10 ms·

> Shopify, hired like mad during the pandemic boom knowing full-well that they would end up laying off a bunch of those new hires once things got "normal" again

by mabbo 4y ago

> Shopify, hired like mad during the pandemic boom knowing full-well that they would end up laying off a bunch of those new hires once things got "normal" again. You should read Tobi's post about what happened. That's not how it was. https://news.shopify.com/changes-to-shopifys-team# https://news.shopify.com/changes-to-shopifys-team# > Before the pandemic, ecommerce growth had been steady and predictable. Was this surge to be a temporary effect or a new normal? And so, given what we saw, we placed another bet: We bet that the channel mix - the share of dollars that travel through ecommerce rather than physical retail - would permanently leap ahead by 5 or even 10 years. > It’s now clear that bet didn’t pay off. > Ultimately, placing this bet was my call to make and I got this wrong. Shopify grew like mad, but it wasn't from vanity. If the bet had paid off, it would have meant a permanent step up in company value. Bias: I'm one of the last developers hired before the stock crashed.

sbarre 4y ago
> You should read Tobi's post about what happened. That's not how it was. I did read that back when it was posted. I hope you recognize PR when you see it? Sorry if it came across like I was saying that companies are being evil or bad or vain about how they're hiring. Quite the opposite, and more dangerously, I think companies see nothing wrong with the boom-then-bust approach to hiring, and that it's going to happen more. And so my point here is that employees need to re-think how they look at job security in high-growth companies, and assume that they might be getting hired as part of a "bet" and not as part of a long-term strategy where the company has allocated the money to keep you around, like a lot of people assume when they take a full-time job (vs. a contract). Plenty of larger tech companies that did layoffs, Shopify included, were never in any real financial trouble. They just made bets that didn't pay off, and so they corrected and moved on.
- xal 4y ago
  I write my own posts, not PR. Don’t be so jaded.
  - skipants 4y ago
    He's saying that the Tobi's post was PR, not yours
    - mk12 4y ago
      You're talking to Tobi.
      - skipants 4y ago
        Oh... whoops!
  - RC_ITR 4y ago
    Yeah the point of this entire thread is that your (not unique to you, but you are certainly one of the CEOs that are easiest to vilify when discussing this phenomenon) incentives are so skewed that a given employee should be very cautious about joining your company. You made a bet on e-commerce penetration. The reason it was so easy for you to make that bet is because if you were correct, you’d be even more fabulously wealthy. If you were wrong (like you were), you could simply lay off the employees you hired and tuck the severance package into one quarter of extraordinary charges. The employee view of that is that if you were right, they’d be somewhat wealthy and if you were wrong (which you were) their lives would be completely upended. That’s all. It’s just an attempt to remind people that even CEOs who have good intentions (and author layoff memos in a cerebral tone without the help of PR) can still cause absolute havoc in their lives because of the asymmetry of the power dynamic.
    - nlittlepoole 4y ago
      I agree an employee should be cautious for the exact risks you outlined but I don't know if I'd say this is a function of any power dynamic. Employees should be saving such that they have 3 months of expenses saved away for this exact scenario. Between that, unemployment benefits, and any severance most people should be able to find a new job without "havoc" on their lives.
- deleted 4y ago
  [deleted]
tobyjsullivan 4y ago
> If the bet had paid off… There’s the rub. The parent’s suggestion was that, probably, the new hires weren’t told anything along the lines of “Hey, this is a crazy gamble and it might not work out. Sign here to play.” Yes, it’s implied in “startups”. But companies as large as shopify aren’t generally hiring people from the startup scene anymore. People are (were?) leaving good, stable jobs to go there. Only they know what their expectations were.
- hn_throwaway_99 4y ago
  > "Hey, this is a crazy gamble and it might not work out. Sign here to play." That's a gross mischaracterization, and it weakens your argument. It wasn't a "crazy gamble." It was a calculated risk, one that I think even in hindsight looks like a reasonable one to make at the time. I think the overall question is whether it would have been better for those jobs never to have existed in the first place, rather than having existed for a year or so before being eliminated. And, in truth, I think it's a very fair question - many people might value a higher level of stability, even if it results in overall lower total wages in the long term. For me, though, since I am in an industry that is, overall, growing and not showing any signs of slowing down in the medium-to-long term, I'm fine with taking a job even if I can get laid off at some point in the future. Spotify was very generous with severance IMO, and I don't think I'd have any problem finding another job within 3 months. Again, I totally understand not everyone shares my view, but also other folks should understand that even as an employee I don't think that getting laid off is some sort of unforgivable crime.
  - tobyjsullivan 4y ago
    I don't agree that's a gross mischaracterization. For reference, the exact wording from Tobi Lutke is: > Was this surge to be a temporary effect or a new normal? And so, given what we saw, we placed another bet: We bet that the channel mix - the share of dollars that travel through ecommerce rather than physical retail - would permanently leap ahead by 5 or even 10 years. In other words, it was a gamble that an unprecedented leap in global commercial behaviour was happening. Was there some reason to believe it could? Absolutely. Were the chances still extremely small? Also, absolutely. And when you're "thinking in bets", as Shopify clearly is, you only risk what you can afford to lose. Other people's financial security is basically free for Shopify (a bit of severance in the worst case scenario).
__turbobrew__ 4y ago
So they made a bet and if it doesn’t pay off the devs get fired but the execs making the bet get to stay? Its not like shopify is even that good of a job for developers, they pay well below FAANG. Checking levels, Senior SWEs are only getting like 15k/year in grants which means you are taking on the start up risk without the potential 10x or 100x payoff.
- geoduck14 4y ago
  >but the execs making the bet get to stay What makes you think the execs don't get fired?
- djbebs 4y ago
  Yes, when demand for what you're selling decreases, you will be selling less of it. Doesn't matter if it's labor, or widgets.
- myth_drannon 4y ago
  Below Faangs but much better than your typical Canadian corp. Very smart and effective people I knew moved to Shopify.
throwawaysleep 4y ago
Do you believe him? I certainly don’t believe any of my leaders. One of my orgs had layoffs. Similar story. Now we are hiring like mad again. Truth is that they just jumped like spooked horses and laid off piles of people to keep investors happy for the quarter. That’s all you are to these people.
- myth_drannon 4y ago
  The problem with many layoffs is that corps layoff one org but start hiring in another org. Instead of transfering employees they go the easier route and just layoff.
softveda 4y ago
One thing I don't understand is why you need more engineers to scale your product usage to higher volume. More machines/infrastructure or even support makes sense but devs no. I have same question for Atlassian, they are hiring like crazy.
spaceman_2020 4y ago
All sorts of things are breaking due to major miscalculations during the pandemic. I have friends who work in the fashion industry and they're all worried about muted sales. NOT because of demand, but because they made some serious miscalculations about the kind of clothes people would want in 2022. So many of them went heavy on "comfort wear", thinking that somehow everyone will still be working from home and that going out will be an exception, not the norm. Many even expanded or created entirely new "home" lines that included selling towels, comforters, candle holders, etc. Now they're all finding out that people want normal, going-out clothes again, and their current catalogs just don't line up with the demand. The "new normal" was touted around way too aggressively. At least here in my reality, it's mostly gone back to the old normal with vestiges of the "new" remaining.
- b112 4y ago
  And thus, again, the fashion industry colludes to do evil, teams up with bioterrorists, and releases a new virus, creates a new pandemic, so that their warehouses may empty.

