23 ms·

Tech CEOs Should Be Held Accountable, or Even Fired, Amid Layoffs

385 points by i13e 4y ago

hcks 4y ago
If this was really an issue for workers we would see emigration to places where firing at a whim isn’t possible (like Western Europe). Last time I checked about 10 times more people emigrate from Europe to US than the opposite.
throwaway2847 4y ago
My company did a big round of layoffs and it was pretty revealing that not a single director or above were laid off. Despite reduced headcount, the org chart got DEEPER in some cases. For all the talk of bloat in the tech world, nobody wants to point fingers at directors who have little to do but schedule very expensive meetings with the directors under them.
- Mountain_Skies 4y ago
  Reminds me of a company I worked for where we up staffed to sixty people plus five managers in my department. Then a recession hit and after two rounds of layoffs, there were fifteen workers left and still five managers. Not only did those of us left have an increased workload, but now had to deal with endless bike shedding by the managers, all of whom wanted to be able to put their name on whatever we were working on, probably because they were scared of what would happen if there was a round three of layoffs. Round three never came and eventually hiring freezes were lifted, but it was really annoying dealing with all the useless petty changes that were pushed on our work during that time so the management layer could look like they were doing something.
- dangwhy 4y ago
  Meta seems to be flattenning the org and mark has publicly clamied that he doesn't doesn't managers of managers and will lay them off next round.
  - peoplearepeople 4y ago
    How many levels of management is the target? It somewhat caps organization size unless you want someone to have a comical number of direct reports
- xadhominemx 4y ago
  Seems like something specific to your company. A lot of large companies have flattened their org structures in this round of layoffs.
- prettychill 4y ago
  Agree. I guess it's self preservation - managers decide who is laid off and are more likely to believe it's the ICs who are unproductive, not the many tiers of middle management who do nothing quantifiable. Quite hilariously engineers are going to be measured by "productive commits" soon, but I saw no guidance created to measure how managers are providing value
- pembrook 4y ago
  The managerial class looting public companies for outsized compensation while taking near-zero risk, is a huge problem in the modern economy. Being a steward of an already-giant company...one that has product-market fit, reliable sales/distribution channels, household brand awareness, and a position of gravity in the markets...is infinitely easier than building something from scratch. Nobody who was employee #1567 should ever be granted $10M+ of equity in a business they didn't build. It's quite literally stealing from public investors, and boards only enable this because they're incestuously composed of fellow managerial-club members.
  - gwright 4y ago
    > The managerial class looting public companies for outsized compensation while taking near-zero risk, is a huge problem in the modern economy. Has it ever not been a problem? In any type of economy? In any type of company? Seems like this a human nature problem and not a "modern economy" problem.
    - overrun11 4y ago
      I think it is a fairly new thing yes. I could be wrong but the distinction between owner and manager seems like a fairly recent development. The people in charge have always reaped the bulk of the profits but also bore most of the risk. Now we have "managers" who take no more risk than an employee but receive excess rewards.
  - robocat 4y ago
    > The managerial class looting public companies for outsized compensation while taking near-zero risk, is a huge problem in the modern economy. From the public’s point-of-view, the “software class” are looting the public: outsized compensation for a risk of say 2% (20% fired over ten years). Nobody who was employee #13370 should ever be granted $100k+ of equity in a business they didn't build. I’m being sarcastic: but so many arguments against the “managerial class” can equally be made against the wealthy privileged software engineers earning $X00k (including stock options/RSUs etcetera).
- stronglikedan 4y ago
  > directors who have little to do That's not the director's problem, so why would anyone point the finger at them? Competent directors have a lot to do, albeit mostly behind the scenes to the average employee. If they don't have a lot to do, then the problem is up the chain.
SketchySeaBeast 4y ago
This is based upon the assumption that layoffs are a failure rather than a feature which, while I find it distasteful using people's livelihoods in such a way, doesn't actually seem to be the reckoning for a lot of people. When times are good why wouldn't you hire to maximize profits and then cut people loose when times are getting bad? If you can ignore the human factor it makes sense.
- sokoloff 4y ago
  It's not even clear to me that tech employees (as a whole) would be better off if such an overall system were in place for the last decade. Instead of (highly-visible) layoffs now, you'd have seen substantially less hiring across the last decade (invisibly) and probably much lower market-clearing compensation levels as a result. You can't have the benefits of go-go-gang-busters hiring sprees without sometimes having layoffs, IMO.
  - charles_f 4y ago
    Two things 1) you mostly need your money now, to pay rent or mortgage, food, activities. In that cyclic markets like this are bad for devs. In choosing between a higher salary that comes with a non negligible chance that you won't have a salary at all for a sustained period, or lesser compensation but higher stability, I choose the latter. 2) The crazy increase of salaries was the result of the raise of demand, and got matched by a raise of offer. Offer is by nature much less elastic than demand: it takes years to make a good dev, but we turned from the hottest market ever to layoffs in under 6 months. The problem is that the offer creation machine (education) is not elastic as well. You can't recycle your CS degree into a construction degree very easily. This means that while the market is slow over the next few years, we will see waves of devs freshly minted out of college, in proportions that correspond to a hot market. Assuming that the demand was generated by actual value creation, and that it restarts in a frw years, it will be a long time until we get back to job safety and prosperity
