4 ms·

When everyone is doing it, companies see it as an opportunity to trim down the fat they have accumulated during the good times. There's no stigma for them doin

When everyone is doing it, companies see it as an opportunity to trim down the fat they have accumulated during the good times. There's no stigma for them doing it if everyone else is. If they lay people off in good times, then that is a serious indication of trouble at the company. If they lay people off in bad times then that is an indication of wisdom and prudence. I've seen it in multiple recessions.

myko 4y ago
> I've seen it in multiple recessions. What's interesting here is that, in the face of all the fears about a recession, no recession actually seems to be happening
- andrewstuart 4y ago
  yep. It's just a bunch of lemmings.
  - indus 4y ago
    Or companies that did not do performance related reduction are finding now is the time
- causality0 4y ago
  The more removed the financial and tech world is from the rest of the economy the more they cloud reality by distorting GDP figures. We may not be in a recession but everyone I know has more difficulty paying for things and a more negative economic outlook than they ever did in '09.
- pid-1 4y ago
  While some economic indicators are bad already, the real issue is core inflation not giving up. The Fed has already signaled it will keep hiking rates until the economy slows down and inflation is controlled. As an entrepreneur/CFO, would you bet against the Fed?
  - ac29 4y ago
    > While some economic indicators are bad already, the real issue is core inflation not giving up. Inflation was negative last month. Core CPI was above zero, though (0.3%). https://www.bls.gov/cpi/latest-numbers.htm https://www.bls.gov/cpi/latest-numbers.htm
  - landswipe 4y ago
    This might have a measurable effect though, basically 200K+ workers kicked out of the industry, and the fear of a second round for the remaining workers. That is a some serious belt-tightening there. If it feeds into other less progressive industries, it might well help (which I suspect is the whole impetus behind it, at least the coordination suggests so).
- refurb 4y ago
  You have to remember that these companies have access to metrics that aren’t public yet. They can monitor sales day to day. Wait until Q4 results come out. If companies like google have seen a drop in Q4 advertising revenue (unsurprising since it’s often an expense that gets cut first), they may be trimming headcount before the downturn in revenue is even made public.
DougMerritt 4y ago
To extend that, if a CEO bucks a trend like that, and then the company's profits appear to suffer as a result, then stockholders will be unhappy, and the CEO may lose their bonus, or worse. Just to point out that there are often personal implications for the powers that be, if the stockholders feel that mistakes were made.
- pickleb 4y ago
  I hear arguments like this on HN all the time. This seems similar if not the same as, "CXO has a fiduciary duty to <do something terrible>". How often do execs actually get punished for _not_ doing something terrible? I never seem to hear about cases where they are held responsible for not following fiduciary duty. I only seem to hear it brought up as a justification for shitty behavior. I'm not trying to say it doesn't happen. I'm genuinely curious.
  - brianwawok 4y ago
    How would you know what people didn’t do? Seems hard to measure.
  - DougMerritt 4y ago
    I don't know how often that happens. But anyway in my case I didn't say it was their duty, I was talking basically about the psychology. From this angle, it's about whether they think that shareholders will/might think they made a mistake, not about whether they actually made the best judgement for the company. I have no doubt that at least some CEOs will absolutely choose to do something that they privately believe is not optimal for the company, when they think shareholders will see things differently. The converse of this is seen when a politician does something out of principle that they know will get them in trouble with voters. We have plenty of evidence that that happens -- and that it's on the rare side.
  - andrewstuart 4y ago
    Layoffs aren't something terrible. They're part of business. Sure it's not ideal but it does happen. I don't get why people react emotionally to it as though the company is question is evil.
carabiner 4y ago
Study claiming as such: https://news.stanford.edu/2022/12/05/explains-recent-tech-layoffs-worried/ https://news.stanford.edu/2022/12/05/explains-recent-tech-la... Shareholders really want them as a copycat maneuver.
theRealMe 4y ago
I’m not saying this IS happening, but there’s a potential tin-foil hat angle here too. There was quite a bit of job hopping and increased wages going on before 2022. A little RIF by everyone has a chilling effect on people looking to leave. People prefer stability when times are tough. And cutting total number of available positions across the industry can have the effect of suppressing wages. Again, I have no reason to believe this is happening, but it IS a potential motive.
- ggwp99 4y ago
  It is not a conspiracy. Many companies do actually lay off a number of senior employees in downturns and rehire less experienced employees at a cheaper rate (taking into factor experience).
voidfunc 4y ago
Bingo, if there are going to be layoffs, now is the time to do it because the narrative is the economy is fucked.
- indus 4y ago
  and hopefully narrative gets lost in the sea of Glassdoor reviews
ulfw 4y ago
Then why hire when you are so desperate to 'trim down the fat'. The firings aren't performanced based. So really all you're doing is reducing so you can waste billions on hiring again in 2025.
- Chyzwar 4y ago
  Because it is very hard to fire someone underperforming. You need to hire people to get stuff done. To fire people, you either need to build 1 year of paper trail or wait for the next signs of recession. These companies are sitting on cash, they are expected to hire and use that cash to grow revenue. The last decade of free money made many companies irresponsible and bloated.
lamontcg 4y ago
> If they lay people off in good times, then that is a serious indication of trouble at the company. I used to work at Amazon from 2001-2006 and every single year there was a round of layoffs of several percent after the annual 360 degree review nonsense was completed. That was part of the whole "topgrading" nonsense to keep negging all the rest of the remaining employees. Did they actually have to stop doing that, or is this whole "nobody ever did layoffs in tech up until this year" narrative something invented in the past few months?

