being merely "senior" (L5). [1]: https://buffer.com/salary?r=1&l=10&e=3&q=1 https://buffer.com/salary?r=1&l=10&e=3&q=1
  - nilkn 10y ago
    The $155k salary might be due to the transparency, but could it also be due to a simple inability to pay developers $300k+? That's well over double the CEO's salary. I think it's clear they simply don't have the revenue and cash reserves to pay developers that kind of money. I suspect you'll find this to be true at a lot of smaller startups that rely on actually making money instead of fundraising.
    - jsprogrammer 10y ago
hobo_mark 10y ago
I certainly appreciate their openness, and like to follow their progress, but... ...could anyone explain to this naive commenter how it takes 90 (80 for that matter) people to run essentially a 'cronjob as a service' business?
- shemnon42 10y ago
  crontab is the easiest part. It's the integration to the moving targets that are social media APIs that you are paying for.
- jdavis703 10y ago
  At my company we had non-technical staff that had to update a YAML file to post editorial content to the homepage and mobile apps. For an engineer, IT person, etc, this is trivial. Not so for other people. I had to spend so much time supporting this I replaced it with Contentful (an API-based CMS). These are the kind of pain points that companies like Buffer try to solve.
- Arcsech 10y ago
  Let's do some simple estimation! I haven't really looked at their spreadsheet, so this is just guesswork. The product is fairly simple technologically yes, but the value is provided by making it easy to use so the customer saves time (= money). To do that you need a few UX people plus some developers (especially with web and mobile apps), call that 15 engineers/designers total, plus another 5 for ops. Now you need a sales team since your real money will be in selling to enterprises - call that 15 people. And on top of that you need customer support, and call that another 20 people. Now that we're up to 55 people, we need another 10 people worth of HR and 5 bean counters, that takes us to 70. Now cap it off with 10 managers/executives and we're up to 80, and I'm sure there's some things I was off about or forgot. It's easy to forget about all the non-engineering resources you need for a medium-sized business.
  - joshdickson 10y ago
    If anyone reads this comment, FYI it is not remotely accurate. They have 23 just in engineering and 6 designers, with 2 in ops. We have AWS and these guys have incredibly run of the mill needs, why on earth would you need 1 ops person for every 3 developers... They have nobody doing what you'd classify as a "sales." They have some marketing people, people doing whatever "customer research" is, a number of people working in "community" and a bunch working in customer success.
beat 10y ago
This reminds me of Ben Horowitz' The Hard Thing About Hard Things, where he talked about implementing a plan to lay off 90% of his company in complete secrecy, for fear of employee exodus and loss of customer confidence. But that was a very different situation than Buffer is in now, as it happened during the original dot-com era collapse. Kudos to Buffer for their approach to transparency. I think it will actually serve them well here.
ctvo 10y ago
>> We canceled our upcoming team retreat to Berlin. Savings: $400,000. Compared to all their other costs that one stood out the most. 500k savings laying off 10% of your workforce compared to 400k for a team retreat in Berlin. Is this typical?
- deleted 10y ago
  [deleted]
- jacquesm 10y ago
  One-off versus monthly recurring.
- ndiscussion 10y ago
  That does seem astronomical. $4,000 per employee if they have ~100 employees like they say. Anyone think their salaries are absurdly high for some locations and positions? They've got Adnan working as an "Advanced Backend/Frontend Developer" in Sri Lanka, making only $65,104. This actually makes sense to me because Sri Lanka's cost of living is pretty low. But they've got an Advanced "Happiness Hero" which I presume is an email support role making $77,397 in Kentucky. Last time I checked, $77,000 is an extraordinarily high salary in KY, especially for someone doing email support.
  - SystemOut 10y ago
    That's assuming what they do is straight e-mail support. I'm not sure what a happiness hero does but they might be expected to do much more than e-mail support. In many companies the "success manager" role tends to require people with more education and technical background to do in-depth troubleshooting and real customer interaction.
  - hammock 10y ago
    $4,000 would barely cover business-class airfare between SF<->Berlin for one employee. Not to mention accommodations, event space, meals and entertainment.
    - 10y ago
deleted 10y ago
[deleted]
ovrdrv3 10y ago
What does buffer do as a company?
- CPLX 10y ago
  Social media marketing automation
  - bbcbasic 10y ago
    Socially Positioned Automated Marketing?
- mehta 10y ago
  I had the same question. I clicked on a few links that I thought would lead to the product description but they didn't. Eventually I realized that the domain was open.buffer.com. Once you go to buffer.com, you see the product description. From the homepage: "The best way to drive traffic, increase fan engagement and save time on social media."
- snissn 10y ago
  I hadn't know what they did either, but their homepage makes it abundantly clear: https://buffer.com/ https://buffer.com/ They let companies and individuals manage & schedule social media posts across a few of the main platforms (At the risk of doing them a disservice in my explanation, but also saving whoever reads this a click).
- pg_is_a_butt 10y ago
  create resentment over compensation and lay people off it seems.
selectron 10y ago
Good for them for being transparent even when the company is struggling, but if I was an employee at the company I would be worried. The chart they provide of Buffer bank balance over time seems overly optimistic. It looks like they assume that the employees they fire added no value to the company - they assume the company will generate the same revenue even after cutting 10% of their employees. This is wrong, and would worry me greatly that the founders don't seem to recognize this. Of course I would be worried anyway because laying people off at a start-up is a really bad sign, anyway you try to spin it.
compiler-guy 10y ago
This may be a little cynical but: "With our culture of bringing our whole selves to work and seeing team as family, with shared values we live by,..." In the American business world, you are an employee until you aren't. Confusing being an employee with being "family" is a mistake, both for the company and the employee. When times get bad, companies do what it takes to survive, including throwing employees overboard. That's just a fact. Buffer may have thought it was different, but that flow-chart of how they decided who to layoff was entirely about how an employee can help the company, not how the layoff would affect the employee. That's not how normal families make decisions. I have no problem with any of that, but anyone who thinks that way has another thing coming. All of this isn't to say that Buffer was thoughtless or callous in how they handled it. From the outside, it looks like one of the better handled layoffs I've seen. But still. Don't confuse your job with your family. It's a business relationship that is only maintained as long as it is in both side's interest to do so.
- justinzollars 10y ago
  The most money I ever made was with a group of fellow startup friends, who I considered my family. Being a career warrior might work for you, but that idea worked for us.
  - harryh 10y ago
    I'm glad it worked out for you. That's great. But what would you have done if one of those friends had stopped coming to the office. Or just did bad work. Would you have let them stay on forever or would you eventually have fired them? That's the difference between family and a team.
    - justinzollars 10y ago
      let me point out too many people have the down vote. This place is turning into stackoverflow.
- jc4p 10y ago
  This is so 100% on point. I think the Netflix NYT article from yesterday had a more realistic tone regarding the "family" aspect: http://www.nytimes.com/2016/06/19/magazine/can-netflix-survive-in-the-new-world-it-created.html http://www.nytimes.com/2016/06/19/magazine/can-netflix-survi... > The key concept is summed up in the 23rd slide. “We’re a team, not a family,” it reads. “Netflix leaders hire, develop and cut smartly, so we have stars in every position.” Your last sentence here is really important. If that's the mindset a person is in, when a business-centric action happens they won't feel as betrayed. Trust me, feeling betrayed while also fully logically knowing you shouldn't feel betrayed because it's a corporation in a capitalist ecoystem is such a bad feeling.
hkmurakami 10y ago
>In short, this was all caused by the fact that we grew the team too big, too fast. We thought we were being mindful about balancing the pace of our hiring with our revenue growth. We weren’t. >Reflecting on it now, I see a lot of ego and pride reflected in that team size number. > In many areas, we grew the team more than was truly necessary for the time, more than was clearly validated. I feel like we all experience this pull by vanity metrics, ego, etc. The level of honestly we've seen in this post will hopefully serve as a reality check for many of us. >Both Leo and I have taken a salary cut of 40% until at least the end of the year. Savings: $94,000. >Leo and I are committing $100k each in the form of a loan at the lowest possible interest rate, with repayment only when Buffer reaches a healthy financial position. Savings: $200,000. This is an attitude and decision I saw made by the C-level during the financial crisis at a company with hundreds of employees. The C level took home $0 in pay and the staff took at 40% until they made it back to profitability, in order to avoid laying anyone off (this is Japan where reemployment would be incredibly difficult). It shows maturity and commitment to the organization (i.e. your people) that is rarely seen these days in startup land. Much respect.
- vegabook 10y ago
  Was just going to post at a higher level, but your comment nails it. These guys are feeling the pain. It's clear. There is honesty going on here - I feel a lack of cynicism from the post, real soul searching, and for that, I can mitigate the otherwise knee-jerk negativity to the managers that I usually feel on layoff justification posts. Reality is hitting people. The market is slowing. Tough choices. No forgiveness for not having seen it, and for hurting the laid off people, but at least I see a genuine search for reasons and genuine empathy. Good post, under the circumstances. Here's hoping that the wisdom on display will serve this company well.