    - sokoloff 4y ago
      Cyclic markets are bad for some devs who have tech jobs. Cyclic markets are probably better than staid markets for those many people who would have never landed a tech job in an environment where over-hiring was a career-ending threat to CEOs.
oifjsidjf 4y ago
[flagged]
- jakelazaroff 4y ago
  This is an opinion piece.
  - anononaut 4y ago
    That's all we really ever get these days.
    - lokar 4y ago
      Choose your sources better. There is still plenty of good general news reporting.
    - freejazz 4y ago
      Stop reading the opinion section, then??
      - ghiculescu 4y ago
        That's the least biased bit.
        freejazz 4y ago
        [flagged]
  - mc32 4y ago
    So is the take you’re referring to. It’s fair, and I endorse it!
- djfobbz 4y ago
  Mostly all publications these days are supported/funded by outside “open societies or foundations” that want to further their own agenda. Unless it’s independent journalism, don’t expect these entities to objectively report anything.
dathinab 4y ago
Yes but also no. They should be held responsible for the results of their actions. But current firings might not be the result of their actions. So putting boni (which often are a major part of their sallery) in a trust to be payed out years later and which act similar to a security deposit would be a rough idea for a direction this can take. But I think the main problem are not CEOs but how the current form of the stock/investment marked is _extremely_ hotly to long term sustainable company management. Stock holders are not seldom the main drive for bad CEO decisions due to a combination of which CEO and how they pressure the CEO (or what they tolerate). It not rare to see major stock holders push knowingly for long term devastating decisions because they short term yield high dividends and stock spikes and when things come crashing down they don't hold the stock anymore (quasi/oversimplified, to avoid consequences they might use all kinds of tricks to make it look different).
infamouscow 4y ago
> Any executive who participates in decision-making that leads to hundreds or thousands of people losing their jobs should be the one leading them out the door But executives that hire hundreds or thousands, regardless of if those jobs were ever needed in the first place deserve praise? Anyone making such an argument is stupid and deserves to be ridiculed, shamed, and insulted for defending it.
mc32 4y ago
The US is not a command economy and given the open nature of hiring and firing (few encumbrances) results in firms being able to hire quickly and fire quickly. It allows for a more dynamic economy. Obviously this adds some uncertainty to affected parties (firms and labor). Individual contributors lose their source of income and firms may be less financially stable (may now have financial constraints) on the other hand many people who would have otherwise been unemployed and not benefitted from being a hire, got hired, gained experience and earned income. Firms got to try some things out they might not have otherwise. It looks to me the reporter of this piece is trying to ride an emotional wave for their own benefit and narrative. That said, why aren't journalists and journalism firing contributors and editors when they get stories completely wrong for years and are found to be in cahoots with the establishment to carry water for them?
- roncesvalles 4y ago
  >The US is not a command economy and given the open nature of hiring and firing (few encumbrances) results in firms being able to hire quickly and fire quickly. Really? My epiphanic assessment from working in corporate America is that the single biggest challenge for American capitalism is that it's very difficult to fire people. That is, there is much more organizational friction in making a decision to fire, than to make a decision to hire. Even in at-will states, big companies require months or even years of "paper trail" to fire a non-performant or harmful employee. Notably, Amazon's aggressive PIP system seems to be specifically designed from the ground up to counter this problem, and even they seem to be dialing down the aggressiveness because of bad PR.
  - mc32 4y ago
    It's all relative. Relative to other developed economies employment laws are more flexible in the US. In China, interestingly, for private businesses it's relatively easy to fire employees. You get massive protests when an employer refuses owed backpay for people in mass layoffs.
andsoitis 4y ago
it only really matters whether the CEO is the right person to lead the company into the future. if shareholders think the CEO / board is the right leader for the company, it wouldn’t make sense to fire them. if, on the other hand, they didn’t believe the CEO is the right person to lead the company, it would make sense to fire them. good example is Bob Chapek of Disney who got replaced recently by dormer CEO Iger.
charles_f 4y ago
I remember reading in a book called "everything is obvious" that this is a standard thing to attribute (or at least self attribute) success to personal competencie and failures to bad context. In this case I think that they are in fact being held somewhat accountable by their remuneration based mainly on stocks, which values are currently plummeting. With the consideration that we are talking about comp going from $200M to $50M... Your comp might have been divided by 4, but you still earn orders of magnitude more than all of the people you laid off, so I don't think there is much accountability in that. Re: overhiring, it's been discussed on every layoff thread. The arguments go: they overhired and should be accountable and fix the process OR they overhired consciously but didn't care because capitalism OR they didn't overhire because there wasn't a way they could have known that the situation would turn out as it did OR they may or may not have overhired but that's irrelevant, they're now laying off to lower the salaries
mabbo 4y ago
The goal of the CEO of a publicly traded company is to make the shareholders money. As much money as possible. If laying people off is the best way to do that, they'll do it. Blaming the CEO for doing the job they were hired to do seems short-sighted. Blame the broken system that incentivizes this, that makes doing it profitable. And then, let's change the system.
- gsatic 4y ago
  That's what Mario Savio said. Bodies upon the gears people.
- toomuchtodo 4y ago
