8 ms·

> The planet is not exactly flush with such folk at present, and much of Arm's appeal to investors lies in its deep technical expertise. It is therefore likely

by rob74 5y ago

> The planet is not exactly flush with such folk at present, and much of Arm's appeal to investors lies in its deep technical expertise. It is therefore likely that most of the redundancies will be staff not directly involved in Arm's core activities. This "cost-cutting exercise" (lovely euphemism) may not directly target technical people, but for some of them it may be a wake-up call nevertheless: "if they start lay-offs now, who says this will be the last round? And who says that I won't be next?". So they start looking around for alternatives, which I hear are plentiful at the moment, and hey presto, you got rid of the people you didn't actually want to get rid of...

Clubber 5y ago
I agree. To add, usually when this happens seemingly at random, it's to make the company look more attractive for a sale, in my experience.
- noir_lord 5y ago
  Given the outcry after the last attempt at a sale and the fact that nVidia got blocked (a US company) who would risk buying arm at the moment given that multiple competition watchdogs are currently paying attention.
  - rossdavidh 5y ago
    You could sell to private capital, or a company not currently in the semi industry that wanted to enter. [edit] Oh it says it right in the article: "SoftBank, Arm's owner, responded to that setback with a plan to float the chip design firm by March 2023."
  - cinntaile 5y ago
    They're preparing to IPO in 2023. It's a shame the Nvidia sale didn't go through, now they'll likely die a slow death because they don't have enough R&D resources to compete with the big boys who are just going to design their own CPUs instead of buying the design.
    - Kon-Peki 5y ago
      That's an interesting idea. The Apple M1 lineup, for example. The M1 standard, pro, max, and ultra are not differentiated by their ARM cores other than the quantity of them. It's really the GPU cores and media encoding components. And that Neural Engine thing is really important for many apps and OS features. At what point do the general purpose CPU cores on a modern chip become minor players that have very little impact on overall chip performance? I don't think we're there yet, but it certainly could happen. EDIT - I'm saying M1 vs M1 Pro vs M1 Max vs M1 Ultra. Not M1 vs Intel i7
      - yywwbbn 5y ago
        That not really true though. M1 had considerable better single core performance at the time of release than anything else with a comparable TDP. And the Neural Engine is only useful is fairly narrow use cases.
      - kcb 5y ago
        Apples ARM cores have been significantly ahead of off the shelf ARM designs for years now.
      - mkr-hn 5y ago
        I wonder if there were similar conversations about math coprocessors when they joined the CPU. What did people say about increasing specialization of cores then? The closest recent analogue is GPUs joining the CPU on mobile devices, but it was only recently that those weren't complete garbage.
    - swamp40 5y ago
      Small ARM Cortex's have taken over the microcontroller market. Billions made each year from every large microcontroller manufacturer. They aren't going anywhere. It's hard to believe ARM wouldn't make enough from licensing fees and from each one sold to make an easy profit. Maybe the license doesn't account for individual sales, IDK? New secure ARM Cortex's are launching everywhere too, so they are very much alive and well, for the next 20 years minimum.
  - hnlmorg 5y ago
    Would either of those things genuinely put other companies off? If I were looking to expand into that market then it wouldn't put me off. They're manageable hurdles to purchasing rather than reasons that buying ARM would be bad business.
- redleader9345 5y ago
  I've seen companies go on hiring sprees just prior to being acquired, which I don't fully understand. I guess the company tries to puff itself up to fetch a larger asking price? Guessing base cost factors in to sale price. It's shitty, cuz their playing with people's lives. As soon as the acquiring company takes over, their like "what's with all these unnecessary people?"
  - guiriduro 5y ago
    Maybe it is to create the 'inefficiencies' which the merger can then 'synergize' away, so that the acquiring execs can get bigger bonuses. Because I've yet to see one instance where real (non-stupid/contrived) synergies actually occurred as foreseen, but plenty of cynical M&A. Also plenty of absolutely atrocious dysynergies in corp history of course.
    - scarface74 5y ago
      Off the top of my head: - Instagram/Facebook - Next/Apple - Beats/Apple - LucasArts/Pixar/Fox/Marvel (maybe)/Disney - MetroPCS/Sprint/T-Mobile
pfortuny 5y ago
It is also a great way to make technical people do non-technical work and end up wasting a ton of time. Overall, cost-cutting in the short term. Just that.
m463 5y ago
There's also culture death during layoffs. People get nervous, start focusing on their own tasks and don't altruistically help others.