by mabbo 4y ago

sbarre 4y ago

> You should read Tobi's post about what happened. That's not how it was. I did read that back when it was posted. I hope you recognize PR when you see it? Sorry if it came across like I was saying that companies are being evil or bad or vain about how they're hiring. Quite the opposite, and more dangerously, I think companies see nothing wrong with the boom-then-bust approach to hiring, and that it's going to happen more. And so my point here is that employees need to re-think how they look at job security in high-growth companies, and assume that they might be getting hired as part of a "bet" and not as part of a long-term strategy where the company has allocated the money to keep you around, like a lot of people assume when they take a full-time job (vs. a contract). Plenty of larger tech companies that did layoffs, Shopify included, were never in any real financial trouble. They just made bets that didn't pay off, and so they corrected and moved on.

xal 4y ago
I write my own posts, not PR. Don’t be so jaded.
- skipants 4y ago
  He's saying that the Tobi's post was PR, not yours
  - mk12 4y ago
    You're talking to Tobi.
    - skipants 4y ago
      Oh... whoops!
- RC_ITR 4y ago
  Yeah the point of this entire thread is that your (not unique to you, but you are certainly one of the CEOs that are easiest to vilify when discussing this phenomenon) incentives are so skewed that a given employee should be very cautious about joining your company. You made a bet on e-commerce penetration. The reason it was so easy for you to make that bet is because if you were correct, you’d be even more fabulously wealthy. If you were wrong (like you were), you could simply lay off the employees you hired and tuck the severance package into one quarter of extraordinary charges. The employee view of that is that if you were right, they’d be somewhat wealthy and if you were wrong (which you were) their lives would be completely upended. That’s all. It’s just an attempt to remind people that even CEOs who have good intentions (and author layoff memos in a cerebral tone without the help of PR) can still cause absolute havoc in their lives because of the asymmetry of the power dynamic.
  - nlittlepoole 4y ago
    I agree an employee should be cautious for the exact risks you outlined but I don't know if I'd say this is a function of any power dynamic. Employees should be saving such that they have 3 months of expenses saved away for this exact scenario. Between that, unemployment benefits, and any severance most people should be able to find a new job without "havoc" on their lives.
deleted 4y ago
[deleted]

