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I think you're missing the key part of GP: > These projects might be pointless on a small app, but in a large business might be worth millions to the company.

I think you're missing the key part of GP: > These projects might be pointless on a small app, but in a large business might be worth millions to the company. With enough traffic and revenue, you'll get a positive return on hiring a bunch of engineers to optimize things that wouldn't be worth it for smaller sites. With enough engineers you'll get a positive return on hiring engineers to make engineering more efficient. It's only natural in that case that as traffic and revenue drops, the ROI calculation changes and it suddenly becomes better to lay those people off. And that's just engineering. I can imagine that in this downturn the sales department just isn't generating new revenue. What brick and mortar business is going to advertise right now? It only makes sense to lay off as much of the sales teams as possible. You can hire them back later.

ed 7y ago
> With enough traffic and revenue, you'll get a positive return on hiring a bunch of engineers to optimize things that wouldn't be worth it for smaller sites. With enough engineers you'll get a positive return on hiring engineers to make engineering more efficient. Very insightful! As a corollary, you should not staff up until there is something to optimize.
mandelbrotwurst 7y ago
You probably can't "hire them back later". People who you've fired might have an aversion to working with you in the future, or simply be occupied with other work when you want them back. If you mean ripping out entire teams and replacing them with outsiders, that also has costs.
- deminature 7y ago
  There's also reputation issues with a "hire them back later" attitude. Engineers are likely to become skeptical of recruiters from companies with a policy like that, and then you start struggling to hire anyone.
  - allannienhuis 7y ago
    That reference was about sales employees, not engineers. I think most people realize that in larger companies the sales team and the engineering team are managed very differently, with the employees having very different expectations about the stability of their position.
- spankalee 7y ago
  What I've seen is that salespeople are lot more fungible than veteran engineers who have a lot of knowledge of the companies system. Sales armies tend to have a lot of more junior staff too. They might not hire back the same salespeople, but they should be able to hire what they need. There will be a lot of people looking for work.
mbesto 7y ago
> With enough traffic and revenue, you'll get a positive return on hiring a bunch of engineers to optimize things that wouldn't be worth it for smaller sites. With enough engineers you'll get a positive return on hiring engineers to make engineering more efficient. The problem is that no modern tech company I know actually measures the ROI of this (positive or negative) so it's completely unrealistic to determine the IRR on it. In other words, there might be a scenario where it actually is more profitable NOT to do it.

ed 7y ago

mandelbrotwurst 7y ago

You probably can't "hire them back later". People who you've fired might have an aversion to working with you in the future, or simply be occupied with other work when you want them back. If you mean ripping out entire teams and replacing them with outsiders, that also has costs.

deminature 7y ago
There's also reputation issues with a "hire them back later" attitude. Engineers are likely to become skeptical of recruiters from companies with a policy like that, and then you start struggling to hire anyone.
- allannienhuis 7y ago
  That reference was about sales employees, not engineers. I think most people realize that in larger companies the sales team and the engineering team are managed very differently, with the employees having very different expectations about the stability of their position.
spankalee 7y ago
What I've seen is that salespeople are lot more fungible than veteran engineers who have a lot of knowledge of the companies system. Sales armies tend to have a lot of more junior staff too. They might not hire back the same salespeople, but they should be able to hire what they need. There will be a lot of people looking for work.

mbesto 7y ago

> With enough traffic and revenue, you'll get a positive return on hiring a bunch of engineers to optimize things that wouldn't be worth it for smaller sites. With enough engineers you'll get a positive return on hiring engineers to make engineering more efficient. The problem is that no modern tech company I know actually measures the ROI of this (positive or negative) so it's completely unrealistic to determine the IRR on it. In other words, there might be a scenario where it actually is more profitable NOT to do it.