myko 4y ago

> I've seen it in multiple recessions. What's interesting here is that, in the face of all the fears about a recession, no recession actually seems to be happening

andrewstuart 4y ago
yep. It's just a bunch of lemmings.
- indus 4y ago
  Or companies that did not do performance related reduction are finding now is the time
causality0 4y ago
The more removed the financial and tech world is from the rest of the economy the more they cloud reality by distorting GDP figures. We may not be in a recession but everyone I know has more difficulty paying for things and a more negative economic outlook than they ever did in '09.
pid-1 4y ago
While some economic indicators are bad already, the real issue is core inflation not giving up. The Fed has already signaled it will keep hiking rates until the economy slows down and inflation is controlled. As an entrepreneur/CFO, would you bet against the Fed?
- ac29 4y ago
  > While some economic indicators are bad already, the real issue is core inflation not giving up. Inflation was negative last month. Core CPI was above zero, though (0.3%). https://www.bls.gov/cpi/latest-numbers.htm https://www.bls.gov/cpi/latest-numbers.htm
- landswipe 4y ago
  This might have a measurable effect though, basically 200K+ workers kicked out of the industry, and the fear of a second round for the remaining workers. That is a some serious belt-tightening there. If it feeds into other less progressive industries, it might well help (which I suspect is the whole impetus behind it, at least the coordination suggests so).
refurb 4y ago
You have to remember that these companies have access to metrics that aren’t public yet. They can monitor sales day to day. Wait until Q4 results come out. If companies like google have seen a drop in Q4 advertising revenue (unsurprising since it’s often an expense that gets cut first), they may be trimming headcount before the downturn in revenue is even made public.

DougMerritt 4y ago

To extend that, if a CEO bucks a trend like that, and then the company's profits appear to suffer as a result, then stockholders will be unhappy, and the CEO may lose their bonus, or worse. Just to point out that there are often personal implications for the powers that be, if the stockholders feel that mistakes were made.

pickleb 4y ago
I hear arguments like this on HN all the time. This seems similar if not the same as, "CXO has a fiduciary duty to <do something terrible>". How often do execs actually get punished for _not_ doing something terrible? I never seem to hear about cases where they are held responsible for not following fiduciary duty. I only seem to hear it brought up as a justification for shitty behavior. I'm not trying to say it doesn't happen. I'm genuinely curious.
- brianwawok 4y ago
  How would you know what people didn’t do? Seems hard to measure.
- DougMerritt 4y ago
  I don't know how often that happens. But anyway in my case I didn't say it was their duty, I was talking basically about the psychology. From this angle, it's about whether they think that shareholders will/might think they made a mistake, not about whether they actually made the best judgement for the company. I have no doubt that at least some CEOs will absolutely choose to do something that they privately believe is not optimal for the company, when they think shareholders will see things differently. The converse of this is seen when a politician does something out of principle that they know will get them in trouble with voters. We have plenty of evidence that that happens -- and that it's on the rare side.
- andrewstuart 4y ago
  Layoffs aren't something terrible. They're part of business. Sure it's not ideal but it does happen. I don't get why people react emotionally to it as though the company is question is evil.

carabiner 4y ago

Study claiming as such: https://news.stanford.edu/2022/12/05/explains-recent-tech-layoffs-worried/ https://news.stanford.edu/2022/12/05/explains-recent-tech-la... Shareholders really want them as a copycat maneuver.

theRealMe 4y ago

I’m not saying this IS happening, but there’s a potential tin-foil hat angle here too. There was quite a bit of job hopping and increased wages going on before 2022. A little RIF by everyone has a chilling effect on people looking to leave. People prefer stability when times are tough. And cutting total number of available positions across the industry can have the effect of suppressing wages. Again, I have no reason to believe this is happening, but it IS a potential motive.

ggwp99 4y ago
It is not a conspiracy. Many companies do actually lay off a number of senior employees in downturns and rehire less experienced employees at a cheaper rate (taking into factor experience).

voidfunc 4y ago

Bingo, if there are going to be layoffs, now is the time to do it because the narrative is the economy is fucked.

indus 4y ago
and hopefully narrative gets lost in the sea of Glassdoor reviews

ulfw 4y ago

Then why hire when you are so desperate to 'trim down the fat'. The firings aren't performanced based. So really all you're doing is reducing so you can waste billions on hiring again in 2025.

Chyzwar 4y ago
Because it is very hard to fire someone underperforming. You need to hire people to get stuff done. To fire people, you either need to build 1 year of paper trail or wait for the next signs of recession. These companies are sitting on cash, they are expected to hire and use that cash to grow revenue. The last decade of free money made many companies irresponsible and bloated.

lamontcg 4y ago

> If they lay people off in good times, then that is a serious indication of trouble at the company. I used to work at Amazon from 2001-2006 and every single year there was a round of layoffs of several percent after the annual 360 degree review nonsense was completed. That was part of the whole "topgrading" nonsense to keep negging all the rest of the remaining employees. Did they actually have to stop doing that, or is this whole "nobody ever did layoffs in tech up until this year" narrative something invented in the past few months?