6 ms·

I'm wondering what data really drives the back-and-forth at big tech. We've seen google, amazon, microsoft, meta, etc.. do hiring freezes, then layoffs. Hiring

I'm wondering what data really drives the back-and-forth at big tech. We've seen google, amazon, microsoft, meta, etc.. do hiring freezes, then layoffs. Hiring freeze, then back open, or layoffs then more layoffs later. I would expect a longer term plan than just looking forward or backwards one quarter which seems like what has been happening the last year. I would assume they had better information and insights than common investors, but the activity out of these companies in relation to hiring and layoffs has seemed to be as sudden as people changing their stock allocations.

anonporridge 4y ago
Mass layoffs give you the opportunity to quickly purge poor performers without as much paperwork. It's advantageous to have regular rolling layoffs because of this if you can justify them by economic conditions. There's also an effect of wanting to do smaller, pulsating layoffs over the course of many months or even years rather than one massive layoff of the size you actually need, because ultimately no one knows exactly how the machine of a corporation works, and you have to be careful not to cut so deep that you go beyond cutting out fat and start to damage critical systems. A rapid, 90% loss of workforce like what happened at Twitter might be what the company ultimately needed, but cutting that fast and deep is an insanely risky operation that could lead to a company hobbling along in a compensatory state until it finally falls to decompensatory systems collapse that you can't recover from.
- MuffinFlavored 4y ago
  What % of their work force is 11k employees? Article says 5%. Would also be curious to know what % of the 11k are engineers/breakdown by department/org, etc.
  - anonporridge 4y ago
    Yeah, 5% is a small, manageable number. Small enough that if you find you accidentally cut important people or roles, you can quickly get them back. The point in my second paragraph is that if the company actually needs a 15% layoff to maintain itself long term, it would be safest to do it in three smaller 5% waves rather than one fell swoop. After each layoff, you let the system settle and recover, making sure that the body is still generally healthy before continuing with the next operation.
    - estebank 4y ago
      > it would be safest to do it in three smaller 5% waves rather than one fell swoop This disregards the effect of repeated layoffs on the morale and mental health of human beings, which affects how "the system" settles and recovers.
      - anonporridge 4y ago
        Absolutely! I think it really depends on the overall health and strength of the corporate body and the external environmental conditions it's struggling to survive in. Sometimes ripping off the bandaid quickly is the best of many bad options. However, you also have to consider that seeing a larger percentage of your teammates cut loose might be more psychologically damaging than just that one guy who everyone kind of knew was a poor performer anyway.
      - gota 4y ago
        Part of the second and third wave can take the form of a hiring freeze or slowdown. People who quit are not replaced and soon you have a 5% reduction in headcount
        Aperocky 4y ago
        Only the best (or the dauntless, but they are a minority) quit in the present climate, soon the corporation will have a 3-5% reduction in their best performers.
        marcosdumay 4y ago
        So you further evaporate the Dead Sea? How many competent people do you expect to stay until the end?
    - jvanderbot 4y ago
      Generally speaking, they probably want about 5% loss / year, so they can continuously hire new starts and eliminate vacated positions as required.
- gowld 4y ago
  Why? What's wrong with firing people during other economic conditions? Why would the paperwork be any different, whether it's a small layoff or a big payoff? Ctrl-C/Ctrl-V is cheap, Microsoft implemented it many times in many products.
  - t-writescode 4y ago
    Humans fire other humans. Layoffs allow for severance and unemployment, which can make the pain of firing someone and all the externalities that come with it far easier for a boss to swallow.
  - munificent 4y ago
    > What's wrong with firing people during other economic conditions? Layoffs have a huge psychological impact on the people who didn't get cut. If you do layoffs at a time when the economy is booming and jobs are easy to find, you risk losing your best performers who don't want to be at a company that fires friends of theirs. It's easier to fire people when jobs are scarce and people are already spooked and disinclined to try to switch jobs.
  - drchopchop 4y ago