- deleted 10y ago
  [deleted]
OliverJones 10y ago
> Leo and I are committing $100k each in the form of a loan at the lowest possible interest rate, with repayment only when Buffer reaches a healthy financial position. Savings: $200,000. Oops. This isn't savings. It's high-priority debt. Investors really want to invest in the future of the company, not the past. If these guys want to serve their company, they'll (a) write this off their personal books, considering it an unrecoverable cost. (b) convert it from debt to some kind of warrant giving them the right to recover it from profits at some point in the future. Who's advising these guys?
- jea 10y ago
  People who know about tax law apparently.
  - robhunter 10y ago
    I was wondering about that - they already took out $1M each in the last fundraising round at all - why draw a $200K+ salary and give half of it to taxes when you've already got plenty in the bank?
dmitrygr 10y ago
"We made 10 layoffs in order to recover to a healthier financial position. Savings: $585,000" so these people cost the company $58,500 apiece (this is incl. their benefits, insurance, etc). Meaning their salaries were, what? $40k? wow?
- alainv 10y ago
  If you read further, they clarify that's 585k through the end of the year. So factor in a termination package for them and the 585k is less than half of their yearly salary, so they were likely at or above 100k/yr each. Makes a bit more sense.
- lazyjones 10y ago
  Unlikely; that's probably the amount they would have spent until they'd have run out of money (in 5 months). They don't have any $40k salaries AFAICT (it's all public). Lowest salary was "junior happiness hero in Manila/Delhi/Hanoi" at $45k: https://open.buffer.com/introducing-open-salaries-at-buffer-including-our-transparent-formula-and-all-individual-salaries/ https://open.buffer.com/introducing-open-salaries-at-buffer-...
- RyJones 10y ago
  For half a year, so times two
ryanmarsh 10y ago
Company lays off 10,000 people: "restructuring" This guy lays off 10: heart felt apologies and deep moment of reflection Criticize away HN, while he still has his humanity.
nodesocket 10y ago
This is a bit surprising. Buffers revenue has been solidly growing (up 23% in the last 6 months) with around 840K in MRR. I suppose having that many employees adds up quickly though. It's hard letting people go... But ultimately you have to do what is required to keep the company going. Source of financials: http://i.imgur.com/i3W5KC7.png http://i.imgur.com/i3W5KC7.png
rwhitman 10y ago
As much as I want to dive into armchair management here, I greatly respect the fact that the buffer folks remained committed to the total open transparency thing, even when it didn't paint the business in a positive light. That takes a lot of balls In a world where business failures are rarely documented, people ought to celebrate the fact that these guys are giving the world a recorded history of the lifecycle of their company, their thoughts when making business decisions etc. There is immense value to be gained for anyone in this industry
OoTheNigerian 10y ago
I appreciate the forthrightness in this blogpost. Not only have they owned up to mistakes, the thought process in dealing with it (whether you agree with it or not or not) is well documented. To be transparent is quite a difficult thing. You expose yourself to so much scrutiny. Godspeed Joel as you and your team bounce back from this slight setback. We all fall. how we get up is what matters.
cpg 10y ago
Buffer overflow. Oops!
AznHisoka 10y ago
we always talk about 3rd party platform risk for startups and to me Buffer is the prototypical example of one. If Twitter has a bad day they can cut off their API access and they'd be dead (ok they support Facebook and others but that's still 1/2 of your core) So it seemed quite absurd they'd spend so much on things like retreats when they have so much risk.
deleted 10y ago
[deleted]
the_watcher 10y ago
The comments so far all seem focused on the language Joel uses (family, etc). While that may be fair, if you simply change those terms into whatever you think is more accurate, this is a very, very good piece of insight into the perils of growing too quickly, as well as an (as usual) extremely transparent look into how a company that is reasonably successful adapts.
jmcgough 10y ago
Appreciate the transparency, but they mention that they let people off on a "last in, first out" basis, and their flowchart seems to suggest that if they like an employee they'll move them to another role. I don't blame them for doing housekeeping in that way - if you need to reduce headcount, start with people who don't fit the culture and business needs - but they shouldn't pretend that it's perfectly unbiased.
nickgrosvenor 10y ago
Damn, only Buffer could exploit the firing of 10 percent of their staff with a promotional post. I don't know whether to be impressed or offended.
alphacome 10y ago
Layoff is : to get rid of someone as soon as he has finished his work
reality_czech 10y ago
In Silicon Valley, Buffer overflows you!
WWKong 10y ago
"... seeing team as family, with shared values..." Should have tried pay cut across the board and see if folks jumped ship. A good test to see if that culture held up. (Just a thought. I know it is more nuanced)
sinzone 10y ago
Leadership has to stay under one roof. Team can be distributed but the leadership not. Everyone in the mother tipi.
byset 10y ago
I guess I'm nitpicking, and the guy probably just needs an editor, but the whole tone of this post seemed tiresomely self-congratulatory to me. "Look at how frank and empathetic and open I am! Look at me ruthlessly dissect my own mistakes! Isn't that refreshing?" It also all seems a bit maudlin — being laid off is a terrible thing, but mistakes happen and employees are aware of risks going in (although as others have noted, this type of situation underscores how inappropriate the whole "we're a big family" idea is). It would seem more respectful to the laid-off employees not to go on and on in this manner.
Yabood 10y ago
It boggles my mind why a company like buffer that has a relatively simple product and a pretty straight forward transactional sales model would ever need that many people.
chx 10y ago
Why is this several hundred upvotes news? A startup grows from 30-something to 90-something it's too much it trims a little. That's entirely normal. What's the big news?
- mahyarm 10y ago
  It trimmed the most recent employees, who decided to take the job after rejecting other job offers. Hiring 60 people in one year and then firing 10 of them in less than a year isn't nice and it doesn't feel nice. It's definitely a screw up in planning. I understand why it can happen for sure, but still sucks.
  - galistoca 10y ago
    That too but the fact that he's using this as a "look what I did guys! I'm being transparent!" post opportunity is what really offends me.
    - Veus 10y ago
      I think he is using it as a 'look, I screwed up, I'm sorry' post.
  - disordinary 10y ago
    Yeah, also I get the FIFO idea of firing, but for some people who have given up jobs recently. Or have come out of a startup which has failed and owed them salary it can be really tough. Especially when it can take a couple of months to find a new job if you're committed to the remote lifestyle. The share amount of applications that companies who operate remotely get means that it takes six weeks for them to even get to your CV, let alone go through the coding challenges, multiple interviews, paid trial, etc.
    - mahyarm 10y ago
      FIFO layoffs suck extra hard for the new people.
- 10y ago
markbao 10y ago
For a revenue-generating business like this, is 90 employees with $10M ARR normal? Admire the transparency.
alexbrower 10y ago
"Although I know rationally that the size of the team is not something to celebrate, I feel that I slipped into that harmful mindset quite a bit over the last year. Not everyone is familiar with growth metrics like monthly recurring revenue, but team size is easy to understand. Sometimes it impressed people when I told them how big the company was, and I was proud to share it." Correct. Headcount is a figure that represents a company's means. If you're tracking it as an end result, you end up having to make hard decisions or someone makes them for you. The transparency is commendable. A couple other observations: - Affected employees had an average salary of $58.5k (assuming your metrics is net of benefits and payroll tax). If this is annualized, it appears you let go of non-engineers. Set goals and performance expectations for those who remain, especially those who build your product. - Stop publicly promising salary increases altogether. Promote people based on their ability, not an artificial loyalty policy. Some people deserve 10%+ raises, some you'll find are overpaid. Use a basic job ladder and put the burden on managers to justify comp changes. - If the policy of granting vacation bonuses was for recruiting purposes, you've successfully attracted people who want to be paid not to work. Again, implement a corporate bonus program and set goals for staff. Best of luck.
- slgeorge 10y ago
  - Stop publicly promising salary increases altogether. Promote people based on their ability, not an artificial loyalty policy. Some people deserve 10%+ raises, some you'll find are overpaid. Use a basic job ladder and put the burden on managers to justify comp changes. A guarantee of annual salary increases is problematic for three reasons: a. An increase of 3-5% is going to increase salary costs rapidly as it compounds. He mentions that salary is 80% of cost, so it means that costs are going up for doing the _same thing_ by 3-5% every year. Employees aren't a fixed unit of production (particularly in a tech firm) but there's not unlimited new productivity either. It's fine if your prices are also growing at those rates ... but I don't think many people are in those situations at the moment. b. It takes away the meritocracy Salaries have to keep up with inflation, but beyond should be a mark of performance. c. It's going to suck when they have to change it Things happen, this is an example, and employee morale is a sensitive matter.
AndrewKemendo 10y ago