- pjbeam 5y ago
  Which then in turn puts pressure on the spiral of talent loss in the departments management wasn't targeting.
- ethbr0 5y ago
  Counter-take: There's also cultural improvement during layoffs, when you no longer have to interface with someone who doesn't want to do their job and/or is bad at it.
  - mschuster91 5y ago
    The "bad" people will hold on as long as they can - partially because they won't have it as easy to find a new job, partially because they gamble on enough "high performers" leaving that they cannot be fired because otherwise everything would collapse.
  - gedy 5y ago
    That should really be taken care of as it comes up in a case by case basis, not mass layoff.
    - ethbr0 5y ago
      I'm not pro-stack ranking, but I also can't argue that sweeping layoffs don't also have some benefits.
      - herval 5y ago
        Can you cite a couple of examples where it _did_ improve things?
      - caoilte 5y ago
hgomersall 5y ago
I've heard it suggested that the best way to stimulate a bunch of startups is to collapse a big tech firm. I know of at least two clusters that can be traced back to big companies going under.
- mikepurvis 5y ago
  The Toronto-Waterloo tech corridor can be pretty heavily tied back to the slow implosion of RIM/BlackBerry over the course of the early 2010s. Even the companies that predate those events still benefited a lot from the glut of qualified personnel coming available, and there are others which had been funded or bootstrapped by early RIM employees.
  - bregma 5y ago
    Where I work at BlackBerry it seems to be all ex-Nortel people. So it goes.
- petercooper 5y ago
  Or even half an industry. I don't think it's a coincidence a lot of significant technical developments or companies came out of the post dot-com "fallow" period of 2002-2006 (like the spread of Ajax, Rails, Django, .NET and Mono, Skype, WordPress, much of Web 2.0's innovation with Flickr, Twitter, and Facebook all founded in this period, AWS).
- navaati 5y ago
  Sun
- mattkevan 5y ago
  Pretty sure that most of Silicon Valley, including Intel, was founded by people exiting Fairchild Semiconductor when things got rough there in the ‘70s. https://computerhistory.org/blog/fairchild-and-the-fairchildren/ https://computerhistory.org/blog/fairchild-and-the-fairchild...
Yoric 5y ago
Yep. I've been exactly there ~15 months ago (not at Arm, but in another fairly big tech company). I haven't checked the actual numbers but it is my understanding by some former colleagues that the number of tech people who decided to leave was comparable to the number of people who were laid off.
Calamitous 5y ago
Yep. As soon as the layoffs start (or even reliable rumors), I’m polishing my resume.
tlogan 5y ago
Large layoffs is always a politic game and in many cases very smart people working of cool projects ended up being laid off. I was in one large corporation (not large anymore) which did something like that. And sure, cafeteria was still full of marketing and sales people even after layoffs.
gadders 5y ago
https://steveblank.com/2009/12/21/the-elves-leave-middle-earth-%E2%80%93-soda%E2%80%99s-are-no-longer-free/ https://steveblank.com/2009/12/21/the-elves-leave-middle-ear...
Johnny555 5y ago
So they start looking around for alternatives, which I hear are plentiful at the moment On the other hand, if you think the layoffs are due to an impending economic downturn, you could end up moving to a new job and being the new guy, so if they need to make cuts, you're first to go. I was working for a small (~500 people) but well established startup around the time of the original dot-com bust. I have some friends that tried the same thing -- saw the writing on the wall and tried hopping to a bigger more established company for job protection, but they were the first to lose jobs when layoffs hit the industry. We had relatively layoffs in some areas of the company, but not in the core engineering team.
vishnugupta 5y ago
> you got rid of the people you didn't actually want to get rid of And to add salt to the wound you will end up retaining those who are good at surviving such layoffs by doing some optical work. It's the worst of all the worlds. It should also be pointed out that people are not plug-and-play parts of a machinery. They carry domain knowledge, context (Chesterton's fence), intra-company network they have painstakingly built and such intangible value. Besides, layoff doesn't mean the work disappears. It gets distributed, often unevenly, among existing workforce. I've seen it first hand and the aftereffects are just terrible.
Gareth321 5y ago
I finally have a use for my MBA. The theory on this one is not good. You're right: people will leave of their own volition. Problem is, it's usually the people with the highest marketability. In laymen's terms, the most skilled and productive employees. In any given organisation you'll find 20% doing 80% of the heavy lifting. Losing half of the most productive employees results in a real world 40% reduction in output. Of course, much of this output is intangible and easy to hide, so investors don't see the damage for years. Soon enough, lack of productivity bites cash flows, and another round of layoffs is announced. Wouldn't you know it, the most productive leave this time too.