    Firing IC's at large corporations usually involves some sort of a individual coaching/PIP plan. This takes time for managers and HR to write and implement, takes N weeks of observation, and creates nervousness in coworkers who think they might be next. Much easier to do a Thanos-style snap and get rid of X% all at once, with no pre-warning or reasons required besides "challenging economic conditions".
  - therealdrag0 4y ago
    It can be tedious to fire people. I know a manager at MS that has been struggling with a terrible performer for over a year. They are just now getting to the point of going through the processes (first gotta do RCA and try to fix etc) and having a paper trail down with HR to be able to fire them.
  - moonchrome 4y ago
    If you heard Microsoft just did 11k layoffs and then you got a job offer from them how does that sound to you ? To me it sounds like I could be in the next round if I get hired on the wrong team.
- tikhonj 4y ago
  > Mass layoffs give you the opportunity to quickly purge poor performers without as much paperwork. It's advantageous to have regular rolling layoffs because of this if you can justify them by economic conditions. I've heard people say this, but it seems contrary to how layoffs are run in practice: • entire teams or divisions are often laid off with no eye towards individual employees' tenure, experience or skills • decisions happen on a condensed time scale by higher-level executives—not exactly conducive to a nuanced view of individual employees' performance, which companies struggle to assess effectively at the best of times The "common knowledge" about what layoffs accomplish and why they're necessary really doesn't match what happens on the ground.
  - kristopolous 4y ago
    I've never seen a cold and calculated layoff. It's always been exasperated irrational arm-waving risk mitigation. The "good" people aren't kept - instead it's the ones that can navigate the political waters. For every one competent executive there seems to be 3 deluded narcissistic idiots who will slash and burn people who are overqualified and under-utilized for the positions they've been incompetently assigned. Now before you think I'm a victim of layoffs, I'm actually the political navigator. I constantly survive layoffs as I see the most talented people get let go and the best teams get broken up and reassigned, it's nuts. One of the best techniques is to get yourself into what I call a "management island" - essentially you have either 0 or many bosses, just not 1. The next one is to be associated with a small bet - essentially a cheap investment that may yield a great long-term payoff, preferably related to the company cash cow. A third technique is to not attend too many events. Vagueness works in your favor. People should know generally but not specifically what you do. With details comes critiques so keep it ambiguous by staying quiet. If you survive a layoff then you must not let a good crisis go to waste. Use the fog of the firing and the power vacuum to resituate yourself into this political dynamic as the dust settles. Of course these techniques only work at large companies. I learned all of these techniques from years in management. There's more but that's a good start
    - adasdasdas 4y ago
      Yup, most mass layoffs are done without consulting the directly/skip managers who actually know who the strong performers are.
- spacemadness 4y ago
  Why are we spreading the “poor performers are the ones let go” trope that hurts anyone laid off? That’s a very dangerous assumption to be spreading around blindly.
  - ZhadruOmjar 4y ago
    It's simply not true and very observable if you've ever been at a company that does layoffs. Plenty of good teams get let go or entire groups in the company from management down are let go, it just doesn't make sense that they would all be "low-performers". Some low-performers will be caught up in layoffs, sure, but plenty will remain at the company too.
    - andromeduck 4y ago
      Might be conflating groups with individuals. The teams/orgs that tend to be hit the hardest tend to be not the most productive/cutting edge except when they're research teams way out on the horizon.
- testrun 4y ago
  This is one of the worst things you can do in a company. GE did it starting with Jack Welch and since then the company is not the same.
- datavirtue 4y ago
  Logic doesn't hold up. The same hiring practices you used to acquire "poor performers" (or culture to create them) are still in place.
- ElectricSpoon 4y ago