  > The goal of the CEO of a publicly traded company is to make the shareholders money. As much money as possible. This is a poor take. The function of the CEO of a publicly traded company is to execute on major objectives of the firm. This might be optimizing for max profit, but it might not, depending on what your majority shareholders communicate to the board and management (as well as how they vote their shares). Agree with the rest of your comment that you have to reach a better power equilibrium between labor, management, and shareholders (who should also be employees to some degree, aligning interests and all that jazz).
  - coding123 4y ago
    This is actually much more correct. We also happen to be in an environment that will want most boards to slow and more carefully steer the ship. Layoffs often come with that.
  - Invictus0 4y ago
    [flagged]
    - anonymousab 4y ago
      And profit maximizing in the mid or long term can sometimes require moves that reduce profit in the short term, such as R&D expenditure. Sometimes shareholders will seek a CEO that can solve a pending existential problem rather than maximize short-term profit.
legutierr 4y ago
When there is strong demand for a product, a company should hire more people so that it can keep up with demand. Likewise, a company should hire when it has short-term capital investment plans that require additional staffing. I don't think anyone would argue with that. When demand decreases, or when a capital-intensive buildout is complete, would it be incorrect for the firm to decrease its staffing levels? If leaders expect to be fired if employees are ever laid off, then they will avoid hiring in the first place—with the consequence that fewer opportunities will be pursued and fewer risks taken. Is that what we want? Unemployment today in the US is less than 3.5%! It's good for workers—and good for the economy generally—that managers are willing to hire people they may need to fire later on if things don't work out. Otherwise, those jobs wouldn't even exist in the first place.
- manuelabeledo 4y ago
  Everything you say makes sense in theory, i.e. if we were in the early industrial world of Adam Smith. How do you define "demand" in the context of SaaS? How many engineers do you need to run Google Search? Or Facebook? Or Spotify? Did the demand increase in the past five years? Have it decreased in the last year or so? Here's the thing. None of these companies (Google, Meta, Spotify) have reported losses, not even a significant decrease in revenue over five years. They took the past year results, they saw a decrease in revenue, and they proceeded to lay off people. Google itself had a Q4 '22 revenue in line with the past years, except for the anomaly in Q4 '21 [0]. > If leaders expect to be fired if employees are ever laid off, then they will avoid hiring in the first place. You are saying that the people appointed as the better at foreseeing market trends, and taking higher risks for higher benefits, will do neither of those? Then why do we need them in the first place? They would be useless. > Unemployment today in the US is less than 3.5%! It's good for workers—and good for the economy generally—that managers are willing to hire people they may need to fire later on if things don't work out. Otherwise, those jobs wouldn't even exist in the first place. You are conflating several things here - unemployment, workers' rights, and economy of scale. They are not necessarily connected, e.g. lower unemployment and higher wages don't push managers to take risks on massive hirings. [0] https://www.statista.com/statistics/267606/quarterly-revenue-of-google/ https://www.statista.com/statistics/267606/quarterly-revenue...
glitchc 4y ago
The only solution is to form a guild for software engineers. Control access to the guild through credentials and other means. Provide mentorship and apprenticeship opportunities through the guild. Allow the guild to negotiate rates and working conditions with the industry. If actors can do it, why can't we? If you want to level the playing field with tech CEOs, that's the way to do it.
- duped 4y ago
  Why call it something weird? You're talking about a union.
  - qup 4y ago
    screen actors guild Writer's guild of America
    - duped 4y ago
      Both of which are unions
      - ghaff 4y ago
        In addition, both guarantee some minimum pay scale while working (which is mostly not a concern for software developers or engineers more broadly in the US) but do not in any way guarantee work.
  - ok_coo 4y ago
    Because a "guild" sounds more appealing to nerds? I wish I was joking but a union sounds like blue-collar work while a guild sounds like something cool from D&D and medieval fantasy.
- Gunax 4y ago
  You can make one. But i think you'll find most of us are not interested, though.
- zackmorris 4y ago
XargonEnder 4y ago
Hate to say it but it seems rational to hire like crazy to hedge against a rocket hot economy increasing demand. Also seems rational to cut back when things cool. I certainly don't like it, but I do get it.
- e_i_pi_2 4y ago
  This makes sense, but I think we also need some of the protections other countries have, like if you're doing a mass layoff you need to cover wages for a month or two after, you need to prove you're not going to be rehiring for those same positions soon, etc
  - s1artibartfast 4y ago
    Those exact wage protection exist, at least in California.
Nifty3929 4y ago
One strength of an economy is the speed with which workers can shift between different jobs/tasks/roles in response to market changes. Suppose we discover a new gold mine in a rural area. Would it be wrong for a mining company to spin up in that area and start hiring like crazy? When the mine runs out, would it be a mistake for them lay everybody off? I don't think so in either case. True even if "gold" turns out to be fools-gold in the end. A lot of CEO's would have been punished for not hiring quickly enough during the boom. Similarly during the housing bubble a lot of lenders would be (or were) punished for not loosening lending standards enough. And then blamed later for having too-loose lending standards.
nblgbg 4y ago
All the CEOs are just saying they are taking the full responsibility without any consequences, not even reducing their pay which is hypocratic. At the least, they have to really tell how they are taking the responsibility not just words!
- welshwelsh 4y ago
  For a CEO "taking responsibility" means laying people off to protect shareholder profits and taking heat from the media to protect other stakeholders from criticism. That's what they are paid so much money to do- someone making a normal salary isn't likely to take the initiative to cut thousands of jobs for the sake of the company. A CEO doesn't have any obligation to the workers; they are beholden to the company.
