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“On Tuesday we set a new record for total daily transaction volume processed.” How does a company breaking records 36 hours ago conclude they need to lay off

“On Tuesday we set a new record for total daily transaction volume processed.” How does a company breaking records 36 hours ago conclude they need to lay off 14% of the workforce? Even with economic storm clouds on the horizon that seems very jumpy.

im-a-baby 4y ago
Because tech companies underwent an unprecedented hiring spree the last two years. Tech companies were so flush with cash due to the stock market (which also seeped into private valuations) that they basically green lit any headcount request that sounded remotely plausible. This allowed middle managers to grow their fiefdoms so they could add a little line on their resume: "Managed team of X at Stripe." Such spending is totally wasteful and unnecessary.
randomdata 4y ago
Overstaffed in the support department. They realized that they could have just one person watching Hacker News for people having problems.
- rexreed 4y ago
  This is my concern - and it's sad but true. I really cringe worrying about having too many financial eggs in the Stripe basket. But Paypal is no alternative and traditional CC processors are awful. How does one hedge their bets with Stripe? I worry one day we'll hit some transaction "trigger" and then all our money will get locked up in Stripe with no customer support recourse.
marcinzm 4y ago
They hired 150% more people (yes the company grew to 2.5x since 2020) expecting metrics to grow 150% but metrics only are on track for growing 100%.
- pixl97 4y ago
  Heh, the average forum poster, I believe, drives their car at 100MPH and turns 3 feet before a large hole in the road. :D As much as people complain about businesses only looking at the next quarter, they do typically have a longer horizon than that. When you have the US fed raising interest rates every meeting and outright saying "unemployment is going to increase" then you should expect pretty much every business to take note of this and adjust appropriately.
ajaimk 4y ago
They set a new record of x% YoY. They hired expecting that records to be 114% of x%.
hnbad 4y ago
"Breaking records" is just how normal people think about "growth". If they weren't constantly breaking records, we would already call them failing or dying because it means they're stagnating. To be considered successful they need to not only grow but the rate at which they grow needs to increase over time or at least not decline.
jesuscript 4y ago
They are doing what any company does whether the slow down in the economy impacts them or not. They lie and say it impacts them and use it to do a purge. I worked at companies that were in no way impacted by the 2008 financial crisis (in fact, business was booming). Leadership managed to use it as an excuse to do a hiring freeze and plead with existing employees that they are the lucky ones and they need to work harder during “this difficult time”. Facebook and Google just turned to that page recently in the “ruthless business playbook: version 1 (it never needed to be updated since the dawn of time)”. It’s kind of psych 101 stuff. Never underestimate the true nature of business: Amorality. There is some genuine bullshit going on now days because we have record low unemployment and open job positions. If they say it’s all in the service and labor sectors, well, that just means you gave more people an opportunity to earn money. Those people will then go online and spend it, so how the fuck would Stripe get less business? Unless Stripe is genuinely retarded, in which case I wouldn’t blame the 14% layed off, I’d look to replace leadership. But you see, Stripe isn’t retarded. Be ready for your company that’s in some booming industry to use the recession and inflation as an excuse.
- thomasjudge 4y ago
  Just like companies are using the cover of "inflation" to jack up prices (and profits) regardless of if they have cost increases or not
  - heliodor 4y ago
    Who doesn't have cost increases?
    - orra 4y ago
      I’ll rephrase what the other user said: businesses are not typical consumers. And CPI measures typical consumer price inflation. Hence, it's disingenuous for businesses to put up prices by CPI. In fact, businesses putting up prices is often a driver of CPI. Businesses face their own changes in prices, yes, but not by CPI.
mkl95 4y ago
You can break some records while failing to achieve your goals. Companies set unrealistic OKRs all the time.
- skeeter2020 4y ago
  I think's actually required to set unrealistic OKRs, but they're called "stretch" goals, like if only you'd try a leetle bit harder...
akshaykumar90 4y ago
The decision to lay off must be made months ago. The point about setting a new record is to convey and reassure future growth potential to investors and employees (who are also stock holders).
bombolo 4y ago
Because they hire people they don't need to show growth and attract investors.
nytesky 4y ago
I am always wary of non financial metrics. Eyeballs, DAU, transactions. The old yarn about selling $2 for $1 and making it up on volume comes to mind.
onion2k 4y ago
If you think you're going to suffer pain in the future, using your current success to reduce the impact of it seems quite sensible.
newbie2020 4y ago
They look at _trends_ as opposed to where they are now. And perhaps each transaction currently loses them money, so the more transactions they have, the more money they lose. There are lots of factors that go into this than just one metric
mengibar10 4y ago
Speak volumes for the character of the people who are managing the company. Lay off people who helped you get where you are the moment you feel you won't need them in the future. What avenues have they exhausted before laying off workers? For example my company during COVID chose to make a temporary 3% reduction to salaries rather than laying off the people. That was that year's minimum salary increase. Basically they took what they gave that year. Many companies are very disloyal to their workers, vice versa.