  > Mass layoffs give you the opportunity to quickly purge poor performers That would be true for poor performing projects. Try a bunch of projects; many don't take off; cut the chaff all at once. What I've seen in various companies were cuts of all kinds of employees, regardless of their individual performance. Large cuts weren't about the employees but about the projects or teams. I've also lived through a cut which was basically reducing headcount across all teams. Cutting 11k employees isn't a micro-management thing; individual performers get hit all the same. The fallback of some such cuts was that it took years to later re-acquire competent employees, especially since they were offering work conditions average for the market. TLDR don't stay too long on projects or teams which aren't lucrative for the company, unless they are fun and you don't mind getting ejected from the company when cut comes.
- raydev 4y ago
  > Mass layoffs give you the opportunity to quickly purge poor performers without as much paperwork This is repeated a lot but having lived through 3 layoffs (and survived 2) in my career, that has never been the case. Every time it seemed random, one in particular where EMs were upset that they didn't have the chance to pick their faves.
CobrastanJorji 4y ago
I imagine it's three things. First and foremost, interest rates are up. Some development opportunities only make sense when loans are basically free. Second, the market's down, firing a bunch of people is a good way to boost stock prices in the short term, and people making these decisions are often primarily motivated by short term stock price gains. Third, big tech executives are heavily influenced by trends, they all talk to each other, and layoffs are trendy right now. Layoffs are probably a bad idea, in general, given how expensive it is to hire new devs and bring them up to speed, but on the other hand, it's probably a pretty good way to eliminate orgs you wanted to get rid of anyway while blaming the economy. I'm sure it's not a coincidence that so many of Amazon's layoffs came from Alexa.
- ethbr0 4y ago
  Assume a constant need to fire a decent chunk of the company. If you fire when everyone else is hiring, the market asks you if your growth prospects have dimmed. If you fire when everyone else is firing, the market says you're being financially responsible.
  - gowld 4y ago
    > Assume a constant need to fire a decent chunk of the company. Why? If you are so good at identifying poor performers, fire them, and reap the profits of being leaner, more effective organization. "The market" is a boogeyman used to rationalized everything.
    - yCombLinks 4y ago
      Because every time you want to build a new product you risk that no one ends up wanting the product, or not enough people to justify keeping it going. Alternately once you have depleted all of your current ideas you don't have anything productive for those people to do.
      - marcosdumay 4y ago
        > Alternately once you have depleted all of your current ideas you don't have anything productive for those people to do. Ok, that can possibly happen. But if it constantly happens, you have problems.
rodgerd 4y ago
I've been privy to execs sharing the "why" for stacked ranking, open plan, layoffs, and various other decisions. If you had some naive belief in the efficacy of capitalism or the idea that CEOs are highly paid because of their brilliance you'd be very disappointed to discover how often the answer is "we're doing this because other companies like us are doing this", or "because an analyst told us we should do this".
- cscurmudgeon 4y ago
  If people were paid by brilliance most celebrities and politicians would be poor and mathematicians would be billionaires. The world doesn’t work that way.
  - kmonsen 4y ago
    I think the overall spirit of your argument is true, but I think you define brilliance too narrowly with saying it primarily applies to mathematicians.
thrashh 4y ago
Well if you’re not hiring, your competitor is picking up the talent Plus the more people that you have, the faster you can get competitive products out to market Could be a damned if you do, dammed if you don’t situation
- redtriumph 4y ago
  > Plus the more people that you have, the faster you can get competitive products out to market This is not always true. Do you have citation to back this up?
  - schlauerfox 4y ago
    Yeah, effectiveness is something too in monopoly tech firms. The Mythical Man Month https://archive.org/details/MythicalManMonth https://archive.org/details/MythicalManMonth Steve Jobs on product dev vs marketing teams https://www.youtube.com/watch?v=P4VBqTViEx4 https://www.youtube.com/watch?v=P4VBqTViEx4
  - ipaddr 4y ago
    If you rephrased to say you have more opportunities to take more bets.
  - thrashh 4y ago
    Well I said “can.” It’s not always true but you can’t do the work of 6 people with 2. I’ve definitely been on teams blocked by the number of people where getting even one more QA person sped things up a lot.
SkyPuncher 4y ago
IMO, cheap capital meant companies could take "dumb" risks. Now that interest rates are going up, they need more plausible returns on investment.
thedougd 4y ago
Maybe they're doomed to follow the footsteps of their predecessors, IBM, HP, Cisco, Nortel, Dell, Intel, etc.

