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Stripe is just trying to do layoff without paying severance
- sposeray 4y ago[dead]
- aeternum 4y agoA better question is why did they stop giving low scores to 10-15% of staff? Everyone gets a gold star performance reviews?
- dnissley 4y agoMost likely because of the pandemic -- that's what happened at other companies, e.g. Meta
- floober 4y agoRight? Also these companies probably hired a lot of folks during the pandemic, and also relaxed their performance criteria while everyone was adjusting to remote work... So this just sounds like some folks are being caught off guard by the fact that yes, there are real performance expectations and you might not be meeting them.
- falcolas 4y agoIf everyone is doing their jobs, there's no reason for an arbitrary % of them to get low scores. Giving low scores is, as called out in the twitter thread, stack and ranking managerial BS which is toxic to its employees. Low and high performing employees.
- deleted 4y ago[deleted]
- Raidion 4y agoYou can choose between one of two problems: If you don't have strong incentives to fire low performers (aka stack ranking), end up with a slowly deteriorating engineering culture as more capable people end up carrying the weight of worse hires that don't get managed out. Those devs enjoy their jobs less and leave for better pastures (because they're options are good), while worse devs stick around longer (because their options aren't as good). If you do have strong incentives to fire people, you end up breaking up high performance teams, and create a culture of hire-to-fire and "mercenary" devs. This impacts your culture and forces out "good enough" employees and causes higher recruiting costs. I don't fully understand if either of those are right in this situation, but I understand how people who felt they were with one type of company can be upset if that company changes its "culture" without a lot of heads up.
- ncallaway 4y agoRemoving a mandate that 10-15% of staff receives a low rating is not the same as giving everyone a gold star. You could presumably still give low ratings before when it was merited.
- patmcc 4y agoThere's a big difference between giving low scores to people who aren't performing up to some standard (whether than makes up 2% or 10% or 40% of your workforce), and always giving low scores to 15% of staff even if they're actually fine. 'Stack Ranking' is widely considered poor management.
- aeternum 4y agoI'd be willing to bet every manager in the company believes all their employees are in the top 60-70% in terms of performance and every employee believes similar.
- rockostrich 4y agoThey have (had?) performance-based RSU bonuses so my guess is that the status quo was giving "meets expectations" to everyone but top performers so everyone was happy getting their bonus.
- ElevenLathe 4y agoThis is a neat hack by management. It would be great if there was a union that they had to bargain with before doing this kind of thing.
- whatshisface 4y agoGetting around severance is, believe it or not, illegal with or without unions.
- ElevenLathe 4y agoSure, but who is going to bat for you except a union lawyer? Your state AG? Fat chance.
- whatshisface 4y agoWell, we are talking about software engineers, they are not locked out of the legal system economically.
- angry_octet 4y agoIndividually, even people with $500k/year salaries are minnows compared to the resources of the company, especially a VC backed behemoth like Stripe. Only collectively do you have strength.
- shagie 4y agohttps://www.dol.gov/general/topic/wages/severancepay https://www.dol.gov/general/topic/wages/severancepay > Severance pay is often granted to employees upon termination of employment. It is usually based on length of employment for which an employee is eligible upon termination. There is no requirement in the Fair Labor Standards Act (FLSA) for severance pay. Severance pay is a matter of agreement between an employer and an employee (or the employee's representative). The Employee Benefits Security Administration (EBSA) may be able to assist an employee who did not receive severance benefits under their employer-sponsored plan. Please contact EBSA if you have any questions.
- tfehring 4y agoI'm skeptical that layoffs are the real reason behind this, since it seems like a pretty ineffective way to trim headcount. Even if this results in an additional 10%[0] of employees getting "partially meets" where they would have previously gotten "meets," that'll only generate what, 2% additional attrition per year? I know "tech layoffs" generates more clicks right now than "tech performance management," but to me the framing here just doesn't make a lot of sense. [0] The article says they're going to be enforcing their "10% to 15% target" now, and presumably some people are already getting those ratings.
- blueblimp 4y agoWhy is this random person's speculation linked as if it has credibility?
- tayo42 4y ago
- patmcc 4y agoIt's legally required in many jurisdictions. I think it's perfectly reasonable to "feel entitled" to things I'm legally entitled to.
- tayo42 4y agofrom what i read that isn't true in california at least.
- shagie 4y agoCould you identify the jurisdictions? The only sources that I've found on it are: https://www.dol.gov/general/topic/wages/severancepay https://www.dol.gov/general/topic/wages/severancepay > There is no requirement in the Fair Labor Standards Act (FLSA) for severance pay. Severance pay is a matter of agreement between an employer and an employee (or the employee's representative). https://www.sillscummis.com/severance-to-pay-or-not-to-pay/ https://www.sillscummis.com/severance-to-pay-or-not-to-pay/ > As of this writing, no federal or state law obligates employers to pay severance to employees upon termination. Under the federal Worker Adjustment and Retraining Notification (“WARN”) Act and some state equivalents, employers may be required to pay terminated employees wages and benefits for a certain period if they fail to provide adequate notice to those employees as part of a qualifying mass layoff or plant closing. However, these payments under the WARN Act are penalties for non-compliance with the notice requirement rather than true severance and, moreover, can easily be avoided by providing the required notice.