They laid of 10 people, 11% of their workforce - which means they had ~90 employees. Crunchbase tells me they have had almost 4M in investment since 2011 and Baremetrics puts them at 45M in lifetime revenues. So, call it a round $50M in capital. 50M/90 employees all in is around $135k/employee each year for the last two years. Subtract all the perks and those numbers get hard fast. Just goes to show that, even with a lot of cash, a lot of people cost a lot. It ends up doing a disservice to each existing employee, with each new person your company brings on, if you can't scale revenue with the pace of hiring.
galistoca 10y ago
People keep saying "admire the transparency", "appreciate the transparency", but really what's the point? Who is the "transparency" for? I really couldn't care less about my salary being made public to the world, all I care about is working on something I believe in. Extreme transparency has nothing to do with their business growth and it will probably come back to haunt them later, I don't know why they're going so far as to do all this. Doing business is extremely hard on its own, why complicate matters and expose private details to the public, which can and probably will at some point be used against you? I mean even on this thread people nitpick and gossip about every single details. And it would be a lie to say they care 0% about these things. If they do care, it just means less time worrying about their core business.
sulam 10y ago
Two things jumped out at me. 1) They planned to spend 1/3 of their remaining cash on flying people around the world to meet f2f. Whoah! They need a CFO with some real power, because that is absurd. 2) Speaking of needing a CFO, one of the first things a CFO will probably point out to them is that their cash target is off by 100%. They're targeting hitting 50% of today's ARR sometime next year, yet they plan to grow ARR in 12-18 months by double. If they truly want 50% ARR on hand, they need to target $10M, not $4-5M. I also have some questions about the graph -- I'm sure it's well-meaning but it looks fishy. The slope of the curve is noticeably better in the go-forward plan vs the status-quo plan, but there's no logic to support that in the post. I imagine there's a breakdown that makes this make sense, but it's not at all obvious, and the naive conclusion is that these people who were fired were actually slowing down sales somehow. Secondly, every time I see a graph where the next month is negative and then ... magic... and the slope goes positive, my spidey sense tingles pretty damn hard. That said, there are some obvious reasons this might happen, including the cost of the layoff being recognized next month, so that's less of an obvious red flag.
- tomaskafka 10y ago
  AFAIK the graph shows difference between monthly revenue and expenditure. Reduce the costs, and it will turn up (if the revenue stays).
- lexap 10y ago
  This was my first reaction as well. Where was the CFO perspective when they put together this hiring plan?
- swamp40 10y ago
  Maybe if they had cancelled their previous 7 "retreats", they wouldn't be in this predicament...
- philgo20 10y ago
  Same reaction. They might be super transparent and everyone (in the comments at the bottom of the post) are in awe of it, but these numbers just make no sense.
- 10y ago
pc86 10y ago
From a tweet cited in the article (not the author): > i think @dfjjosh's rule of 50% of ARR to operate and invest without $$$ stress is a really good one. use debt to hack it. What's the point of taking on debt just to have more cash on hand? Is this a startup-y "growth über alles" type of mentality or is it found in the larger business world as well? I don't see how increasing your burn rate just to have more cash in the bank is a good business decision, especially when you'll pay a premium to have that cash in the form of interest or loan origination.
zump 10y ago
What does this company even do?!
deleted 10y ago
[deleted]
mattfrommars 10y ago
Interesting as just yesterday I was praising the company how successful it is in this niche. It was posted on a thread yesterday which went like 'Successful companies which YC rejected". And here the layoffs. The upper management were banking 250,000 the last time I read their details.
OJFord 10y ago
I realise it's a significant (11%) proportion of their (former) staff - but "we've made 10 layoffs" sounds incredibly personal.
hathym 10y ago
22% of their stuff are happiness heroes [0] !!! WTF !!!!!! [0] https://docs.google.com/spreadsheets/d/1l3bXAv8JE5RB9siMq36-Ogngks2MT6yQ5gt8YXhUyAg/edit#gid=1533208969 https://docs.google.com/spreadsheets/d/1l3bXAv8JE5RB9siMq36-...
- detaro 10y ago
  WTF because of the name or WTF because of the number?
jimbokun 10y ago
On deciding to not raise funds from venture capitalists: "This has some implications on the true growth rate we can expect, yet it has significant benefits we feel in terms of the freedom we have to experiment not only with innovation in products but also in the way we work." I think this reflects an important, often over looked point. Many people want to start a business because they prefer to not have a boss, and be able to make their own decisions. In many ways, raising capital from outsiders can just replace one boss with another. Now you have to make your investors happy, even when it leads to different decisions than what you might make otherwise.
- nibs 10y ago
  I think the goal is to replace one boss (whether it is VCs, a customer, an employer, etc.) with one hundred bosses (ie. tons of customers, powerless investors, several different freelance employers) so you can tell whatever one is causing you significant stress to FO. Redundancy and autonomy is, or should be, the goal, as opposed to business size or power.
tdaltonc 10y ago
Have they written about their experience with Holacracy?
rigotovar 10y ago
I'm sorry if I haven't read all the comments, but this post basically tells me that the company should remove both founders and have a real CEO to do the right decisions from the beginning of the growing, 34 to 94 it's 3 times the size and having retreats and perks like those mentioned are not worth it specially for such a small/young companies
- newscracker 10y ago
  They're doing something very different from the run-of-the-mill kind of startup, funding, salary management and various other things. I'm sure thousands of people have been thrilled with Buffer growing and thriving and see it as a breath of fresh air in a climate filled with bean counter CEOs who think anything and everything boils down to a number that can be turned like a set of knobs to change outcomes (and of course, most of them fail and jump to another job with a nice golden parachute). I personally think the executive compensation disparities that traditional CEOs bring in and how they deal with things are very damaging to all the humans who work with them. As a society, it doesn't forebode well at all to continue with the traditional model. Regardless of how Buffer ends up faring in the next year or so, it will always be remembered for being different and doing things differently than most other companies. I feel bad for all the Buffer employees that they had to face this - letting go of a significant percentage of the workforce in a small company (or even a small division in a large company) can be really upsetting for everyone involved. The best that they can do, which they seem to be doing, is making sure that these people who're laid off get a decent enough job elsewhere. One can't really hope for that in many other companies.
pascalxus 10y ago
It sounds like they handled this layoff both compassionately and professionally, although the founders have a lot to learn about balancing their spending. But still, every company and employee needs to recognize that your coworkers and company are not your family - this only leads to misplaced expectations. One of things that makes America so competitive, is the concept of at will employment - the company can fire or lay you off anytime and you can leave at any time too. This is a reality we must accept for capitalism to work at optimum efficiency. I realize this may seem heartless and cruel, but that's why you need to have work/life balance. Ideally work should not account for more than 10 to 20 hours of your life per week. Sadly, for most of us it's 40+ hours. It is outside of "work", where you can form relationships that mirror a family like structure - in volunteer groups (unpaid), friendship circles, hobby groups, book clubs, etc. More of our lives should be dedicated to such organizations for us to remain better balanced.
- jwebb99 10y ago
  > Ideally work should not account for more than 10 to 20 hours of your life per week. Is this an opinion or is there some kind of rationale behind this? I don't mean to sound antagonistic, I'm just genuinely asking a question.
  - pascalxus 10y ago
    It's just an opinion. 20 hours (25% of the discretionary week, discretionary time is roughly 50% of 168 hours ~ 84 hours.) for me represents the maximum amount of time that could be considered sufficiently diversified.
odbol_ 10y ago
What is with capitalism's obsession with constant growth? Buffer is a great app, I use it every day, but how in the f*ck do they need 100 employees to maintain it? My company is writing an entire smartwatch OS, including companion apps for iOS and Android, and we're less than 10 people. Buffer needs 100 people just to write one multiplatform app? What is going on here?
freestockoption 10y ago
"We had just come out of a long experiment with self-management" Why do startups do these huge management experiments? My company did the flat thing too and they spent a few months trying to get people to understand it. Probably burning up 5hr/wk for each person. Until they almost ran out of money. By then people were really confused. I think it almost killed the company due to the politics and red tape it created (strange, it was supposed to eliminate it). My opinion is that it's hard enough to run a startup, let alone trying to invent a new management methodology. Best to go with what people already know. It may not be perfect, but at least there's some prior experience with it. Just like how most would advise using the programming language and platform you know to build your initial product, rather than trying to to learn something that you think might be better.
kra34 10y ago
"when we had to tell 10 talented teammates that their journey with us was over" - Gavin Belson
joeevans1000 10y ago
Holy smokes... they put all new hires through a 45 day trial, then only keep 7 out of 10! I can't imagine getting the boot after a month and a half... by then you'd have made emotional connections. I guess it would work for those who are contractors thinking about getting a full time gig, but for those leaving other positions... wow.