- 01100011 5y ago
  A couple of coworkers with experience in the defense industry related a story about a company, Cubic I think, which started offering buyouts in order to reduce headcount and boost profits. The best engineers took the offer because they could just get another job somewhere else. The worst employees stayed behind and proceeded to do the same buyout approach next time the company needed to save money. It was a natural selection feedback loop that took the company's engineering talent into the gutter.
  - mprovost 5y ago
    Bruce Webster named this the "Dead Sea Effect". [0] Imagine your talent evaporating, leaving an increasingly salty residue. [0] http://brucefwebster.com/2008/04/11/the-wetware-crisis-the-dead-sea-effect/ http://brucefwebster.com/2008/04/11/the-wetware-crisis-the-d...
  - onlyrealcuzzo 5y ago
    I think the practice is old, and /might/ have once made more sense. If you offer a buyout to a bunch of people in a factory with no real alternative, you're selecting for the people who want to do nothing - which is probably the people who are doing (close to) nothing. If you offer a buyout to a bunch of people with real alternatives, you're going to mostly buyout the people with the best alternatives (the most marketable employee / the most productive). This is amplified by the fact that factory workers really have a minimum amount they must be productive. Whereas software engineers can LITERALLY do nothing. Further, factory workers have a pretty low limit on how productive they can be. The limit is much higher for software engineers. It's an old practice that might have made sense, but definitely does not make sense in software.
mattkevan 5y ago
That’s happening where I work. There was a shock round of layoffs a few months ago, triggering a mass exodus. They’ve now had to start hiring again to make up numbers. The amount of team disruption, lost domain knowledge and hiring expenses, especially as new people will want to be paid more, must have cost the business far more than they saved from the layoffs. So short sighted.
- ThrowawayIP 5y ago
  I'm sure your CEO got their bonus though, if not a premium on the bonus because they lead the company through such hard times.
hn_throwaway_99 5y ago
Just to be slightly contrarian, I've also seen in tech companies that layoffs are often the only way to get rid of "mediocre-ly poor" but not egregiously bad performers. That is, I've worked with people that didn't completely suck, but to quote Office Space, they always did the absolute bare minimum. Few companies have the Netflix mindset of letting people go with a large severance if they aren't top performers, so these mediocre folks can just be allowed to fester. TBH, I've been glad as an engineer to see the company (belatedly) handle these sub-par performers, and to these folks benefit they get a fair severance and can usually find other jobs quickly. Of course not all layoffs are like this, and often times layoffs at a large company are done "unevenly" as others have pointed out, but I have been in a company before where layoffs allowed the company to focus and perform better.
- kradeelav 5y ago
  I understand the annoyance at underperformers (I really do), but that feels a little, mm, unkind on some level. Some people just want a steady paycheck without having to be a rockstar, and I can't blame them for that.
  - hiptobecubic 5y ago
    There's a difference between "I don't want to be a rockstar" and "I am doing the bare minimum to make it not worth it to fire me." I think the post is talking about the latter.
    - dan-robertson 5y ago
      How does “I’m doing the bare minimum to make it not worth it to fire me” compare to “I’m being paid a larger proportion for the value I create” for you? To clarify, the former happens by decreasing output and the latter by getting paid more for existing output and obviously can be harder to achieve in practice. In both cases the company could be getting (or feeling they’re getting) lower value for money from the worker.
      - 5y ago
jollybean 5y ago
Layoffs happen all the time. Most people are not 20-something people who can move across the country on a dime. Far from worrisome, the talent may be fine with losing what they view (rightly or wrongly) as the extra weight. A company in a bad downwards spiral is one thing, but this doesn't seem to be that. If there is a second layoff, maybe some fear would hit, but I don't think Arm is in a terrible spot. I wouldn't suggest that many people are thinking in dire terms.
ge96 5y ago
Corp I worked at would not raise their pay and a huge number of people just left. People with 20 years at the company. It was funny on LinkedIn you'd see people with a photo of their badge and one of the buildings in the background ex-employees "celebrates" this. The corp is in talks of getting acquired now.