paulpauper 4y ago
They get fired and just collect huge pay packages and move on to something else.
olliecornelia 4y ago
[flagged]
CaliforniaKarl 4y ago
Right now, this posting links to… https://www.businessinsider.com/tech-ceo-accountable-layoffs-google-apple-intel-2023-2 https://www.businessinsider.com/tech-ceo-accountable-layoffs... … which is kindof a 'weekly roundup' article. It refers to the actual article, which is at… https://www.businessinsider.com/fire-blame-ceo-tech-employee-layoffs-google-facebook-salesforce-amazon-2023-2 https://www.businessinsider.com/fire-blame-ceo-tech-employee...
bdcravens 4y ago
Seems to me the accountability should start when the company over-hires. Far too many roles in big tech are boondoggles.
smm11 4y ago
Real estate tracking site I use deleted all my followed properties when I shared with another email address. Phone update disabled my cellular data. Train carrying chemicals crashes, planes nearly crashing into one-another at airports. Enjoy, folks.
unity1001 4y ago
The ceo-employee compensation disparity hovers around 10 to 15 times in most OECD countries, and corporations in those countries are just as productive.
dasil003 4y ago
This article is just pandering to workers who have been or fear being laid off. If you fire every tech CEO who overhired during the pandemic boom there wouldn't be many left. You also have to consider how their performance would have been viewed if they didn't capitalize on the good times. Boards make CEO firing decisions based on who they think is the best candidate to lead the company going forward. Given the incentives of the American economy, most of these CEOs acted rationally with the information they had. We find it distasteful because they make so much money while workers bear the brunt of the pain, but the uncomfortable truth is that CEOs have no more crystal ball than anyone else with regard to macroeconomic conditions, and they are not graded primarily on their ability to maintain stable employment without layoffs.
tekkk 4y ago
I think this is somewhat American thing where CEOs are paid hundreds of times more than regular employee. Certainly, you'd expect the board to fire the CEO who can't perform. It's just if both the board and the CEO are cozied up together, why should they. And granted, there's a global downturn which gives a good excuse to explain the losses. To be frank though, firing the CEO probably wouldn't fix anything. You'd have to fire also other execs, maybe board members as well and you don't want to burn bridges with your golf buddies. It seems there's just poor accountability in general for management in US, not going to steer this off to politics but there seems to be an upper class which, once you reach, will take care of you if you're properly networked. Which is kinda how it goes in other places as well. US just has mastered capitalism in a whole another level.
colinmorelli 4y ago
Regardless of individual opinions on whether CEOs should be terminated for layoffs or not - there's a surprising amount of comments here that seem to not understand that growing companies don't hire for today, but for where they want to be tomorrow. Where you want to be tomorrow is based on where you and your investors believe the world is going. If the world materially changes enough to shift your expectations about where it's going, then you change your plans (and headcount) accordingly. In other words, when COVID hit and tech companies saw large surges because investors and CEOs saw industries leaping 5-10 years into the future overnight, they hired to support that growth. As the market has shifted and inflation combined with an end to the public health emergency has tempered growth expectations, investors and CEOs cut head count to match. It sucks, and I'm not saying this is how it should be to those people who are impacted. But if you wait until the world is already where you thought it might be before you react and start building for that world, you're behind. Whether or not CEOs should be punished for getting the call wrong is what this post is about, but getting the call wrong sometimes is expected/necessary if you want to have a chance of getting it right.
- epylar 4y ago
  Was it rational given the information we had at the time to think we would sustain that kind of rapid growth, the public health emergency wouldn't end, we wouldn't get inflation from the supply chain issues and the money printing?
  - mypastself 4y ago
    The fear of another company outspending you out of business in the interim could also be a factor, so… maybe?
    - cudgy 4y ago
      Outspending alone is not sufficient though. I prefer a “pull” model for hiring: hire gradually as more people are needed.
  - colinmorelli 4y ago
textech 4y ago
I'm always surprised to see how many CEOs walk away with millions while running their companies to the ground. The vast majority of the S&P 500 corps are mostly monopolies (Telecommunication, Airlines, Insurance...etc.) and for the most part run themselves yet the CEOs are paid exorbitantly. How much did the CEOs of Circuit City, Blockbuster and so many others made while being completely oblivious to what was happening around them? Even low-level employees probably saw the shift to online/Amazon yet CEOs still walked away with millions. The Corp structure/model seems to be completely broken and most of them can only survive as monopolies.
seiferteric 4y ago
Perhaps some work is just bursty and companies need to be able to scale up and down to handle these cases, not unlike servers. Of course we are dealing with people not servers, so at the very minimum they need to provide generous severance packages. Even better, if this can be predicted, these employees should be brought in as temporary or contract employees so that there is no misunderstanding.
daniel-cussen 4y ago
[dead]
raincom 4y ago
Since boards of directors and CEOs belong to the same class, there is no accountability; they collude with each other or 'help' each other.
ltbarcly3 4y ago
Hiring at peak market is incredibly stupid. If can't reliable predict the future market, hire in down markets and get better people for less money. Some will leave in up markets, but tech work is cumulative. The good foundations that skilled people build will serve you well when you can't afford them later. Or you can desperately lower your standards and pay huge TC to the borderline incompetent people you can attract during hot markets, and insult your existing highly skilled employees by paying morons who were just hired more than the people who got you here, and them fire people basically randomly. This what every tech company seems to do.