Buffer Layoffs

593 points by aarondf 10y ago

GBond 10y ago

OT: I stopped using Buffer since they've imposed limits on the free accounts. Any suggestions for alternatives?

bdcravens 10y ago
Is this for a non-profit or a personal project? Or social marketing for something that can make money?

smuss77 10y ago

I really like the transparency and accountability. Two questions: Why are the two loans necessary? And, how does a loan get counted as savings? > Leo and I are committing $100k each in the form of a loan at the lowest possible interest rate, with repayment only when Buffer reaches a healthy financial position. Savings: $200,000.

beambot 10y ago
It shows founder commitment -- a willingness to put their own personal savings at risk to help the company survive. It's "savings" in the penny-saved, penny-earned sense.
- dhbanes 10y ago
  A penny saved is not a liability, it is an asset.

pbreit 10y ago

I have mixed emotions with Buffer's shtick. On the one hand there's something fresh and unique about it. On the other, I think: just put your heads down and get to work serving customers! I'm guessing the main benefit of the open-ness is marketing. I doubt it helps the company much beyond that.

spitfire 10y ago
Well, except for hiring. When they get to that again. Sometimes just vocalizing things came lead to new insight. I like their approach, minus the salary transparancy.
- imron 10y ago
  > When they get to that again. Looks like they're still hiring: https://buffer.com/journey/full-stack-developer https://buffer.com/journey/full-stack-developer
  - simonswords82 10y ago
    > Looks like they're still hiring: https://buffer.com/journey/full-stack-developer https://buffer.com/journey/full-stack-developer Yeah that's what I was going to say, there's a link to the we're hiring page on the new salary formula spreadsheet: https://docs.google.com/spreadsheets/d/1l3bXAv8JE5RB9siMq36-Ogngks2MT6yQ5gt8YXhUyAg/edit#gid=1533208969 https://docs.google.com/spreadsheets/d/1l3bXAv8JE5RB9siMq36-...
- galistoca 10y ago
  Same logic goes for hiring. If you need to use this kind of gimmicky tactic--which is obviously bad for the company in the long run--to find new hires, it probably means you need to focus more on the core product to turn it into something that is naturally attractive for potential employees.

joosters 10y ago

"We had just come out of a long experiment with self-management, where we fully leaned in to ..." What on earth does 'fully leaned in' mean? It's not the greatest of metaphors, I pictured someone falling on their face.

mildbow 10y ago
Love this comment. Because that's what happened. Maybe it's a cautionary tale supported by another meme -- never go full retard. But they got up and seem to be dusting themselves off. So kudos for showing transparency when they mess up (which is when commitment to transparency actually means something).

adwf 10y ago

Ouch. Never a pleasant thing to do. I just hope they made the cut deep enough. A common mistake is to cut enough to just get back to break even, when what you really need in that situation is to get back to a decent level of profitability. The number of times I've seen a second round of layoffs because people got that wrong... From the looks of their projections, they've done the right thing, back to profitability and growth.

kumarski 10y ago

They have some pretty tough competition now. https://www.socialchamp.io/ https://www.socialchamp.io/ for example is one that is growing rapidly. I can only imagine that it may become a commodotized space w/ little differentiation.

deleted 10y ago

[deleted]

eropple 10y ago

> Reflecting on it now, I see a lot of ego and pride reflected in that team size number. This is one of the worse diseases I see in the tech world. I have friends who, when asked how their company is doing, respond with something like "great! We just hired a dozen more engineers." I'm pretty sure a better answer is "great! We just got X customers," or "great! We're profitable now!". Not how big your fief is. (But, mentioning fiefs, I'm struck by the notion that a startup is just a business unit of a loosely-organized corporation and CxOs thereof just middle managers for an investor-class executive group.)