by rob74 5y ago

Clubber 5y ago

I agree. To add, usually when this happens seemingly at random, it's to make the company look more attractive for a sale, in my experience.

noir_lord 5y ago
Given the outcry after the last attempt at a sale and the fact that nVidia got blocked (a US company) who would risk buying arm at the moment given that multiple competition watchdogs are currently paying attention.
- rossdavidh 5y ago
  You could sell to private capital, or a company not currently in the semi industry that wanted to enter. [edit] Oh it says it right in the article: "SoftBank, Arm's owner, responded to that setback with a plan to float the chip design firm by March 2023."
- cinntaile 5y ago
  They're preparing to IPO in 2023. It's a shame the Nvidia sale didn't go through, now they'll likely die a slow death because they don't have enough R&D resources to compete with the big boys who are just going to design their own CPUs instead of buying the design.
  - Kon-Peki 5y ago
    That's an interesting idea. The Apple M1 lineup, for example. The M1 standard, pro, max, and ultra are not differentiated by their ARM cores other than the quantity of them. It's really the GPU cores and media encoding components. And that Neural Engine thing is really important for many apps and OS features. At what point do the general purpose CPU cores on a modern chip become minor players that have very little impact on overall chip performance? I don't think we're there yet, but it certainly could happen. EDIT - I'm saying M1 vs M1 Pro vs M1 Max vs M1 Ultra. Not M1 vs Intel i7
    - yywwbbn 5y ago
      That not really true though. M1 had considerable better single core performance at the time of release than anything else with a comparable TDP. And the Neural Engine is only useful is fairly narrow use cases.
    - kcb 5y ago
      Apples ARM cores have been significantly ahead of off the shelf ARM designs for years now.
    - mkr-hn 5y ago
      I wonder if there were similar conversations about math coprocessors when they joined the CPU. What did people say about increasing specialization of cores then? The closest recent analogue is GPUs joining the CPU on mobile devices, but it was only recently that those weren't complete garbage.
  - swamp40 5y ago
    Small ARM Cortex's have taken over the microcontroller market. Billions made each year from every large microcontroller manufacturer. They aren't going anywhere. It's hard to believe ARM wouldn't make enough from licensing fees and from each one sold to make an easy profit. Maybe the license doesn't account for individual sales, IDK? New secure ARM Cortex's are launching everywhere too, so they are very much alive and well, for the next 20 years minimum.
- hnlmorg 5y ago
  Would either of those things genuinely put other companies off? If I were looking to expand into that market then it wouldn't put me off. They're manageable hurdles to purchasing rather than reasons that buying ARM would be bad business.
redleader9345 5y ago
I've seen companies go on hiring sprees just prior to being acquired, which I don't fully understand. I guess the company tries to puff itself up to fetch a larger asking price? Guessing base cost factors in to sale price. It's shitty, cuz their playing with people's lives. As soon as the acquiring company takes over, their like "what's with all these unnecessary people?"
- guiriduro 5y ago
  Maybe it is to create the 'inefficiencies' which the merger can then 'synergize' away, so that the acquiring execs can get bigger bonuses. Because I've yet to see one instance where real (non-stupid/contrived) synergies actually occurred as foreseen, but plenty of cynical M&A. Also plenty of absolutely atrocious dysynergies in corp history of course.
  - scarface74 5y ago
    Off the top of my head: - Instagram/Facebook - Next/Apple - Beats/Apple - LucasArts/Pixar/Fox/Marvel (maybe)/Disney - MetroPCS/Sprint/T-Mobile

pfortuny 5y ago

It is also a great way to make technical people do non-technical work and end up wasting a ton of time. Overall, cost-cutting in the short term. Just that.

m463 5y ago

There's also culture death during layoffs. People get nervous, start focusing on their own tasks and don't altruistically help others.