anonporridge 4y ago

Mass layoffs give you the opportunity to quickly purge poor performers without as much paperwork. It's advantageous to have regular rolling layoffs because of this if you can justify them by economic conditions. There's also an effect of wanting to do smaller, pulsating layoffs over the course of many months or even years rather than one massive layoff of the size you actually need, because ultimately no one knows exactly how the machine of a corporation works, and you have to be careful not to cut so deep that you go beyond cutting out fat and start to damage critical systems. A rapid, 90% loss of workforce like what happened at Twitter might be what the company ultimately needed, but cutting that fast and deep is an insanely risky operation that could lead to a company hobbling along in a compensatory state until it finally falls to decompensatory systems collapse that you can't recover from.

MuffinFlavored 4y ago
What % of their work force is 11k employees? Article says 5%. Would also be curious to know what % of the 11k are engineers/breakdown by department/org, etc.
- anonporridge 4y ago
  Yeah, 5% is a small, manageable number. Small enough that if you find you accidentally cut important people or roles, you can quickly get them back. The point in my second paragraph is that if the company actually needs a 15% layoff to maintain itself long term, it would be safest to do it in three smaller 5% waves rather than one fell swoop. After each layoff, you let the system settle and recover, making sure that the body is still generally healthy before continuing with the next operation.
  - estebank 4y ago
    > it would be safest to do it in three smaller 5% waves rather than one fell swoop This disregards the effect of repeated layoffs on the morale and mental health of human beings, which affects how "the system" settles and recovers.
    - anonporridge 4y ago
      Absolutely! I think it really depends on the overall health and strength of the corporate body and the external environmental conditions it's struggling to survive in. Sometimes ripping off the bandaid quickly is the best of many bad options. However, you also have to consider that seeing a larger percentage of your teammates cut loose might be more psychologically damaging than just that one guy who everyone kind of knew was a poor performer anyway.
    - gota 4y ago
      Part of the second and third wave can take the form of a hiring freeze or slowdown. People who quit are not replaced and soon you have a 5% reduction in headcount
      - Aperocky 4y ago
        Only the best (or the dauntless, but they are a minority) quit in the present climate, soon the corporation will have a 3-5% reduction in their best performers.
      - marcosdumay 4y ago
        So you further evaporate the Dead Sea? How many competent people do you expect to stay until the end?
  - jvanderbot 4y ago
    Generally speaking, they probably want about 5% loss / year, so they can continuously hire new starts and eliminate vacated positions as required.
gowld 4y ago
Why? What's wrong with firing people during other economic conditions? Why would the paperwork be any different, whether it's a small layoff or a big payoff? Ctrl-C/Ctrl-V is cheap, Microsoft implemented it many times in many products.
- t-writescode 4y ago
  Humans fire other humans. Layoffs allow for severance and unemployment, which can make the pain of firing someone and all the externalities that come with it far easier for a boss to swallow.
- munificent 4y ago
  > What's wrong with firing people during other economic conditions? Layoffs have a huge psychological impact on the people who didn't get cut. If you do layoffs at a time when the economy is booming and jobs are easy to find, you risk losing your best performers who don't want to be at a company that fires friends of theirs. It's easier to fire people when jobs are scarce and people are already spooked and disinclined to try to switch jobs.
- drchopchop 4y ago
  Firing IC's at large corporations usually involves some sort of a individual coaching/PIP plan. This takes time for managers and HR to write and implement, takes N weeks of observation, and creates nervousness in coworkers who think they might be next. Much easier to do a Thanos-style snap and get rid of X% all at once, with no pre-warning or reasons required besides "challenging economic conditions".
- therealdrag0 4y ago
  It can be tedious to fire people. I know a manager at MS that has been struggling with a terrible performer for over a year. They are just now getting to the point of going through the processes (first gotta do RCA and try to fix etc) and having a paper trail down with HR to be able to fire them.
- moonchrome 4y ago
  If you heard Microsoft just did 11k layoffs and then you got a job offer from them how does that sound to you ? To me it sounds like I could be in the next round if I get hired on the wrong team.