Fiahil 10y ago

Are we seeing these event more frequently than before or is it just a matter of perception? Anyway, despite being a tough time for them; it's good to know they live in reality and not in a "unicorn-themed-chase-party".

swagv 10y ago

Pffft. I've laid off 10 people in my sleep in past startups

k-mcgrady 10y ago

I'm curious as to why they had 94 employees. That seems like an insanely high number for a company that does something pretty basic (not dumping on the product, I like it and have used it in the past). What are all of those people doing?

vox_mollis 10y ago
Par for the course. TWTR has nearly 4000 employees. Twitter. Human organizations always scale to accommodate available resources, not required functionality.
- Rezo 10y ago
  WhatsApp famously has 55 employees and over a billion monthly active users. That should be the role model for today's startups! I think it's conceivable the reason you don't see much innovation from Twitter for years now, is that they have the organizational equivalent of traffic gridlock. It's simply impossible to get anything done with that many stakeholders.
BenoitEssiambre 10y ago
As part of a company of less than 30 in a rural region, I get that feeling a lot. I'm sure I'm wrong but what do 57000 google employees do!? Am I really hitting an immense mechanical turk when I use google? Yet they can't spare a single person to spend a few weeks to convert the flash off of google finance?
- jpm_sd 10y ago
  Kind of, yes! You would not believe how much manual labor goes into maintaining and load balancing data centers and keeping deceptively simple-looking services up and running... There has been some recent press on the work done by legions of SREs that gets into a few of the details.
  - BenoitEssiambre 10y ago
    I dunno we are 3 software devs, 2 network admins (also playing the role of top tier level, on call support) and run our own bare metal servers in two geographically separated collocation data centers. We also have 2 device hardware/firmware guys and the CEO also does a bit of coding sometimes. Our solutions are sometimes a bit clunky but our infrastructure is audited yearly by an outside firm and certified to carry banking data through the wireless device we designed and through our network. There is another 15-20 people doing financials, payroll, hr, tech support, sales, marketing, assembly, hardware testing, shipping etc.. We maintain multiple backend interfaces to a bunch of (sometimes old and archaic) bank networks and to our wireless devices as well as multiple front end portals for our users. It's hard to imagine ever being able to make use of 57000 bodies, but I suppose that's a totally different context. We could use a few more.

minimaxir 10y ago

While Buffer's transparency is incredible, the financial calculations in the article fail to account for the possibility of an employee exodus domino effect, especially after both knowing the financial state of the company, and relevant perks being cut.

Animats 10y ago
Right. In general, if you have a layoff and the job market isn't extremely tight, you will also lose some other employees you wanted to keep. Especially the ones who see that top management's plans aren't working and it's time to jump ship.
toomuchtodo 10y ago
Is it possible to stem an employee exodus when fully transparent? I don't think so. It only works when there's a level of information asymmetry.
- st3v3r 10y ago
  I think it is, unless your situation is so terrible where you don't think you'll be around in 3-6 months.
- dasil003 10y ago
  I don't follow your thinking at all. You're assuming that the truth is always so horrible that management can never fully reveal it, and your not accounting for the whiff of secrecy and gossip that can be much worse than the actual withheld information.
  - toomuchtodo 10y ago
    Perhaps its because I've been at more failed companies than most? Regardless of transparency vs secrecy, you reach a tipping point where the situation "feels" dire enough that employees leaving accelerates. I'm sure it depends on the demographics of the org, employees with families, mortgages, etc are willing to stick out volatility far less (in my experience) than employees with no obligations. Anecdotal of course! I'd love to have more data on this to find out what that tipping point is.

bitrotburner 10y ago

I was really shocked to see how little Buffer paid when they started their "open" thing, so I'm surprised that they're not a lot more profitable.

danso 10y ago

FWIW, here's their public spreadsheet of salaries and calculations. Not sure if it's been recently updated (on closer look, seems to reflect the founders' stated pay cuts, and new hires as recent as last month): https://docs.google.com/spreadsheets/d/1l3bXAv8JE5RB9siMq36-Ogngks2MT6yQ5gt8YXhUyAg/edit#gid=1533208969 https://docs.google.com/spreadsheets/d/1l3bXAv8JE5RB9siMq36-... edit: Adding links to their blog posts: https://open.buffer.com/transparent-salaries/ https://open.buffer.com/transparent-salaries/ https://open.buffer.com/introducing-open-salaries-at-buffer-including-our-transparent-formula-and-all-individual-salaries/ https://open.buffer.com/introducing-open-salaries-at-buffer-...

dsacco 10y ago
I admire Buffer for being so transparent with their salaries, but I don't think I would ever decide to work for a company that mandated it. In my (admittedly limited) experience, mandating salary transparency tends to increase the salaries of low performers and reduce the salaries of high performers. It usually eliminates the potential for negotiating raises and poses difficult questions about paying some employees more than others in the same band. Case in point: according to Buffer's salary calculator[1], a "master" (their highest rank) backend developer living in San Francisco and optimizing for salary over equity would earn about $155,000/year. I can't think of any definition of "master" developer that could be competitive for. Friends of mine at AmaGooBookSoft and even other startups have earned nearly double that for being merely "senior" (L5). [1]: https://buffer.com/salary?r=1&l=10&e=3&q=1 https://buffer.com/salary?r=1&l=10&e=3&q=1
- nilkn 10y ago
  The $155k salary might be due to the transparency, but could it also be due to a simple inability to pay developers $300k+? That's well over double the CEO's salary. I think it's clear they simply don't have the revenue and cash reserves to pay developers that kind of money. I suspect you'll find this to be true at a lot of smaller startups that rely on actually making money instead of fundraising.
  - jsprogrammer 10y ago

hobo_mark 10y ago

I certainly appreciate their openness, and like to follow their progress, but... ...could anyone explain to this naive commenter how it takes 90 (80 for that matter) people to run essentially a 'cronjob as a service' business?

shemnon42 10y ago
crontab is the easiest part. It's the integration to the moving targets that are social media APIs that you are paying for.
jdavis703 10y ago
At my company we had non-technical staff that had to update a YAML file to post editorial content to the homepage and mobile apps. For an engineer, IT person, etc, this is trivial. Not so for other people. I had to spend so much time supporting this I replaced it with Contentful (an API-based CMS). These are the kind of pain points that companies like Buffer try to solve.
Arcsech 10y ago
Let's do some simple estimation! I haven't really looked at their spreadsheet, so this is just guesswork. The product is fairly simple technologically yes, but the value is provided by making it easy to use so the customer saves time (= money). To do that you need a few UX people plus some developers (especially with web and mobile apps), call that 15 engineers/designers total, plus another 5 for ops. Now you need a sales team since your real money will be in selling to enterprises - call that 15 people. And on top of that you need customer support, and call that another 20 people. Now that we're up to 55 people, we need another 10 people worth of HR and 5 bean counters, that takes us to 70. Now cap it off with 10 managers/executives and we're up to 80, and I'm sure there's some things I was off about or forgot. It's easy to forget about all the non-engineering resources you need for a medium-sized business.
- joshdickson 10y ago
  If anyone reads this comment, FYI it is not remotely accurate. They have 23 just in engineering and 6 designers, with 2 in ops. We have AWS and these guys have incredibly run of the mill needs, why on earth would you need 1 ops person for every 3 developers... They have nobody doing what you'd classify as a "sales." They have some marketing people, people doing whatever "customer research" is, a number of people working in "community" and a bunch working in customer success.

beat 10y ago

This reminds me of Ben Horowitz' The Hard Thing About Hard Things, where he talked about implementing a plan to lay off 90% of his company in complete secrecy, for fear of employee exodus and loss of customer confidence. But that was a very different situation than Buffer is in now, as it happened during the original dot-com era collapse. Kudos to Buffer for their approach to transparency. I think it will actually serve them well here.

ctvo 10y ago

>> We canceled our upcoming team retreat to Berlin. Savings: $400,000. Compared to all their other costs that one stood out the most. 500k savings laying off 10% of your workforce compared to 400k for a team retreat in Berlin. Is this typical?

deleted 10y ago
[deleted]
jacquesm 10y ago
One-off versus monthly recurring.
ndiscussion 10y ago
That does seem astronomical. $4,000 per employee if they have ~100 employees like they say. Anyone think their salaries are absurdly high for some locations and positions? They've got Adnan working as an "Advanced Backend/Frontend Developer" in Sri Lanka, making only $65,104. This actually makes sense to me because Sri Lanka's cost of living is pretty low. But they've got an Advanced "Happiness Hero" which I presume is an email support role making $77,397 in Kentucky. Last time I checked, $77,000 is an extraordinarily high salary in KY, especially for someone doing email support.
- SystemOut 10y ago
  That's assuming what they do is straight e-mail support. I'm not sure what a happiness hero does but they might be expected to do much more than e-mail support. In many companies the "success manager" role tends to require people with more education and technical background to do in-depth troubleshooting and real customer interaction.
- hammock 10y ago
  $4,000 would barely cover business-class airfare between SF<->Berlin for one employee. Not to mention accommodations, event space, meals and entertainment.
  - 10y ago

deleted 10y ago

[deleted]

ovrdrv3 10y ago

What does buffer do as a company?