pjbeam 5y ago
Which then in turn puts pressure on the spiral of talent loss in the departments management wasn't targeting.
ethbr0 5y ago
Counter-take: There's also cultural improvement during layoffs, when you no longer have to interface with someone who doesn't want to do their job and/or is bad at it.
- mschuster91 5y ago
  The "bad" people will hold on as long as they can - partially because they won't have it as easy to find a new job, partially because they gamble on enough "high performers" leaving that they cannot be fired because otherwise everything would collapse.
- gedy 5y ago
  That should really be taken care of as it comes up in a case by case basis, not mass layoff.
  - ethbr0 5y ago
    I'm not pro-stack ranking, but I also can't argue that sweeping layoffs don't also have some benefits.
    - herval 5y ago
      Can you cite a couple of examples where it _did_ improve things?
    - caoilte 5y ago

hgomersall 5y ago

I've heard it suggested that the best way to stimulate a bunch of startups is to collapse a big tech firm. I know of at least two clusters that can be traced back to big companies going under.

mikepurvis 5y ago
The Toronto-Waterloo tech corridor can be pretty heavily tied back to the slow implosion of RIM/BlackBerry over the course of the early 2010s. Even the companies that predate those events still benefited a lot from the glut of qualified personnel coming available, and there are others which had been funded or bootstrapped by early RIM employees.
- bregma 5y ago
  Where I work at BlackBerry it seems to be all ex-Nortel people. So it goes.
petercooper 5y ago
Or even half an industry. I don't think it's a coincidence a lot of significant technical developments or companies came out of the post dot-com "fallow" period of 2002-2006 (like the spread of Ajax, Rails, Django, .NET and Mono, Skype, WordPress, much of Web 2.0's innovation with Flickr, Twitter, and Facebook all founded in this period, AWS).
navaati 5y ago
Sun
mattkevan 5y ago
Pretty sure that most of Silicon Valley, including Intel, was founded by people exiting Fairchild Semiconductor when things got rough there in the ‘70s. https://computerhistory.org/blog/fairchild-and-the-fairchildren/ https://computerhistory.org/blog/fairchild-and-the-fairchild...

Yoric 5y ago

Yep. I've been exactly there ~15 months ago (not at Arm, but in another fairly big tech company). I haven't checked the actual numbers but it is my understanding by some former colleagues that the number of tech people who decided to leave was comparable to the number of people who were laid off.

Calamitous 5y ago

Yep. As soon as the layoffs start (or even reliable rumors), I’m polishing my resume.

tlogan 5y ago

Large layoffs is always a politic game and in many cases very smart people working of cool projects ended up being laid off. I was in one large corporation (not large anymore) which did something like that. And sure, cafeteria was still full of marketing and sales people even after layoffs.

gadders 5y ago

https://steveblank.com/2009/12/21/the-elves-leave-middle-earth-%E2%80%93-soda%E2%80%99s-are-no-longer-free/ https://steveblank.com/2009/12/21/the-elves-leave-middle-ear...

Johnny555 5y ago

So they start looking around for alternatives, which I hear are plentiful at the moment On the other hand, if you think the layoffs are due to an impending economic downturn, you could end up moving to a new job and being the new guy, so if they need to make cuts, you're first to go. I was working for a small (~500 people) but well established startup around the time of the original dot-com bust. I have some friends that tried the same thing -- saw the writing on the wall and tried hopping to a bigger more established company for job protection, but they were the first to lose jobs when layoffs hit the industry. We had relatively layoffs in some areas of the company, but not in the core engineering team.

vishnugupta 5y ago

> you got rid of the people you didn't actually want to get rid of And to add salt to the wound you will end up retaining those who are good at surviving such layoffs by doing some optical work. It's the worst of all the worlds. It should also be pointed out that people are not plug-and-play parts of a machinery. They carry domain knowledge, context (Chesterton's fence), intra-company network they have painstakingly built and such intangible value. Besides, layoff doesn't mean the work disappears. It gets distributed, often unevenly, among existing workforce. I've seen it first hand and the aftereffects are just terrible.

Gareth321 5y ago

I finally have a use for my MBA. The theory on this one is not good. You're right: people will leave of their own volition. Problem is, it's usually the people with the highest marketability. In laymen's terms, the most skilled and productive employees. In any given organisation you'll find 20% doing 80% of the heavy lifting. Losing half of the most productive employees results in a real world 40% reduction in output. Of course, much of this output is intangible and easy to hide, so investors don't see the damage for years. Soon enough, lack of productivity bites cash flows, and another round of layoffs is announced. Wouldn't you know it, the most productive leave this time too.