tikhonj 4y ago
> Mass layoffs give you the opportunity to quickly purge poor performers without as much paperwork. It's advantageous to have regular rolling layoffs because of this if you can justify them by economic conditions. I've heard people say this, but it seems contrary to how layoffs are run in practice: • entire teams or divisions are often laid off with no eye towards individual employees' tenure, experience or skills • decisions happen on a condensed time scale by higher-level executives—not exactly conducive to a nuanced view of individual employees' performance, which companies struggle to assess effectively at the best of times The "common knowledge" about what layoffs accomplish and why they're necessary really doesn't match what happens on the ground.
- kristopolous 4y ago
  I've never seen a cold and calculated layoff. It's always been exasperated irrational arm-waving risk mitigation. The "good" people aren't kept - instead it's the ones that can navigate the political waters. For every one competent executive there seems to be 3 deluded narcissistic idiots who will slash and burn people who are overqualified and under-utilized for the positions they've been incompetently assigned. Now before you think I'm a victim of layoffs, I'm actually the political navigator. I constantly survive layoffs as I see the most talented people get let go and the best teams get broken up and reassigned, it's nuts. One of the best techniques is to get yourself into what I call a "management island" - essentially you have either 0 or many bosses, just not 1. The next one is to be associated with a small bet - essentially a cheap investment that may yield a great long-term payoff, preferably related to the company cash cow. A third technique is to not attend too many events. Vagueness works in your favor. People should know generally but not specifically what you do. With details comes critiques so keep it ambiguous by staying quiet. If you survive a layoff then you must not let a good crisis go to waste. Use the fog of the firing and the power vacuum to resituate yourself into this political dynamic as the dust settles. Of course these techniques only work at large companies. I learned all of these techniques from years in management. There's more but that's a good start
  - adasdasdas 4y ago
    Yup, most mass layoffs are done without consulting the directly/skip managers who actually know who the strong performers are.
spacemadness 4y ago
Why are we spreading the “poor performers are the ones let go” trope that hurts anyone laid off? That’s a very dangerous assumption to be spreading around blindly.
- ZhadruOmjar 4y ago
  It's simply not true and very observable if you've ever been at a company that does layoffs. Plenty of good teams get let go or entire groups in the company from management down are let go, it just doesn't make sense that they would all be "low-performers". Some low-performers will be caught up in layoffs, sure, but plenty will remain at the company too.
  - andromeduck 4y ago
    Might be conflating groups with individuals. The teams/orgs that tend to be hit the hardest tend to be not the most productive/cutting edge except when they're research teams way out on the horizon.
testrun 4y ago
This is one of the worst things you can do in a company. GE did it starting with Jack Welch and since then the company is not the same.
datavirtue 4y ago
Logic doesn't hold up. The same hiring practices you used to acquire "poor performers" (or culture to create them) are still in place.
ElectricSpoon 4y ago
> Mass layoffs give you the opportunity to quickly purge poor performers That would be true for poor performing projects. Try a bunch of projects; many don't take off; cut the chaff all at once. What I've seen in various companies were cuts of all kinds of employees, regardless of their individual performance. Large cuts weren't about the employees but about the projects or teams. I've also lived through a cut which was basically reducing headcount across all teams. Cutting 11k employees isn't a micro-management thing; individual performers get hit all the same. The fallback of some such cuts was that it took years to later re-acquire competent employees, especially since they were offering work conditions average for the market. TLDR don't stay too long on projects or teams which aren't lucrative for the company, unless they are fun and you don't mind getting ejected from the company when cut comes.
raydev 4y ago
> Mass layoffs give you the opportunity to quickly purge poor performers without as much paperwork This is repeated a lot but having lived through 3 layoffs (and survived 2) in my career, that has never been the case. Every time it seemed random, one in particular where EMs were upset that they didn't have the chance to pick their faves.