CPLX 10y ago
Social media marketing automation
- bbcbasic 10y ago
  Socially Positioned Automated Marketing?
mehta 10y ago
I had the same question. I clicked on a few links that I thought would lead to the product description but they didn't. Eventually I realized that the domain was open.buffer.com. Once you go to buffer.com, you see the product description. From the homepage: "The best way to drive traffic, increase fan engagement and save time on social media."
snissn 10y ago
I hadn't know what they did either, but their homepage makes it abundantly clear: https://buffer.com/ https://buffer.com/ They let companies and individuals manage & schedule social media posts across a few of the main platforms (At the risk of doing them a disservice in my explanation, but also saving whoever reads this a click).
pg_is_a_butt 10y ago
create resentment over compensation and lay people off it seems.

selectron 10y ago

Good for them for being transparent even when the company is struggling, but if I was an employee at the company I would be worried. The chart they provide of Buffer bank balance over time seems overly optimistic. It looks like they assume that the employees they fire added no value to the company - they assume the company will generate the same revenue even after cutting 10% of their employees. This is wrong, and would worry me greatly that the founders don't seem to recognize this. Of course I would be worried anyway because laying people off at a start-up is a really bad sign, anyway you try to spin it.

compiler-guy 10y ago

This may be a little cynical but: "With our culture of bringing our whole selves to work and seeing team as family, with shared values we live by,..." In the American business world, you are an employee until you aren't. Confusing being an employee with being "family" is a mistake, both for the company and the employee. When times get bad, companies do what it takes to survive, including throwing employees overboard. That's just a fact. Buffer may have thought it was different, but that flow-chart of how they decided who to layoff was entirely about how an employee can help the company, not how the layoff would affect the employee. That's not how normal families make decisions. I have no problem with any of that, but anyone who thinks that way has another thing coming. All of this isn't to say that Buffer was thoughtless or callous in how they handled it. From the outside, it looks like one of the better handled layoffs I've seen. But still. Don't confuse your job with your family. It's a business relationship that is only maintained as long as it is in both side's interest to do so.

justinzollars 10y ago
The most money I ever made was with a group of fellow startup friends, who I considered my family. Being a career warrior might work for you, but that idea worked for us.
- harryh 10y ago
  I'm glad it worked out for you. That's great. But what would you have done if one of those friends had stopped coming to the office. Or just did bad work. Would you have let them stay on forever or would you eventually have fired them? That's the difference between family and a team.
  - justinzollars 10y ago
    let me point out too many people have the down vote. This place is turning into stackoverflow.
jc4p 10y ago
This is so 100% on point. I think the Netflix NYT article from yesterday had a more realistic tone regarding the "family" aspect: http://www.nytimes.com/2016/06/19/magazine/can-netflix-survive-in-the-new-world-it-created.html http://www.nytimes.com/2016/06/19/magazine/can-netflix-survi... > The key concept is summed up in the 23rd slide. “We’re a team, not a family,” it reads. “Netflix leaders hire, develop and cut smartly, so we have stars in every position.” Your last sentence here is really important. If that's the mindset a person is in, when a business-centric action happens they won't feel as betrayed. Trust me, feeling betrayed while also fully logically knowing you shouldn't feel betrayed because it's a corporation in a capitalist ecoystem is such a bad feeling.

hkmurakami 10y ago

>In short, this was all caused by the fact that we grew the team too big, too fast. We thought we were being mindful about balancing the pace of our hiring with our revenue growth. We weren’t. >Reflecting on it now, I see a lot of ego and pride reflected in that team size number. > In many areas, we grew the team more than was truly necessary for the time, more than was clearly validated. I feel like we all experience this pull by vanity metrics, ego, etc. The level of honestly we've seen in this post will hopefully serve as a reality check for many of us. >Both Leo and I have taken a salary cut of 40% until at least the end of the year. Savings: $94,000. >Leo and I are committing $100k each in the form of a loan at the lowest possible interest rate, with repayment only when Buffer reaches a healthy financial position. Savings: $200,000. This is an attitude and decision I saw made by the C-level during the financial crisis at a company with hundreds of employees. The C level took home $0 in pay and the staff took at 40% until they made it back to profitability, in order to avoid laying anyone off (this is Japan where reemployment would be incredibly difficult). It shows maturity and commitment to the organization (i.e. your people) that is rarely seen these days in startup land. Much respect.

vegabook 10y ago
Was just going to post at a higher level, but your comment nails it. These guys are feeling the pain. It's clear. There is honesty going on here - I feel a lack of cynicism from the post, real soul searching, and for that, I can mitigate the otherwise knee-jerk negativity to the managers that I usually feel on layoff justification posts. Reality is hitting people. The market is slowing. Tough choices. No forgiveness for not having seen it, and for hurting the laid off people, but at least I see a genuine search for reasons and genuine empathy. Good post, under the circumstances. Here's hoping that the wisdom on display will serve this company well.
deleted 10y ago
[deleted]

OliverJones 10y ago

> Leo and I are committing $100k each in the form of a loan at the lowest possible interest rate, with repayment only when Buffer reaches a healthy financial position. Savings: $200,000. Oops. This isn't savings. It's high-priority debt. Investors really want to invest in the future of the company, not the past. If these guys want to serve their company, they'll (a) write this off their personal books, considering it an unrecoverable cost. (b) convert it from debt to some kind of warrant giving them the right to recover it from profits at some point in the future. Who's advising these guys?

jea 10y ago
People who know about tax law apparently.
- robhunter 10y ago
  I was wondering about that - they already took out $1M each in the last fundraising round at all - why draw a $200K+ salary and give half of it to taxes when you've already got plenty in the bank?

dmitrygr 10y ago

"We made 10 layoffs in order to recover to a healthier financial position. Savings: $585,000" so these people cost the company $58,500 apiece (this is incl. their benefits, insurance, etc). Meaning their salaries were, what? $40k? wow?

alainv 10y ago
If you read further, they clarify that's 585k through the end of the year. So factor in a termination package for them and the 585k is less than half of their yearly salary, so they were likely at or above 100k/yr each. Makes a bit more sense.
lazyjones 10y ago
Unlikely; that's probably the amount they would have spent until they'd have run out of money (in 5 months). They don't have any $40k salaries AFAICT (it's all public). Lowest salary was "junior happiness hero in Manila/Delhi/Hanoi" at $45k: https://open.buffer.com/introducing-open-salaries-at-buffer-including-our-transparent-formula-and-all-individual-salaries/ https://open.buffer.com/introducing-open-salaries-at-buffer-...
RyJones 10y ago
For half a year, so times two

ryanmarsh 10y ago

Company lays off 10,000 people: "restructuring" This guy lays off 10: heart felt apologies and deep moment of reflection Criticize away HN, while he still has his humanity.

nodesocket 10y ago

This is a bit surprising. Buffers revenue has been solidly growing (up 23% in the last 6 months) with around 840K in MRR. I suppose having that many employees adds up quickly though. It's hard letting people go... But ultimately you have to do what is required to keep the company going. Source of financials: http://i.imgur.com/i3W5KC7.png http://i.imgur.com/i3W5KC7.png

rwhitman 10y ago

As much as I want to dive into armchair management here, I greatly respect the fact that the buffer folks remained committed to the total open transparency thing, even when it didn't paint the business in a positive light. That takes a lot of balls In a world where business failures are rarely documented, people ought to celebrate the fact that these guys are giving the world a recorded history of the lifecycle of their company, their thoughts when making business decisions etc. There is immense value to be gained for anyone in this industry

OoTheNigerian 10y ago

I appreciate the forthrightness in this blogpost. Not only have they owned up to mistakes, the thought process in dealing with it (whether you agree with it or not or not) is well documented. To be transparent is quite a difficult thing. You expose yourself to so much scrutiny. Godspeed Joel as you and your team bounce back from this slight setback. We all fall. how we get up is what matters.

cpg 10y ago

Buffer overflow. Oops!