im-a-baby 4y ago

Because tech companies underwent an unprecedented hiring spree the last two years. Tech companies were so flush with cash due to the stock market (which also seeped into private valuations) that they basically green lit any headcount request that sounded remotely plausible. This allowed middle managers to grow their fiefdoms so they could add a little line on their resume: "Managed team of X at Stripe." Such spending is totally wasteful and unnecessary.

randomdata 4y ago

Overstaffed in the support department. They realized that they could have just one person watching Hacker News for people having problems.

rexreed 4y ago
This is my concern - and it's sad but true. I really cringe worrying about having too many financial eggs in the Stripe basket. But Paypal is no alternative and traditional CC processors are awful. How does one hedge their bets with Stripe? I worry one day we'll hit some transaction "trigger" and then all our money will get locked up in Stripe with no customer support recourse.

marcinzm 4y ago

They hired 150% more people (yes the company grew to 2.5x since 2020) expecting metrics to grow 150% but metrics only are on track for growing 100%.

pixl97 4y ago
Heh, the average forum poster, I believe, drives their car at 100MPH and turns 3 feet before a large hole in the road. :D As much as people complain about businesses only looking at the next quarter, they do typically have a longer horizon than that. When you have the US fed raising interest rates every meeting and outright saying "unemployment is going to increase" then you should expect pretty much every business to take note of this and adjust appropriately.

ajaimk 4y ago

They set a new record of x% YoY. They hired expecting that records to be 114% of x%.

hnbad 4y ago

"Breaking records" is just how normal people think about "growth". If they weren't constantly breaking records, we would already call them failing or dying because it means they're stagnating. To be considered successful they need to not only grow but the rate at which they grow needs to increase over time or at least not decline.

jesuscript 4y ago

They are doing what any company does whether the slow down in the economy impacts them or not. They lie and say it impacts them and use it to do a purge. I worked at companies that were in no way impacted by the 2008 financial crisis (in fact, business was booming). Leadership managed to use it as an excuse to do a hiring freeze and plead with existing employees that they are the lucky ones and they need to work harder during “this difficult time”. Facebook and Google just turned to that page recently in the “ruthless business playbook: version 1 (it never needed to be updated since the dawn of time)”. It’s kind of psych 101 stuff. Never underestimate the true nature of business: Amorality. There is some genuine bullshit going on now days because we have record low unemployment and open job positions. If they say it’s all in the service and labor sectors, well, that just means you gave more people an opportunity to earn money. Those people will then go online and spend it, so how the fuck would Stripe get less business? Unless Stripe is genuinely retarded, in which case I wouldn’t blame the 14% layed off, I’d look to replace leadership. But you see, Stripe isn’t retarded. Be ready for your company that’s in some booming industry to use the recession and inflation as an excuse.

thomasjudge 4y ago
Just like companies are using the cover of "inflation" to jack up prices (and profits) regardless of if they have cost increases or not
- heliodor 4y ago
  Who doesn't have cost increases?
  - orra 4y ago
    I’ll rephrase what the other user said: businesses are not typical consumers. And CPI measures typical consumer price inflation. Hence, it's disingenuous for businesses to put up prices by CPI. In fact, businesses putting up prices is often a driver of CPI. Businesses face their own changes in prices, yes, but not by CPI.

mkl95 4y ago

You can break some records while failing to achieve your goals. Companies set unrealistic OKRs all the time.

skeeter2020 4y ago
I think's actually required to set unrealistic OKRs, but they're called "stretch" goals, like if only you'd try a leetle bit harder...

akshaykumar90 4y ago

The decision to lay off must be made months ago. The point about setting a new record is to convey and reassure future growth potential to investors and employees (who are also stock holders).

bombolo 4y ago

Because they hire people they don't need to show growth and attract investors.

nytesky 4y ago

I am always wary of non financial metrics. Eyeballs, DAU, transactions. The old yarn about selling $2 for $1 and making it up on volume comes to mind.

onion2k 4y ago

If you think you're going to suffer pain in the future, using your current success to reduce the impact of it seems quite sensible.

newbie2020 4y ago

They look at _trends_ as opposed to where they are now. And perhaps each transaction currently loses them money, so the more transactions they have, the more money they lose. There are lots of factors that go into this than just one metric

mengibar10 4y ago

Speak volumes for the character of the people who are managing the company. Lay off people who helped you get where you are the moment you feel you won't need them in the future. What avenues have they exhausted before laying off workers? For example my company during COVID chose to make a temporary 3% reduction to salaries rather than laying off the people. That was that year's minimum salary increase. Basically they took what they gave that year. Many companies are very disloyal to their workers, vice versa.