aml702 4y ago
[dead]
insane_dreamer 4y ago
I like the approach that Intel took, which was to cut back pay, in tiered fashion (i.e., greater cut for higher officers) for high paid employees (above $X, remember what X was exactly at this point) rather than fire a bunch of people at the bottom. (I think they did fire some staff in California, but not at their main base which is in Oregon. Edit: 5% to 15% pay cut, with 15% cut for C-level and 25% cut for CEO
rr888 4y ago
Every company that pays above average needs a good clean out every now and again. People dont want to work hard forever and will start to coast. You need some way to incentivize and/or remove them.
lamontcg 4y ago
Millennials suddenly wake up one morning and realize that they've been living in a system of capitalism this whole time (once they're the ones actually affected by layoffs).
- eschulz 4y ago
  In a profit and loss system, it is often the loss part that gives the best lessons into how the market works. Being fired is at least a very good learning opportunity, although certainly not an easy one.
simple10 4y ago
Am I oversimplifying, or are the layoffs more of a predictable function of correcting for zero interest money without fear of employment lawsuits? Money was free (zero interest) during covid. Most tech companies increased staff to keep pace with each other. A lot of these hires were in support staff and junior positions needed to support low acquisition costs of new customers. Now that interest rates went up and growth stalled, companies are trimming both unprofitable customers and excess staff. Essentially, the CEOs get a free pass to fire people without risk of employment contract lawsuits. From founder friends of private companies, the initial wave of layoffs during early days of covid was a godsend of sorts. It allowed them to fire problematic employees without needing to go through protracted performance reviews. Then they hired new people using cheap loans 6 months later. Now they're correcting again with layoffs, keeping top performers, and shifting staff over to high leverage projects like AI. The short of it... did CEOs really make any significant mistakes? Or did they just take advantage of the market conditions in predictable ways? i.e. They did their jobs as it's currently incentivized. I'm not saying it's ethical to mass hire and fire. And I certainly empathize with the people who've been laid off. But perhaps it's a more accurate depiction to say the current layoffs are part of a larger strategy to reduce staff and increase bottom line in preparation for AI acquisitions. It's not a correction but a significant reshaping of tech labor force as a whole.
- thinknubpad 4y ago
  I see the lack of accountability in this spree of layoffs as being similar to the lack of accountability in the recent automotive chip shortage. Tell me if this sounds familiar: When the pandemic hit, car manufacturers saw travel plummet and decided that car sales would also plummet for the foreseeable future. The executives in charge of the auto manufacturers responded by cancelling huge swaths of orders with their suppliers, believing that the new market conditions would be persistent. 18 months later, with vaccines arriving, demand for cars spikes. Auto manufacturers panic, and rush to place new orders with their foundries, who found new customers and now have 24-month lead times. The MBAs shrug and say that there is no way anybody could have predicted this: after all, their competitors are in the same boat. They jack up prices and reap the rewards of their poor decision making, but the company and consumers would both be in a much better position if the executives had done their job properly instead of hammering the panic button. Maybe this lack of accountability at the top is a deeper, more systemic issue.
raymondgh 4y ago
Is it the view of the tech CEOs bosses (shareholders) that anything has been done wrong? It seems that they are responsible for their successes and failures both, and layoffs are only seen as failures because CEOs are pitching them as such to sell their layoffs to employees.
cudgy 4y ago
“CEO pay has skyrocketed over the years, but accountability of these top execs hasn't kept pace” When has that ever been the case — for any industry?
WalterBright 4y ago
The free market is a chaotic system. Resources are constantly being reallocated to the most profitable use. This includes the work force. This is also called creative destruction. This is the source of the prosperity from the free market, because market conditions constantly change, and business must adapt. Trying to force things into a steady state will result in inefficiency, stagnation, and will be much worse for everyone.
twawaaay 4y ago
Accountable to whom? For everything within the law, CEOs are only accountable to company owners. That's it. CEOs are only managing the company for somebody else -- the owners of the company. That's it. That's all they do. When the owners don't like the CEO they just get a new one, until they find a person that will do their bidding (or at least increase their share value). Trying to change the mind of a CEO makes no sense unless you find a way to convince owners this is in their best interest. The problem is not CEOs. The problem is shareholders / owners. The problem is people who don't care about other people. And the legislation that allows to exploit employees, chew them out when they are no longer needed while at the same time paying no taxes, not chipping in to improve general wellbeing of the population they earn so much money from.
- kerkeslager 4y ago
  > The problem is people who don't care about other people. Agreed, but the idea that CEOs are somehow not part of this group is a bit bizarre, particularly when you consider that a large part of CEO compensation is often stock or stock options. You can't exonerate CEOs by blaming shareholders when CEOs are generally shareholders.
  - twawaaay 4y ago
    I am not exonerating CEO as a person. But think in terms of the goal you want to achieve. If your goal is to stop layoffs and convince the CEO to act in a different way that shareholders will not like, the CEO will be replaced. And you will not achieve the goal. Again, the CEO is accountable to law and shareholders. Either you convince shareholders to change their mind or you change the law. That's it. Changing the mind o CEO makes no difference.
    - kerkeslager 4y ago
