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I don't know about Confluent, but I can tell you that sales (and therefore revenue) have seen significant drops in most industries. This is wholly expected in a
by PragmaticPulp 4y ago
I don't know about Confluent, but I can tell you that sales (and therefore revenue) have seen significant drops in most industries. This is wholly expected in a rising rate environment.
When sales drop, revenue also falls. When revenue falls, models get re-evaluated and numbers get re-calculated. Reducing expenses becomes a priority.
When reducing expenses becomes a priority, SaaS contracts get evaluated very closely. Unnecessary seats are removed. Contracts are re-negotiated. Income for SaaS companies like Confluent drop rapidly, and they may continue to drop more. So I don't think this is blind trend-following, I think this is a rational response to a rapidly changing market.
A company can be profitable and it can still make sense to lay off certain employees. In-house recruiter positions are some of the first to be cut right now because companies are pulling back on hiring. If you have a hiring freeze and very low hiring forecasts for the next year, why would you continue to employee a lot of recruiters?
Market conditions change. Companies adapt to the change. When you have people in positions that are seeing less demand for the coming year, it doesn't make sense to keep them on the payroll and have them sit idle. It's rational to readjust the workforce.
Nobody likes getting laid off, but no position is truly permanent.
- philipwhiuk 4y agoOn a macro-economic level though this is a negative doom loop.
- ramesh31 4y ago>When reducing expenses becomes a priority, SaaS contracts get evaluated very closely. Unnecessary seats are removed. Contracts are re-negotiated. Income for SaaS companies like Confluent drop rapidly, and they may continue to drop more. This has been a long time coming. Some of the numbers I have been seeing for these contracts are truly mindblowing for the value delivered. The days of gouging enterprise on these random non-critical SaaS integrations is probably over. The one that still really gets me is Slack. Even medium sized companies are paying millions per year for a glorified IRC client. It just doesn't add up.
- claytonjy 4y agoSlack is an interesting one. Suppose you're a company spending a lot on it, too much. What are your options? Replacing slack with a comparable like Teams or Gchat is at least a step back in user-friendliness that will be grumbled about by engineers and others, and if you use a lot of integrations there might be significant switching costs. Moving away from instant messaging as a communication pattern sounds great to me, but good luck convincing folks to change company culture that significantly.
- WookieRushing 4y agoIt’s millions a year and ms teams is near free. In a cost cutting environment this is near perfect.
- claytonjy 4y agoHow big of a team costs that much? Looks like the highest listed price is $180/person/year before it becomes "call us" pricing. Im sure that enterprise plan can get expensive, but even at $500/person/year that's at least 2000 users. I'd hope there's lots of things higher on the list of effective cost savings before trying to migrate that many users, and integrations, and history. Such migrations are happening and will continue to happen, but I expect most will go about as well as the one discussed in a sibling comment.
- progman32 4y agoThis is exactly what's happening at a previous employer. We used slack for near a decade with tons of integrations. It's now being unceremoniously ripped out because Teams is "free". Will probably cost them more than they're saving from the contract just because of the migration cost.
- varjag 4y agoNah noone's going to make a fuss out of it when people get axed left and right.
- alephnerd 4y ago
- trynewideas 4y agoDoes recruiting ever comprise more than 3% of a company's staff?