- patmcc 4y agoSure, a couple points. 1. More than the US exists. Stripe has a headquarters in Ireland (which does have severance laws) and employees in many countries. And my point was general, not just pertaining to Stripe. 2. If (and I don't know the specifics) Stripe has made a contract that spells out particular severance policies, the employees are legally entitled to that. Contracts are legally binding. 3. The WARN Act requires notice in layoffs, but it's almost unheard of in tech companies to say "hey, we're going to lay you off in 60 days". People get permissions revoked and walked out the door. In those cases, severance is required. You can call it "penalties for non-compliance with the notice requirement" but if it looks like a duck and quacks like a duck, well, it's severance.
- JamesBarney 4y agoI've been a manager a few places and been involved in a few performance related firings. None of them were fired for cause in the sense they wouldn't have gotten a severance or unemployment. Usually fired for cause i.e. no severance or unemployment is reserved for gross misconduct.
- tssva 4y agoAlthough layoffs often involve severance pay it is not a requirement. Also, in most states being fired for poor performance vs misconduct doesn't disqualify you from receiving unemployment.
- paxys 4y agoStripe had 1500 employees in 2019. Today it has over 8000. The same pattern has applied throughout the tech industry during the pandemic, and it is obvious that not all of these mass hires are well suited for the job. Now that the unlimited money printer has dried up and companies are forced to tighten budgets, low performers will start to face the pressure everywhere.
- williamcotton 4y agoI'm not sure that it has anything to do with a given individual low performer. It could very well be that these companies over-hired and were not structured to manage a giant influx of software developers. Having an unlimited money printer seems like a breeding ground for mismanagement.
- darth_avocado 4y ago- Although unethical, stripe is hardly the only company to do it. - If you get cut for performance reasons, most companies still provide severance. - This is not a one off thing. Most companies have 10-15% quotas for “low performance” every year and people are let go on a regular basis. - Most other employers in tech know this as a practice and getting fired is not that big of a deal. - if you’re let go for performance, you can still file for Unemployment as long as there was no misconduct on your end. Although I don’t agree with these tactics and in my long career, have been at the receiving end of it a couple times, I would still say the tweet is a little alarmist. It makes sense in other industries, but in tech, it hardly matters if it is a layoff or a performance related loss of employment. Besides we are all talking as if the employees don’t know the risk of working for Companies like stripe. For every stripe engineer that makes 400k, there is an engineer working at another company at 200k that is equally capable of getting that 400k job. There is a reason they don’t do that.
- wahnfrieden 4y agoare you just saying, in detail, that exploitative practices are normal in the countries they operate in? these practices are laughably abusive or illegal in some countries, why should we respect status quo here? that's an impressive display of solidarity with capital
- darth_avocado 4y agoBecause you get paid for it? Countries that have more pro worker legislation, also tend to have lower wages? At the end of the day, it’s not a minimum wage job we are talking about, it is a multiple of 6 figures job. [edit] Besides, we are all talking about the downside of the current setup as if there is no upside. If there is only upside to fixing the problem being discussed here, then there is a very straightforward solution: Unions. But somehow, tech workers are very less likely to enter unions. Why is that? [hint: money. With more protections, you get paid less] It is a zero sum game. There is only a fixed budget that companies have. If you want more benefits, it comes at a cost of lower income. It’s really straightforward.
- achalshah 4y agoIs there any difference between this and the kind of forced attrition that Meta and Google have also signaled recently?
- harryh 4y agoThis post should be flagged off HN. Everything in the tweet is factually incorrect. - Companies aren't required to pay severance when doing layoffs. - There is no evidence that Stripe isn't paying severance when firing for performance (I'd be shocked if they aren't) - Employees fired for performance are absolutely eligible for state unemployment benefits.
- wahnfrieden 4y agoyour comment ought to be flagged off hn as factually incorrect - they are required in canada, where stripe also operates an office
- harryh 4y agoFair point about Canadian law being different than US law. For the < 5% of Stripe employees there, that does appear to be true. Though I would again point to my 2nd bullet point: - There is no evidence that Stripe isn't paying severance when firing for performance (I'd be shocked if they aren't)
- Kranar 4y agoStripe operates a single office in Toronto, Canada. No one would be qualified for severance since severance is only eligible after 5 years of employment and Stripe's office has only been open for 2 years.
- wahnfrieden 4y agostripe has acquihired in canada
- deleted 4y ago[deleted]
- likpok 4y ago> - Companies aren't required to pay severance when doing layoffs. The WARN act requires advance notice of 60 days. I think most companies prefer to pay severance, but it's pretty much equivalent. California has more strict rules (mostly excluding a bunch of excuses to skip complying). So yes, Stripe would technically not be required to give severance in the case of a layoff. But they'd be required to keep the people employed for 60 days after telling them they're going to be laid off. I'm not sure there's much of a distinction?
- __derek__ 4y agoIt looks like the tweet was deleted.
- remram 4y agoTweet was deleted, it quoted https://twitter.com/Techmeme/status/1583119981134286849 https://twitter.com/Techmeme/status/1583119981134286849 which still exists.