4 ms·

FB is making $30+bn a year profit, and is laying off people to reduce costs by $2b. They could continue to pay these people. Large corporations are insane. Eve

FB is making $30+bn a year profit, and is laying off people to reduce costs by $2b. They could continue to pay these people. Large corporations are insane. Every small and medium company would wait to do layoffs until it threatened the business. Some even until after that point. Layoffs are awful. Large corps, nah. Just lay people off if we get a little nervous! Note, I don't think these corps are entitled to employ you. Absolutely not. I just think the corporate situation we got ourselves in is really nasty.

8b16380d 4y ago
Completely agree.
abstractmath 4y ago
> Large corporations are insane. Every small and medium company would wait to do layoffs until it threatened the business. Some even until after that point This is super idealized. How many layoffs have been going on in startup land recently?
- skrebbel 4y ago
  You mean teeny tiny cutesy startups like Stripe and Twilio?
  - abstractmath 4y ago
    Look at the companies on http://layoffs.fyi http://layoffs.fyi Lots of small and medium sized companies, and I know for some that it was not their last move before going under. We had a hiring boom driven by cheap money, which is now ending. Now we get the inverse. Has nothing to do with insane large corps and saintly SMBs.
- tomtheelder 4y ago
  While I agree it's very idealized, a lot of those startups probably are legitimately financially threatened in the immediate term in a way that Meta most certainly isn't.
- roflyear 4y ago
  It is absolutely idealized.
martindbp 4y ago
They are laying off people because the value of the company just tanked 70% in a few months. The value of a company contains all the future estimated discounted earnings, the trend of earnings matters more than current earnings. The actions of a company is determined by what its shareholders want, which is to maximize stock price, not be satisfied with X billions in profits when the stock is down 70%. The actions of companies will remain a mystery to people who do not understand this.
- oblio 4y ago
  The value of a company contains Lalaland logic, as Tesla, Toyota and GameStop prove. The link between actual business logic and company valuation broke down around 2010.
- roflyear 4y ago
  Well, yeah. But I think that mechanism is pretty awful.
  - martindbp 4y ago
    Yeah it's awful, but that's life. FWIW I have family working at Meta so I'm not just being callous.
jbverschoor 4y ago
Small companies don't pay over 200k + perks for someone who just graduated
- pm90 4y ago
  SFBA companies do, actually.
- 22SAS 4y ago
  Trading firms are small companies, and most of us definitely pay that (sometimes a lot more) to new graduates.
xyzzyz 4y ago
They lay people off, because companies always want to lay some people off, and doing so in normal times is even less palatable. Employees are not fungible, and some employees are worth to companies less than the company wants. This is not to say that every single person being laid off is of low value, that’s not true. It’s just it is hard to lay off only low performers, some average or even good performer will always be collateral damage. But, overall, if you want well-performing companies to not do mass layoffs on recession, the only way is to make it more palatable to people to see mass firings in good times.
rajman187 4y ago
> FB is making $30+bn a year profit, and is laying off people to reduce costs by $2b. They could continue to pay these people. The quarterly revenue was about $27bn but net profit $4bn, so you're off by a factor of 7 or more on the estimate. R&D expenses alone are $9bn, and the largest operational expense is employee comp, by a LOT, distant second being data centers. For added measure, they also reduced real estate footprint along with the 11k employees. The company has also essentially doubled in size every year since ~2013, and that was certainly encouraged by false positives in terms of future projections when the pandemic hit. So this is really not surprising, and a major cost-saving function for them.
- roflyear 4y ago
  Mmm, I was looking at 2021 profit. Anyway, 16b a year is not a factor of 7 off from 30b.
  - rajman187 4y ago
    Yeah 2020-21 was wild. Revenue is not profit, though.
  - RandomBK 4y ago
    7.4% of profit (2/27) versus 50% of profit (2/4) was the factor of ~7 parent was referring to. Granted these are comparing annual cost versus quarterly figures, but the overall narrative still stands.
- riku_iki 4y ago
  > R&D expenses alone are $9bn Are RSUs included into this number?
  - _zoltan_ 4y ago
    why would RSU (a comp element) be included in R&D spending?
    - disgruntledphd2 4y ago
gregshap 4y ago
In the last four quarters FB's reported profit went from $10B to $7.5B to $6B to $4B. The business is threatened.