tobyjsullivan 4y ago

> If the bet had paid off… There’s the rub. The parent’s suggestion was that, probably, the new hires weren’t told anything along the lines of “Hey, this is a crazy gamble and it might not work out. Sign here to play.” Yes, it’s implied in “startups”. But companies as large as shopify aren’t generally hiring people from the startup scene anymore. People are (were?) leaving good, stable jobs to go there. Only they know what their expectations were.

hn_throwaway_99 4y ago
> "Hey, this is a crazy gamble and it might not work out. Sign here to play." That's a gross mischaracterization, and it weakens your argument. It wasn't a "crazy gamble." It was a calculated risk, one that I think even in hindsight looks like a reasonable one to make at the time. I think the overall question is whether it would have been better for those jobs never to have existed in the first place, rather than having existed for a year or so before being eliminated. And, in truth, I think it's a very fair question - many people might value a higher level of stability, even if it results in overall lower total wages in the long term. For me, though, since I am in an industry that is, overall, growing and not showing any signs of slowing down in the medium-to-long term, I'm fine with taking a job even if I can get laid off at some point in the future. Spotify was very generous with severance IMO, and I don't think I'd have any problem finding another job within 3 months. Again, I totally understand not everyone shares my view, but also other folks should understand that even as an employee I don't think that getting laid off is some sort of unforgivable crime.
- tobyjsullivan 4y ago
  I don't agree that's a gross mischaracterization. For reference, the exact wording from Tobi Lutke is: > Was this surge to be a temporary effect or a new normal? And so, given what we saw, we placed another bet: We bet that the channel mix - the share of dollars that travel through ecommerce rather than physical retail - would permanently leap ahead by 5 or even 10 years. In other words, it was a gamble that an unprecedented leap in global commercial behaviour was happening. Was there some reason to believe it could? Absolutely. Were the chances still extremely small? Also, absolutely. And when you're "thinking in bets", as Shopify clearly is, you only risk what you can afford to lose. Other people's financial security is basically free for Shopify (a bit of severance in the worst case scenario).

__turbobrew__ 4y ago

So they made a bet and if it doesn’t pay off the devs get fired but the execs making the bet get to stay? Its not like shopify is even that good of a job for developers, they pay well below FAANG. Checking levels, Senior SWEs are only getting like 15k/year in grants which means you are taking on the start up risk without the potential 10x or 100x payoff.

geoduck14 4y ago
>but the execs making the bet get to stay What makes you think the execs don't get fired?
djbebs 4y ago
Yes, when demand for what you're selling decreases, you will be selling less of it. Doesn't matter if it's labor, or widgets.
myth_drannon 4y ago
Below Faangs but much better than your typical Canadian corp. Very smart and effective people I knew moved to Shopify.

throwawaysleep 4y ago

Do you believe him? I certainly don’t believe any of my leaders. One of my orgs had layoffs. Similar story. Now we are hiring like mad again. Truth is that they just jumped like spooked horses and laid off piles of people to keep investors happy for the quarter. That’s all you are to these people.

myth_drannon 4y ago
The problem with many layoffs is that corps layoff one org but start hiring in another org. Instead of transfering employees they go the easier route and just layoff.

softveda 4y ago

One thing I don't understand is why you need more engineers to scale your product usage to higher volume. More machines/infrastructure or even support makes sense but devs no. I have same question for Atlassian, they are hiring like crazy.

spaceman_2020 4y ago

All sorts of things are breaking due to major miscalculations during the pandemic. I have friends who work in the fashion industry and they're all worried about muted sales. NOT because of demand, but because they made some serious miscalculations about the kind of clothes people would want in 2022. So many of them went heavy on "comfort wear", thinking that somehow everyone will still be working from home and that going out will be an exception, not the norm. Many even expanded or created entirely new "home" lines that included selling towels, comforters, candle holders, etc. Now they're all finding out that people want normal, going-out clothes again, and their current catalogs just don't line up with the demand. The "new normal" was touted around way too aggressively. At least here in my reality, it's mostly gone back to the old normal with vestiges of the "new" remaining.

b112 4y ago
And thus, again, the fashion industry colludes to do evil, teams up with bioterrorists, and releases a new virus, creates a new pandemic, so that their warehouses may empty.