CobrastanJorji 4y ago

I imagine it's three things. First and foremost, interest rates are up. Some development opportunities only make sense when loans are basically free. Second, the market's down, firing a bunch of people is a good way to boost stock prices in the short term, and people making these decisions are often primarily motivated by short term stock price gains. Third, big tech executives are heavily influenced by trends, they all talk to each other, and layoffs are trendy right now. Layoffs are probably a bad idea, in general, given how expensive it is to hire new devs and bring them up to speed, but on the other hand, it's probably a pretty good way to eliminate orgs you wanted to get rid of anyway while blaming the economy. I'm sure it's not a coincidence that so many of Amazon's layoffs came from Alexa.

ethbr0 4y ago
Assume a constant need to fire a decent chunk of the company. If you fire when everyone else is hiring, the market asks you if your growth prospects have dimmed. If you fire when everyone else is firing, the market says you're being financially responsible.
- gowld 4y ago
  > Assume a constant need to fire a decent chunk of the company. Why? If you are so good at identifying poor performers, fire them, and reap the profits of being leaner, more effective organization. "The market" is a boogeyman used to rationalized everything.
  - yCombLinks 4y ago
    Because every time you want to build a new product you risk that no one ends up wanting the product, or not enough people to justify keeping it going. Alternately once you have depleted all of your current ideas you don't have anything productive for those people to do.
    - marcosdumay 4y ago
      > Alternately once you have depleted all of your current ideas you don't have anything productive for those people to do. Ok, that can possibly happen. But if it constantly happens, you have problems.

rodgerd 4y ago

I've been privy to execs sharing the "why" for stacked ranking, open plan, layoffs, and various other decisions. If you had some naive belief in the efficacy of capitalism or the idea that CEOs are highly paid because of their brilliance you'd be very disappointed to discover how often the answer is "we're doing this because other companies like us are doing this", or "because an analyst told us we should do this".

cscurmudgeon 4y ago
If people were paid by brilliance most celebrities and politicians would be poor and mathematicians would be billionaires. The world doesn’t work that way.
- kmonsen 4y ago
  I think the overall spirit of your argument is true, but I think you define brilliance too narrowly with saying it primarily applies to mathematicians.

thrashh 4y ago

Well if you’re not hiring, your competitor is picking up the talent Plus the more people that you have, the faster you can get competitive products out to market Could be a damned if you do, dammed if you don’t situation

redtriumph 4y ago
> Plus the more people that you have, the faster you can get competitive products out to market This is not always true. Do you have citation to back this up?
- schlauerfox 4y ago
  Yeah, effectiveness is something too in monopoly tech firms. The Mythical Man Month https://archive.org/details/MythicalManMonth https://archive.org/details/MythicalManMonth Steve Jobs on product dev vs marketing teams https://www.youtube.com/watch?v=P4VBqTViEx4 https://www.youtube.com/watch?v=P4VBqTViEx4
- ipaddr 4y ago
  If you rephrased to say you have more opportunities to take more bets.
- thrashh 4y ago
  Well I said “can.” It’s not always true but you can’t do the work of 6 people with 2. I’ve definitely been on teams blocked by the number of people where getting even one more QA person sped things up a lot.

SkyPuncher 4y ago

IMO, cheap capital meant companies could take "dumb" risks. Now that interest rates are going up, they need more plausible returns on investment.

thedougd 4y ago

Maybe they're doomed to follow the footsteps of their predecessors, IBM, HP, Cisco, Nortel, Dell, Intel, etc.