4 ms·

If we follow the weekly updates: 1. First a hiring "slowdown". 2. Hiring freeze and rescinded offers. 3. 18% layoffs. What's the reason behind announcing it

by jstx1 4y ago

If we follow the weekly updates: 1. First a hiring "slowdown". 2. Hiring freeze and rescinded offers. 3. 18% layoffs. What's the reason behind announcing it in stages? Don't they receive much more negative publicity this way? Or are they really making decisions from one week for the next?

ohgodplsno 4y ago
It'll all be forgotten when they announce withdrawal freezes. Don't worry, it's for the Safety of the Network ™
- typeofhuman 4y ago
  Not your keys, not your coins. Don't keep your assets on an exchange.
  - krzyk 4y ago
    Yeah, off to do my evacuation to paper wallets and wait 4 years to go back.
gruez 4y ago
between 2 and 3, the bls released a new inflation report, and there was a subsequent market crash.
boringg 4y ago
Unfortunately it takes time to be able to actually to change expectation, craft and execute an exit plan properly. Also going through the motions signals what's happening for better or worse.
michaelt 4y ago
There's two ways you can announce a big corporate change: 1. A fully formed announcement, where everyone learns their fate on day 1. People will complain that it came out of nowhere, they weren't consulted, and that skulking managers sharpened their knives in secret. 2. A gradual announcement, where everybody knows well before the big announcement that something is coming. People will complain about uncertainty and sleepless nights spent fearing for their jobs. (Neither option is complaint-free, because there's no way of firing 18% of your workforce without putting people in the mood to complain)
mschuster91 4y ago
> Or are they really making decisions from one week for the next? I'd say this is the most likely explanation. The weekend was brutal for everyone in crypto.
bombcar 4y ago
Because everyone does it in stages as listed above (some more loudly than others), if you jump to step 3 without going through 1 and 2 people will assume it is your step one and things must be really, really bad.
arkitaip 4y ago
We have to finally accept the fact that the clowns are indeed driving the clown car.
hyperbovine 4y ago
4. 100% layoffs.
cj 4y ago
Just 3 months ago many people thought the markets could potentially bounce back (e.g. if the ukraine conflict didn't escalate and if inflation came down on its own - neither of which happened). Not so long ago, CNBC was still talking about the probability of a recession a quoting probability percentages less than 50%. I think the reality is that 2-4 months ago, very few people thought things would get as bad as they are right now. In an environment of extremely high unpredictability, sometimes week-by-week decision making is the only way to operate. Re: your point on publicity, I think they will get less negative publicity now that they're announcing layoffs after many other companies have already done the same
- pid-1 4y ago
  Hedges started shorting the S&P 500 in 2021. Surely if you are a high level executive, your data shouldn't come from CNBC.
  - mrits 4y ago
    Technically they started years before that and lost a lot of money. If you are a high level executive, your data shouldn't come from hedge funds.
- anotherfounder 4y ago
  Um, just a month ago, in the earnings call, he reiterated continuing to grow and invest. For those following the markets and economy closely (like any public company CEO should), literally nothing in the last month has been a much of a surprise. So, to go from, 'we're so totally gonna hire to' to 'pause' to 'cancel' to 'fire' in a month doesn't seem to inspire much confidence in them.
londons_explore 4y ago
I think you're really asking about a continuous vs discrete management approach. In a continuous approach, you run the company according to control-theory like laws. Ie. you want to maximize profits, so you adjust the workforce up and down gradually to maximize profits. If labor prices go down 3% you might increase headcount by 1.5% to stay at optimal profitability. All parts of the company get optimized to the best of your ability like this, with signals giving a proportionate effect to the levers you control. In a discrete approach, you recognise that some actions will have dramatic non-linear effects, and therefore it's better to announce a 10% downscaling rather than ten separate 1% downscalings. The downside of the discrete approach is your response to signals is delayed, because you want to group together the bad news, and don't want to pull a big lever based on uncertain information.
- parasubvert 4y ago
  In practice if you fired people weekly/monthly/quarterly (pick a small enough discrete period to approximate “continuously”) at % you wouldn’t be maximizing profits due to other costs. “Non-linear effects” is carrying a lot in your description. Take a high performing team, fire them, and then rehire tor it, retrain, etc. the cost it took to get to the previous level of productivity is the “knowledge capital” that was squandered. It usually will be more than the labor savings, unless we are talking about huge disparities based on decades of seniority: older workers with higher pay and defined benefit pensions etc vs younger workers with defined contribution pensions, is about the only case I’ve seen this make sense, and it was a once-in 30 years kind of thing. Then there’s the reputation and morale hit: people won’t want to work for you if you have a reputation for regular layoffs. Amazon for example is struggling with employee turnover and morale because of its aggressive approach to annual PIP and layoffs. Labor costs also tend to be sticky downwards - people will accept getting laid off but won’t accept a pay cut. Of course there are industries with seasonal or overflow workers etc where this is an understood job characteristic, but that tends not to be the norm…
rexreed 4y ago
It's called denial. Also the slow release of bad news is an attempt to stem the losses of employees leaving a sinking ship. Controlling the press narrative. Lots of reasons for it. And no, tech "journalism" doesn't work as it used to, so drip by drip of this bad news doesn't hurt any worse than ripping the bandaid off.
marcinzm 4y ago
I've seen it once due to the executives being disconnected from reality and not willing to accept that things are now truly f-ed. They were believers more than executives. In that case it took the board telling them "no, that's not enough cuts" multiple times.
vishnugupta 4y ago
1 and 2 are signaling to the stock markets that they are doing something to cut costs and internally to warn employees that layoffs are imminent so that they start looking out. Helps companies reduce severance payments and the logistics hassle.