      > I am not exonerating CEO as a person. Well, if you're not trying to exonerate CEOs, saying "The problem is not CEOs. The problem is shareholders / owners" is a pretty strange thing to say. The CEO, as a person, made the decision; the CEO, as a person, is responsible for that decision. The CEO is the problem. > Either you convince shareholders to change their mind or you change the law. That's it. Changing the mind o CEO makes no difference. I'm not saying we should change the mind of CEOs, I'm saying we should change the law. And changing the law to penalize CEOs who do harmful things is met with a lot of opposition, because of people saying stuff like, "The problem is not CEOs. The problem is shareholders / owners." What's your proposed solution? It seems that you understand how incentives work, so I hope I don't have to explain why changing the minds of shareholders won't work.
game_the0ry 4y ago
I am happy to see the main stream narrative shifting. I have been ranting about this for a long time: https://news.ycombinator.com/item?id=33896309 https://news.ycombinator.com/item?id=33896309 https://news.ycombinator.com/item?id=29781972 https://news.ycombinator.com/item?id=29781972 Long story short - leaders are leaders bc they have the most accountability ('skin-in-the-game'). When they are the source of good in their group, they get all the perks (resources, money, mates, status, the best meat from the kill, etc); when they are the source of instability, they either relinquish leadership, or they are killed by their own (Revolutions of France and Russia). This is why there was Occupy Wall Street and the modern Tea Party after the great recession - people were fundamentally discontent when wall street execs got bail outs AND record bonuses the next year. This is why you feel angry whenever you read those half-hearted, lawyer-and-hr-drafted canned statements about how the CEO is sooooooo sorry about lying off 10k of their own employees. This is why there is lack of trust in the mainstream media - they can get things wrong (Iraq / Afghan / Vietnam wars) and there is no accountability. So let us bring back accountability. Apes. Together. Strong.
nmca 4y ago
I'm surprised that nobody links to the best proposed solution to this problem, so I will: https://mason.gmu.edu/~rhanson/dumpceo.html https://mason.gmu.edu/~rhanson/dumpceo.html The US could, if it was inclined, legalise prediction markets & investors could subsidise markets for stock price conditional on the CEO stepping down, thus revealing in the strongest possible wisdom-of-the-market sense whether the CEO is going a good job. This would solve the problem modulo short term inneficiencies and be much better than the status quo.
- j0hnyl 4y ago
  there would need heavy moderation in order to avoid nefarious things like contract killings
  - deleted 4y ago
    [deleted]
  - nmca 4y ago
    Pasting section 4.2 of this prediction market faq: https://astralcodexten.substack.com/p/prediction-market-faq https://astralcodexten.substack.com/p/prediction-market-faq "What about the risk of insider trading by committing harmful / illegal acts? That is, could President Biden’s doctor decide to poison him, then make money when he has to resign due to ill health? I think the strongest evidence against is that this basically never happens in stock markets. Tesla stock would plummet if Elon Musk died or resigned, but nobody realistically worries that Musk’s doctor will short Tesla and poison him. Lots of corporations’ stocks would sink to zero if you burned down their offices and factories, but nobody shorts them and then commits arson. Probably this is because there are laws against doing harmful and illegal things, and people have decided that stock market gains aren’t worth breaking the law and getting punished. Since prediction markets have only a tiny fraction of the amount of money that stock markets do, probably people won’t consider it worthwhile to commit harmful actions to manipulate them either. If you were going to murder someone to profit off a market, who would you rather kill: a US politician (the PredictIt market on the presidential election has a volume of about $600,000)? Or a Fortune 500 CEO (whose companies might have market caps in the hundreds of billions)?" Of course see also the rest of that FAQ, it's all great.
LatteLazy 4y ago
Holding people accountable implies a moral decision. These matters are purely pragmatic however: a CEO can be terrible but as long as the short term, risk adjusted cost of replacing him is more than the same number for keeping him, he stays. This is why no CEO every lets themselves become replaceable. Or if they do they rapidly stop being a CEO...
hector_vasquez 4y ago
You should lose your driver license if you ever have to touch the brakes.
lngarner 4y ago
The research Adam Grant presented on the subject is also interesting --there are other more stable, more profitable ways to save money other than layoffs.
41amxn41 4y ago
No. Government officials and politicians should be held accountable. Instead, sadly, I can predict they will become more and more comfortable and untouchable which is exactly what they want. The reason? Social control has become really cheap in the last decade.
bithead 4y ago
A number of people here are somehow defending CEO behavior, and should not be. Notable in this is that Apple CEO took a pay cut and didn't layoff, and Intel's CEO too a pay cut. I don't think termination of a CEO should be a kneejerk to layoffs in the tens of thousands, and neither is a failure to predict the future. However, if the CEO keeps getting raises when the profits don't see a likewise boost, there is a disconnect. Google is still seeing rising profits, just not skyrocketing. And while everyone is skittish about interest rates and potential recession, that's not a given - unless you layoff enough people.
pessimizer 4y ago
Why should relatively wealthy tech workers have more rights than everyone else? Get rid of at-will employment for people who sweat for a living before considering punishment for CEOs who consider 3 months severance for unneeded employees something considerably less than an atrocity. A huge percentage of Americans don't even have paid sick days.
Animats 4y ago
What's so striking about this is that the rest of the US workforce is seeing one of the lowest unemployment rates in history.
29athrowaway 4y ago
Should have they hired less people? Is that better than a layoff?
joeyguerra 4y ago
sgtm
mcphage 4y ago
Maybe not fire them, but putting them on a PIP might be a good idea.
burna_aws_acct 4y ago
[dead]