AznHisoka 10y ago

we always talk about 3rd party platform risk for startups and to me Buffer is the prototypical example of one. If Twitter has a bad day they can cut off their API access and they'd be dead (ok they support Facebook and others but that's still 1/2 of your core) So it seemed quite absurd they'd spend so much on things like retreats when they have so much risk.

deleted 10y ago

[deleted]

the_watcher 10y ago

The comments so far all seem focused on the language Joel uses (family, etc). While that may be fair, if you simply change those terms into whatever you think is more accurate, this is a very, very good piece of insight into the perils of growing too quickly, as well as an (as usual) extremely transparent look into how a company that is reasonably successful adapts.

jmcgough 10y ago

Appreciate the transparency, but they mention that they let people off on a "last in, first out" basis, and their flowchart seems to suggest that if they like an employee they'll move them to another role. I don't blame them for doing housekeeping in that way - if you need to reduce headcount, start with people who don't fit the culture and business needs - but they shouldn't pretend that it's perfectly unbiased.

nickgrosvenor 10y ago

Damn, only Buffer could exploit the firing of 10 percent of their staff with a promotional post. I don't know whether to be impressed or offended.

alphacome 10y ago

Layoff is : to get rid of someone as soon as he has finished his work

reality_czech 10y ago

In Silicon Valley, Buffer overflows you!

WWKong 10y ago

"... seeing team as family, with shared values..." Should have tried pay cut across the board and see if folks jumped ship. A good test to see if that culture held up. (Just a thought. I know it is more nuanced)

sinzone 10y ago

Leadership has to stay under one roof. Team can be distributed but the leadership not. Everyone in the mother tipi.

byset 10y ago

I guess I'm nitpicking, and the guy probably just needs an editor, but the whole tone of this post seemed tiresomely self-congratulatory to me. "Look at how frank and empathetic and open I am! Look at me ruthlessly dissect my own mistakes! Isn't that refreshing?" It also all seems a bit maudlin — being laid off is a terrible thing, but mistakes happen and employees are aware of risks going in (although as others have noted, this type of situation underscores how inappropriate the whole "we're a big family" idea is). It would seem more respectful to the laid-off employees not to go on and on in this manner.

Yabood 10y ago

It boggles my mind why a company like buffer that has a relatively simple product and a pretty straight forward transactional sales model would ever need that many people.

chx 10y ago

Why is this several hundred upvotes news? A startup grows from 30-something to 90-something it's too much it trims a little. That's entirely normal. What's the big news?

mahyarm 10y ago
It trimmed the most recent employees, who decided to take the job after rejecting other job offers. Hiring 60 people in one year and then firing 10 of them in less than a year isn't nice and it doesn't feel nice. It's definitely a screw up in planning. I understand why it can happen for sure, but still sucks.
- galistoca 10y ago
  That too but the fact that he's using this as a "look what I did guys! I'm being transparent!" post opportunity is what really offends me.
  - Veus 10y ago
    I think he is using it as a 'look, I screwed up, I'm sorry' post.
- disordinary 10y ago
  Yeah, also I get the FIFO idea of firing, but for some people who have given up jobs recently. Or have come out of a startup which has failed and owed them salary it can be really tough. Especially when it can take a couple of months to find a new job if you're committed to the remote lifestyle. The share amount of applications that companies who operate remotely get means that it takes six weeks for them to even get to your CV, let alone go through the coding challenges, multiple interviews, paid trial, etc.
  - mahyarm 10y ago
    FIFO layoffs suck extra hard for the new people.
10y ago

markbao 10y ago

For a revenue-generating business like this, is 90 employees with $10M ARR normal? Admire the transparency.

alexbrower 10y ago

"Although I know rationally that the size of the team is not something to celebrate, I feel that I slipped into that harmful mindset quite a bit over the last year. Not everyone is familiar with growth metrics like monthly recurring revenue, but team size is easy to understand. Sometimes it impressed people when I told them how big the company was, and I was proud to share it." Correct. Headcount is a figure that represents a company's means. If you're tracking it as an end result, you end up having to make hard decisions or someone makes them for you. The transparency is commendable. A couple other observations: - Affected employees had an average salary of $58.5k (assuming your metrics is net of benefits and payroll tax). If this is annualized, it appears you let go of non-engineers. Set goals and performance expectations for those who remain, especially those who build your product. - Stop publicly promising salary increases altogether. Promote people based on their ability, not an artificial loyalty policy. Some people deserve 10%+ raises, some you'll find are overpaid. Use a basic job ladder and put the burden on managers to justify comp changes. - If the policy of granting vacation bonuses was for recruiting purposes, you've successfully attracted people who want to be paid not to work. Again, implement a corporate bonus program and set goals for staff. Best of luck.

slgeorge 10y ago
- Stop publicly promising salary increases altogether. Promote people based on their ability, not an artificial loyalty policy. Some people deserve 10%+ raises, some you'll find are overpaid. Use a basic job ladder and put the burden on managers to justify comp changes. A guarantee of annual salary increases is problematic for three reasons: a. An increase of 3-5% is going to increase salary costs rapidly as it compounds. He mentions that salary is 80% of cost, so it means that costs are going up for doing the _same thing_ by 3-5% every year. Employees aren't a fixed unit of production (particularly in a tech firm) but there's not unlimited new productivity either. It's fine if your prices are also growing at those rates ... but I don't think many people are in those situations at the moment. b. It takes away the meritocracy Salaries have to keep up with inflation, but beyond should be a mark of performance. c. It's going to suck when they have to change it Things happen, this is an example, and employee morale is a sensitive matter.