8b16380d 4y ago

Completely agree.

abstractmath 4y ago

> Large corporations are insane. Every small and medium company would wait to do layoffs until it threatened the business. Some even until after that point This is super idealized. How many layoffs have been going on in startup land recently?

skrebbel 4y ago
You mean teeny tiny cutesy startups like Stripe and Twilio?
- abstractmath 4y ago
  Look at the companies on http://layoffs.fyi http://layoffs.fyi Lots of small and medium sized companies, and I know for some that it was not their last move before going under. We had a hiring boom driven by cheap money, which is now ending. Now we get the inverse. Has nothing to do with insane large corps and saintly SMBs.
tomtheelder 4y ago
While I agree it's very idealized, a lot of those startups probably are legitimately financially threatened in the immediate term in a way that Meta most certainly isn't.
roflyear 4y ago
It is absolutely idealized.

martindbp 4y ago

They are laying off people because the value of the company just tanked 70% in a few months. The value of a company contains all the future estimated discounted earnings, the trend of earnings matters more than current earnings. The actions of a company is determined by what its shareholders want, which is to maximize stock price, not be satisfied with X billions in profits when the stock is down 70%. The actions of companies will remain a mystery to people who do not understand this.

oblio 4y ago
The value of a company contains Lalaland logic, as Tesla, Toyota and GameStop prove. The link between actual business logic and company valuation broke down around 2010.
roflyear 4y ago
Well, yeah. But I think that mechanism is pretty awful.
- martindbp 4y ago
  Yeah it's awful, but that's life. FWIW I have family working at Meta so I'm not just being callous.

jbverschoor 4y ago

Small companies don't pay over 200k + perks for someone who just graduated

pm90 4y ago
SFBA companies do, actually.
22SAS 4y ago
Trading firms are small companies, and most of us definitely pay that (sometimes a lot more) to new graduates.

xyzzyz 4y ago

They lay people off, because companies always want to lay some people off, and doing so in normal times is even less palatable. Employees are not fungible, and some employees are worth to companies less than the company wants. This is not to say that every single person being laid off is of low value, that’s not true. It’s just it is hard to lay off only low performers, some average or even good performer will always be collateral damage. But, overall, if you want well-performing companies to not do mass layoffs on recession, the only way is to make it more palatable to people to see mass firings in good times.

rajman187 4y ago

> FB is making $30+bn a year profit, and is laying off people to reduce costs by $2b. They could continue to pay these people. The quarterly revenue was about $27bn but net profit $4bn, so you're off by a factor of 7 or more on the estimate. R&D expenses alone are $9bn, and the largest operational expense is employee comp, by a LOT, distant second being data centers. For added measure, they also reduced real estate footprint along with the 11k employees. The company has also essentially doubled in size every year since ~2013, and that was certainly encouraged by false positives in terms of future projections when the pandemic hit. So this is really not surprising, and a major cost-saving function for them.

roflyear 4y ago
Mmm, I was looking at 2021 profit. Anyway, 16b a year is not a factor of 7 off from 30b.
- rajman187 4y ago
  Yeah 2020-21 was wild. Revenue is not profit, though.
- RandomBK 4y ago
  7.4% of profit (2/27) versus 50% of profit (2/4) was the factor of ~7 parent was referring to. Granted these are comparing annual cost versus quarterly figures, but the overall narrative still stands.
riku_iki 4y ago
> R&D expenses alone are $9bn Are RSUs included into this number?
- _zoltan_ 4y ago
  why would RSU (a comp element) be included in R&D spending?
  - disgruntledphd2 4y ago

gregshap 4y ago

In the last four quarters FB's reported profit went from $10B to $7.5B to $6B to $4B. The business is threatened.