01100011 5y ago
A couple of coworkers with experience in the defense industry related a story about a company, Cubic I think, which started offering buyouts in order to reduce headcount and boost profits. The best engineers took the offer because they could just get another job somewhere else. The worst employees stayed behind and proceeded to do the same buyout approach next time the company needed to save money. It was a natural selection feedback loop that took the company's engineering talent into the gutter.
- mprovost 5y ago
  Bruce Webster named this the "Dead Sea Effect". [0] Imagine your talent evaporating, leaving an increasingly salty residue. [0] http://brucefwebster.com/2008/04/11/the-wetware-crisis-the-dead-sea-effect/ http://brucefwebster.com/2008/04/11/the-wetware-crisis-the-d...
- onlyrealcuzzo 5y ago
  I think the practice is old, and /might/ have once made more sense. If you offer a buyout to a bunch of people in a factory with no real alternative, you're selecting for the people who want to do nothing - which is probably the people who are doing (close to) nothing. If you offer a buyout to a bunch of people with real alternatives, you're going to mostly buyout the people with the best alternatives (the most marketable employee / the most productive). This is amplified by the fact that factory workers really have a minimum amount they must be productive. Whereas software engineers can LITERALLY do nothing. Further, factory workers have a pretty low limit on how productive they can be. The limit is much higher for software engineers. It's an old practice that might have made sense, but definitely does not make sense in software.

mattkevan 5y ago

That’s happening where I work. There was a shock round of layoffs a few months ago, triggering a mass exodus. They’ve now had to start hiring again to make up numbers. The amount of team disruption, lost domain knowledge and hiring expenses, especially as new people will want to be paid more, must have cost the business far more than they saved from the layoffs. So short sighted.

ThrowawayIP 5y ago
I'm sure your CEO got their bonus though, if not a premium on the bonus because they lead the company through such hard times.

hn_throwaway_99 5y ago

Just to be slightly contrarian, I've also seen in tech companies that layoffs are often the only way to get rid of "mediocre-ly poor" but not egregiously bad performers. That is, I've worked with people that didn't completely suck, but to quote Office Space, they always did the absolute bare minimum. Few companies have the Netflix mindset of letting people go with a large severance if they aren't top performers, so these mediocre folks can just be allowed to fester. TBH, I've been glad as an engineer to see the company (belatedly) handle these sub-par performers, and to these folks benefit they get a fair severance and can usually find other jobs quickly. Of course not all layoffs are like this, and often times layoffs at a large company are done "unevenly" as others have pointed out, but I have been in a company before where layoffs allowed the company to focus and perform better.

kradeelav 5y ago
I understand the annoyance at underperformers (I really do), but that feels a little, mm, unkind on some level. Some people just want a steady paycheck without having to be a rockstar, and I can't blame them for that.
- hiptobecubic 5y ago
  There's a difference between "I don't want to be a rockstar" and "I am doing the bare minimum to make it not worth it to fire me." I think the post is talking about the latter.
  - dan-robertson 5y ago
    How does “I’m doing the bare minimum to make it not worth it to fire me” compare to “I’m being paid a larger proportion for the value I create” for you? To clarify, the former happens by decreasing output and the latter by getting paid more for existing output and obviously can be harder to achieve in practice. In both cases the company could be getting (or feeling they’re getting) lower value for money from the worker.
    - 5y ago

jollybean 5y ago

Layoffs happen all the time. Most people are not 20-something people who can move across the country on a dime. Far from worrisome, the talent may be fine with losing what they view (rightly or wrongly) as the extra weight. A company in a bad downwards spiral is one thing, but this doesn't seem to be that. If there is a second layoff, maybe some fear would hit, but I don't think Arm is in a terrible spot. I wouldn't suggest that many people are thinking in dire terms.

ge96 5y ago

Corp I worked at would not raise their pay and a huge number of people just left. People with 20 years at the company. It was funny on LinkedIn you'd see people with a photo of their badge and one of the buildings in the background ex-employees "celebrates" this. The corp is in talks of getting acquired now.