AndrewKemendo 10y ago

They laid of 10 people, 11% of their workforce - which means they had ~90 employees. Crunchbase tells me they have had almost 4M in investment since 2011 and Baremetrics puts them at 45M in lifetime revenues. So, call it a round $50M in capital. 50M/90 employees all in is around $135k/employee each year for the last two years. Subtract all the perks and those numbers get hard fast. Just goes to show that, even with a lot of cash, a lot of people cost a lot. It ends up doing a disservice to each existing employee, with each new person your company brings on, if you can't scale revenue with the pace of hiring.

galistoca 10y ago

People keep saying "admire the transparency", "appreciate the transparency", but really what's the point? Who is the "transparency" for? I really couldn't care less about my salary being made public to the world, all I care about is working on something I believe in. Extreme transparency has nothing to do with their business growth and it will probably come back to haunt them later, I don't know why they're going so far as to do all this. Doing business is extremely hard on its own, why complicate matters and expose private details to the public, which can and probably will at some point be used against you? I mean even on this thread people nitpick and gossip about every single details. And it would be a lie to say they care 0% about these things. If they do care, it just means less time worrying about their core business.

sulam 10y ago

Two things jumped out at me. 1) They planned to spend 1/3 of their remaining cash on flying people around the world to meet f2f. Whoah! They need a CFO with some real power, because that is absurd. 2) Speaking of needing a CFO, one of the first things a CFO will probably point out to them is that their cash target is off by 100%. They're targeting hitting 50% of today's ARR sometime next year, yet they plan to grow ARR in 12-18 months by double. If they truly want 50% ARR on hand, they need to target $10M, not $4-5M. I also have some questions about the graph -- I'm sure it's well-meaning but it looks fishy. The slope of the curve is noticeably better in the go-forward plan vs the status-quo plan, but there's no logic to support that in the post. I imagine there's a breakdown that makes this make sense, but it's not at all obvious, and the naive conclusion is that these people who were fired were actually slowing down sales somehow. Secondly, every time I see a graph where the next month is negative and then ... magic... and the slope goes positive, my spidey sense tingles pretty damn hard. That said, there are some obvious reasons this might happen, including the cost of the layoff being recognized next month, so that's less of an obvious red flag.

tomaskafka 10y ago
AFAIK the graph shows difference between monthly revenue and expenditure. Reduce the costs, and it will turn up (if the revenue stays).
lexap 10y ago
This was my first reaction as well. Where was the CFO perspective when they put together this hiring plan?
swamp40 10y ago
Maybe if they had cancelled their previous 7 "retreats", they wouldn't be in this predicament...
philgo20 10y ago
Same reaction. They might be super transparent and everyone (in the comments at the bottom of the post) are in awe of it, but these numbers just make no sense.
10y ago

pc86 10y ago

From a tweet cited in the article (not the author): > i think @dfjjosh's rule of 50% of ARR to operate and invest without $$$ stress is a really good one. use debt to hack it. What's the point of taking on debt just to have more cash on hand? Is this a startup-y "growth über alles" type of mentality or is it found in the larger business world as well? I don't see how increasing your burn rate just to have more cash in the bank is a good business decision, especially when you'll pay a premium to have that cash in the form of interest or loan origination.

zump 10y ago

What does this company even do?!

deleted 10y ago

[deleted]

mattfrommars 10y ago

Interesting as just yesterday I was praising the company how successful it is in this niche. It was posted on a thread yesterday which went like 'Successful companies which YC rejected". And here the layoffs. The upper management were banking 250,000 the last time I read their details.

OJFord 10y ago

I realise it's a significant (11%) proportion of their (former) staff - but "we've made 10 layoffs" sounds incredibly personal.

hathym 10y ago

22% of their stuff are happiness heroes [0] !!! WTF !!!!!! [0] https://docs.google.com/spreadsheets/d/1l3bXAv8JE5RB9siMq36-Ogngks2MT6yQ5gt8YXhUyAg/edit#gid=1533208969 https://docs.google.com/spreadsheets/d/1l3bXAv8JE5RB9siMq36-...

detaro 10y ago
WTF because of the name or WTF because of the number?

jimbokun 10y ago

On deciding to not raise funds from venture capitalists: "This has some implications on the true growth rate we can expect, yet it has significant benefits we feel in terms of the freedom we have to experiment not only with innovation in products but also in the way we work." I think this reflects an important, often over looked point. Many people want to start a business because they prefer to not have a boss, and be able to make their own decisions. In many ways, raising capital from outsiders can just replace one boss with another. Now you have to make your investors happy, even when it leads to different decisions than what you might make otherwise.

nibs 10y ago
I think the goal is to replace one boss (whether it is VCs, a customer, an employer, etc.) with one hundred bosses (ie. tons of customers, powerless investors, several different freelance employers) so you can tell whatever one is causing you significant stress to FO. Redundancy and autonomy is, or should be, the goal, as opposed to business size or power.

tdaltonc 10y ago

Have they written about their experience with Holacracy?

rigotovar 10y ago

I'm sorry if I haven't read all the comments, but this post basically tells me that the company should remove both founders and have a real CEO to do the right decisions from the beginning of the growing, 34 to 94 it's 3 times the size and having retreats and perks like those mentioned are not worth it specially for such a small/young companies

newscracker 10y ago
They're doing something very different from the run-of-the-mill kind of startup, funding, salary management and various other things. I'm sure thousands of people have been thrilled with Buffer growing and thriving and see it as a breath of fresh air in a climate filled with bean counter CEOs who think anything and everything boils down to a number that can be turned like a set of knobs to change outcomes (and of course, most of them fail and jump to another job with a nice golden parachute). I personally think the executive compensation disparities that traditional CEOs bring in and how they deal with things are very damaging to all the humans who work with them. As a society, it doesn't forebode well at all to continue with the traditional model. Regardless of how Buffer ends up faring in the next year or so, it will always be remembered for being different and doing things differently than most other companies. I feel bad for all the Buffer employees that they had to face this - letting go of a significant percentage of the workforce in a small company (or even a small division in a large company) can be really upsetting for everyone involved. The best that they can do, which they seem to be doing, is making sure that these people who're laid off get a decent enough job elsewhere. One can't really hope for that in many other companies.

pascalxus 10y ago

It sounds like they handled this layoff both compassionately and professionally, although the founders have a lot to learn about balancing their spending. But still, every company and employee needs to recognize that your coworkers and company are not your family - this only leads to misplaced expectations. One of things that makes America so competitive, is the concept of at will employment - the company can fire or lay you off anytime and you can leave at any time too. This is a reality we must accept for capitalism to work at optimum efficiency. I realize this may seem heartless and cruel, but that's why you need to have work/life balance. Ideally work should not account for more than 10 to 20 hours of your life per week. Sadly, for most of us it's 40+ hours. It is outside of "work", where you can form relationships that mirror a family like structure - in volunteer groups (unpaid), friendship circles, hobby groups, book clubs, etc. More of our lives should be dedicated to such organizations for us to remain better balanced.

jwebb99 10y ago
> Ideally work should not account for more than 10 to 20 hours of your life per week. Is this an opinion or is there some kind of rationale behind this? I don't mean to sound antagonistic, I'm just genuinely asking a question.
- pascalxus 10y ago
  It's just an opinion. 20 hours (25% of the discretionary week, discretionary time is roughly 50% of 168 hours ~ 84 hours.) for me represents the maximum amount of time that could be considered sufficiently diversified.

odbol_ 10y ago

What is with capitalism's obsession with constant growth? Buffer is a great app, I use it every day, but how in the f*ck do they need 100 employees to maintain it? My company is writing an entire smartwatch OS, including companion apps for iOS and Android, and we're less than 10 people. Buffer needs 100 people just to write one multiplatform app? What is going on here?

freestockoption 10y ago

"We had just come out of a long experiment with self-management" Why do startups do these huge management experiments? My company did the flat thing too and they spent a few months trying to get people to understand it. Probably burning up 5hr/wk for each person. Until they almost ran out of money. By then people were really confused. I think it almost killed the company due to the politics and red tape it created (strange, it was supposed to eliminate it). My opinion is that it's hard enough to run a startup, let alone trying to invent a new management methodology. Best to go with what people already know. It may not be perfect, but at least there's some prior experience with it. Just like how most would advise using the programming language and platform you know to build your initial product, rather than trying to to learn something that you think might be better.

kra34 10y ago

"when we had to tell 10 talented teammates that their journey with us was over" - Gavin Belson

joeevans1000 10y ago

Holy smokes... they put all new hires through a 45 day trial, then only keep 7 out of 10! I can't imagine getting the boot after a month and a half... by then you'd have made emotional connections. I guess it would work for those who are contractors thinking about getting a full time gig, but for those leaving other positions... wow.