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Quoting Bill Gurley on less than 10% layoffs See, that’s the thing. I hate the 5 to 10 percent layoffs. You don’t get any material impact to lowering your ex

by npalli 4y ago

Quoting Bill Gurley on less than 10% layoffs See, that’s the thing. I hate the 5 to 10 percent layoffs. You don’t get any material impact to lowering your expenses. Yet you get all the cultural negatives of having done a layoff. You get 100 percent of the pain and very little gain. And then you’re in retweet land—you end up with two or three of them. https://www.mckinsey.com/capabilities/mckinsey-digital/our-insights/if-youre-going-to-build-something-from-scratch-this-might-be-as-good-a-time-as-in-a-decade https://www.mckinsey.com/capabilities/mckinsey-digital/our-i...

readthenotes1 4y ago
Weird, it's like Gurley never worked with other people. Maybe he was the 1 in 10 jerk people wanted to get rid of?
paxys 4y ago
"We regretfully have to say goodbye to some talented colleagues due to macroeconomic headwinds" sounds a lot more positive than "we stacked ranked all of you and fired the bottom 5%". And how is reducing 5-10% of payroll costs not material impact to the bottom line?
- sokoloff 4y ago
  Having seen a few of these small layoffs over my career, I see Bill’s point, even though it reads as a callous jerk idea. The sense in which he’s dead right though is any layoff is incredibly disruptive, sapping perhaps 3 months (2 minimum) of productivity from the company across the planning, rumors, worrying, resume updating, gossiping, execution, more gossiping, repair/cleanup/reshuffling, and morale recovery. Sapping the productivity of 25% of a year’s payroll to save 5% is usually a bad trade. Fire the very few absolutely terrible employees (as always) and leave the rest, avoiding the drag and drama of a layoff.
  - gonehome 4y ago
    Yeah - my take on what he said is if you're going to do a layoff you should make it worthwhile. Cutting 5% and incurring all that disruption to just have to cut 5% again later is catastrophic. It's way worse to do multiple rounds than to do it correctly all at once and rebuild with the team that's left. Even absent multiple rounds, 5% savings probably isn't worth the downside of doing it at all (which I think was his point).

by npalli 4y ago

readthenotes1 4y ago

Weird, it's like Gurley never worked with other people. Maybe he was the 1 in 10 jerk people wanted to get rid of?

paxys 4y ago

"We regretfully have to say goodbye to some talented colleagues due to macroeconomic headwinds" sounds a lot more positive than "we stacked ranked all of you and fired the bottom 5%". And how is reducing 5-10% of payroll costs not material impact to the bottom line?

sokoloff 4y ago
Having seen a few of these small layoffs over my career, I see Bill’s point, even though it reads as a callous jerk idea. The sense in which he’s dead right though is any layoff is incredibly disruptive, sapping perhaps 3 months (2 minimum) of productivity from the company across the planning, rumors, worrying, resume updating, gossiping, execution, more gossiping, repair/cleanup/reshuffling, and morale recovery. Sapping the productivity of 25% of a year’s payroll to save 5% is usually a bad trade. Fire the very few absolutely terrible employees (as always) and leave the rest, avoiding the drag and drama of a layoff.
- gonehome 4y ago
  Yeah - my take on what he said is if you're going to do a layoff you should make it worthwhile. Cutting 5% and incurring all that disruption to just have to cut 5% again later is catastrophic. It's way worse to do multiple rounds than to do it correctly all at once and rebuild with the team that's left. Even absent multiple rounds, 5% savings probably isn't worth the downside of doing it at all (which I think was his point).