385 points by i13e 4y ago

hcks 4y ago

If this was really an issue for workers we would see emigration to places where firing at a whim isn’t possible (like Western Europe). Last time I checked about 10 times more people emigrate from Europe to US than the opposite.

throwaway2847 4y ago

My company did a big round of layoffs and it was pretty revealing that not a single director or above were laid off. Despite reduced headcount, the org chart got DEEPER in some cases. For all the talk of bloat in the tech world, nobody wants to point fingers at directors who have little to do but schedule very expensive meetings with the directors under them.

Mountain_Skies 4y ago
Reminds me of a company I worked for where we up staffed to sixty people plus five managers in my department. Then a recession hit and after two rounds of layoffs, there were fifteen workers left and still five managers. Not only did those of us left have an increased workload, but now had to deal with endless bike shedding by the managers, all of whom wanted to be able to put their name on whatever we were working on, probably because they were scared of what would happen if there was a round three of layoffs. Round three never came and eventually hiring freezes were lifted, but it was really annoying dealing with all the useless petty changes that were pushed on our work during that time so the management layer could look like they were doing something.
dangwhy 4y ago
Meta seems to be flattenning the org and mark has publicly clamied that he doesn't doesn't managers of managers and will lay them off next round.
- peoplearepeople 4y ago
  How many levels of management is the target? It somewhat caps organization size unless you want someone to have a comical number of direct reports
xadhominemx 4y ago
Seems like something specific to your company. A lot of large companies have flattened their org structures in this round of layoffs.
prettychill 4y ago
Agree. I guess it's self preservation - managers decide who is laid off and are more likely to believe it's the ICs who are unproductive, not the many tiers of middle management who do nothing quantifiable. Quite hilariously engineers are going to be measured by "productive commits" soon, but I saw no guidance created to measure how managers are providing value
pembrook 4y ago
The managerial class looting public companies for outsized compensation while taking near-zero risk, is a huge problem in the modern economy. Being a steward of an already-giant company...one that has product-market fit, reliable sales/distribution channels, household brand awareness, and a position of gravity in the markets...is infinitely easier than building something from scratch. Nobody who was employee #1567 should ever be granted $10M+ of equity in a business they didn't build. It's quite literally stealing from public investors, and boards only enable this because they're incestuously composed of fellow managerial-club members.
- gwright 4y ago
  > The managerial class looting public companies for outsized compensation while taking near-zero risk, is a huge problem in the modern economy. Has it ever not been a problem? In any type of economy? In any type of company? Seems like this a human nature problem and not a "modern economy" problem.
  - overrun11 4y ago
    I think it is a fairly new thing yes. I could be wrong but the distinction between owner and manager seems like a fairly recent development. The people in charge have always reaped the bulk of the profits but also bore most of the risk. Now we have "managers" who take no more risk than an employee but receive excess rewards.
- robocat 4y ago
  > The managerial class looting public companies for outsized compensation while taking near-zero risk, is a huge problem in the modern economy. From the public’s point-of-view, the “software class” are looting the public: outsized compensation for a risk of say 2% (20% fired over ten years). Nobody who was employee #13370 should ever be granted $100k+ of equity in a business they didn't build. I’m being sarcastic: but so many arguments against the “managerial class” can equally be made against the wealthy privileged software engineers earning $X00k (including stock options/RSUs etcetera).
stronglikedan 4y ago
> directors who have little to do That's not the director's problem, so why would anyone point the finger at them? Competent directors have a lot to do, albeit mostly behind the scenes to the average employee. If they don't have a lot to do, then the problem is up the chain.