by jstx1 4y ago

ohgodplsno 4y ago

It'll all be forgotten when they announce withdrawal freezes. Don't worry, it's for the Safety of the Network ™

typeofhuman 4y ago
Not your keys, not your coins. Don't keep your assets on an exchange.
- krzyk 4y ago
  Yeah, off to do my evacuation to paper wallets and wait 4 years to go back.

gruez 4y ago

between 2 and 3, the bls released a new inflation report, and there was a subsequent market crash.

boringg 4y ago

Unfortunately it takes time to be able to actually to change expectation, craft and execute an exit plan properly. Also going through the motions signals what's happening for better or worse.

michaelt 4y ago

There's two ways you can announce a big corporate change: 1. A fully formed announcement, where everyone learns their fate on day 1. People will complain that it came out of nowhere, they weren't consulted, and that skulking managers sharpened their knives in secret. 2. A gradual announcement, where everybody knows well before the big announcement that something is coming. People will complain about uncertainty and sleepless nights spent fearing for their jobs. (Neither option is complaint-free, because there's no way of firing 18% of your workforce without putting people in the mood to complain)

mschuster91 4y ago

> Or are they really making decisions from one week for the next? I'd say this is the most likely explanation. The weekend was brutal for everyone in crypto.

bombcar 4y ago

Because everyone does it in stages as listed above (some more loudly than others), if you jump to step 3 without going through 1 and 2 people will assume it is your step one and things must be really, really bad.

arkitaip 4y ago

We have to finally accept the fact that the clowns are indeed driving the clown car.

hyperbovine 4y ago

4. 100% layoffs.

cj 4y ago

Just 3 months ago many people thought the markets could potentially bounce back (e.g. if the ukraine conflict didn't escalate and if inflation came down on its own - neither of which happened). Not so long ago, CNBC was still talking about the probability of a recession a quoting probability percentages less than 50%. I think the reality is that 2-4 months ago, very few people thought things would get as bad as they are right now. In an environment of extremely high unpredictability, sometimes week-by-week decision making is the only way to operate. Re: your point on publicity, I think they will get less negative publicity now that they're announcing layoffs after many other companies have already done the same

pid-1 4y ago
Hedges started shorting the S&P 500 in 2021. Surely if you are a high level executive, your data shouldn't come from CNBC.
- mrits 4y ago
  Technically they started years before that and lost a lot of money. If you are a high level executive, your data shouldn't come from hedge funds.
anotherfounder 4y ago
Um, just a month ago, in the earnings call, he reiterated continuing to grow and invest. For those following the markets and economy closely (like any public company CEO should), literally nothing in the last month has been a much of a surprise. So, to go from, 'we're so totally gonna hire to' to 'pause' to 'cancel' to 'fire' in a month doesn't seem to inspire much confidence in them.

londons_explore 4y ago

I think you're really asking about a continuous vs discrete management approach. In a continuous approach, you run the company according to control-theory like laws. Ie. you want to maximize profits, so you adjust the workforce up and down gradually to maximize profits. If labor prices go down 3% you might increase headcount by 1.5% to stay at optimal profitability. All parts of the company get optimized to the best of your ability like this, with signals giving a proportionate effect to the levers you control. In a discrete approach, you recognise that some actions will have dramatic non-linear effects, and therefore it's better to announce a 10% downscaling rather than ten separate 1% downscalings. The downside of the discrete approach is your response to signals is delayed, because you want to group together the bad news, and don't want to pull a big lever based on uncertain information.

parasubvert 4y ago
In practice if you fired people weekly/monthly/quarterly (pick a small enough discrete period to approximate “continuously”) at % you wouldn’t be maximizing profits due to other costs. “Non-linear effects” is carrying a lot in your description. Take a high performing team, fire them, and then rehire tor it, retrain, etc. the cost it took to get to the previous level of productivity is the “knowledge capital” that was squandered. It usually will be more than the labor savings, unless we are talking about huge disparities based on decades of seniority: older workers with higher pay and defined benefit pensions etc vs younger workers with defined contribution pensions, is about the only case I’ve seen this make sense, and it was a once-in 30 years kind of thing. Then there’s the reputation and morale hit: people won’t want to work for you if you have a reputation for regular layoffs. Amazon for example is struggling with employee turnover and morale because of its aggressive approach to annual PIP and layoffs. Labor costs also tend to be sticky downwards - people will accept getting laid off but won’t accept a pay cut. Of course there are industries with seasonal or overflow workers etc where this is an understood job characteristic, but that tends not to be the norm…

rexreed 4y ago

It's called denial. Also the slow release of bad news is an attempt to stem the losses of employees leaving a sinking ship. Controlling the press narrative. Lots of reasons for it. And no, tech "journalism" doesn't work as it used to, so drip by drip of this bad news doesn't hurt any worse than ripping the bandaid off.

marcinzm 4y ago

I've seen it once due to the executives being disconnected from reality and not willing to accept that things are now truly f-ed. They were believers more than executives. In that case it took the board telling them "no, that's not enough cuts" multiple times.

vishnugupta 4y ago

1 and 2 are signaling to the stock markets that they are doing something to cut costs and internally to warn employees that layoffs are imminent so that they start looking out. Helps companies reduce severance payments and the logistics hassle.