SketchySeaBeast 4y ago

This is based upon the assumption that layoffs are a failure rather than a feature which, while I find it distasteful using people's livelihoods in such a way, doesn't actually seem to be the reckoning for a lot of people. When times are good why wouldn't you hire to maximize profits and then cut people loose when times are getting bad? If you can ignore the human factor it makes sense.

sokoloff 4y ago
It's not even clear to me that tech employees (as a whole) would be better off if such an overall system were in place for the last decade. Instead of (highly-visible) layoffs now, you'd have seen substantially less hiring across the last decade (invisibly) and probably much lower market-clearing compensation levels as a result. You can't have the benefits of go-go-gang-busters hiring sprees without sometimes having layoffs, IMO.
- charles_f 4y ago
  Two things 1) you mostly need your money now, to pay rent or mortgage, food, activities. In that cyclic markets like this are bad for devs. In choosing between a higher salary that comes with a non negligible chance that you won't have a salary at all for a sustained period, or lesser compensation but higher stability, I choose the latter. 2) The crazy increase of salaries was the result of the raise of demand, and got matched by a raise of offer. Offer is by nature much less elastic than demand: it takes years to make a good dev, but we turned from the hottest market ever to layoffs in under 6 months. The problem is that the offer creation machine (education) is not elastic as well. You can't recycle your CS degree into a construction degree very easily. This means that while the market is slow over the next few years, we will see waves of devs freshly minted out of college, in proportions that correspond to a hot market. Assuming that the demand was generated by actual value creation, and that it restarts in a frw years, it will be a long time until we get back to job safety and prosperity
  - sokoloff 4y ago
    Cyclic markets are bad for some devs who have tech jobs. Cyclic markets are probably better than staid markets for those many people who would have never landed a tech job in an environment where over-hiring was a career-ending threat to CEOs.

oifjsidjf 4y ago

[flagged]

jakelazaroff 4y ago
This is an opinion piece.
- anononaut 4y ago
  That's all we really ever get these days.
  - lokar 4y ago
    Choose your sources better. There is still plenty of good general news reporting.
  - freejazz 4y ago
    Stop reading the opinion section, then??
    - ghiculescu 4y ago
      That's the least biased bit.
      - freejazz 4y ago
        [flagged]
- mc32 4y ago
  So is the take you’re referring to. It’s fair, and I endorse it!
djfobbz 4y ago
Mostly all publications these days are supported/funded by outside “open societies or foundations” that want to further their own agenda. Unless it’s independent journalism, don’t expect these entities to objectively report anything.

dathinab 4y ago

Yes but also no. They should be held responsible for the results of their actions. But current firings might not be the result of their actions. So putting boni (which often are a major part of their sallery) in a trust to be payed out years later and which act similar to a security deposit would be a rough idea for a direction this can take. But I think the main problem are not CEOs but how the current form of the stock/investment marked is _extremely_ hotly to long term sustainable company management. Stock holders are not seldom the main drive for bad CEO decisions due to a combination of which CEO and how they pressure the CEO (or what they tolerate). It not rare to see major stock holders push knowingly for long term devastating decisions because they short term yield high dividends and stock spikes and when things come crashing down they don't hold the stock anymore (quasi/oversimplified, to avoid consequences they might use all kinds of tricks to make it look different).

infamouscow 4y ago

> Any executive who participates in decision-making that leads to hundreds or thousands of people losing their jobs should be the one leading them out the door But executives that hire hundreds or thousands, regardless of if those jobs were ever needed in the first place deserve praise? Anyone making such an argument is stupid and deserves to be ridiculed, shamed, and insulted for defending it.

mc32 4y ago

The US is not a command economy and given the open nature of hiring and firing (few encumbrances) results in firms being able to hire quickly and fire quickly. It allows for a more dynamic economy. Obviously this adds some uncertainty to affected parties (firms and labor). Individual contributors lose their source of income and firms may be less financially stable (may now have financial constraints) on the other hand many people who would have otherwise been unemployed and not benefitted from being a hire, got hired, gained experience and earned income. Firms got to try some things out they might not have otherwise. It looks to me the reporter of this piece is trying to ride an emotional wave for their own benefit and narrative. That said, why aren't journalists and journalism firing contributors and editors when they get stories completely wrong for years and are found to be in cahoots with the establishment to carry water for them?

roncesvalles 4y ago
>The US is not a command economy and given the open nature of hiring and firing (few encumbrances) results in firms being able to hire quickly and fire quickly. Really? My epiphanic assessment from working in corporate America is that the single biggest challenge for American capitalism is that it's very difficult to fire people. That is, there is much more organizational friction in making a decision to fire, than to make a decision to hire. Even in at-will states, big companies require months or even years of "paper trail" to fire a non-performant or harmful employee. Notably, Amazon's aggressive PIP system seems to be specifically designed from the ground up to counter this problem, and even they seem to be dialing down the aggressiveness because of bad PR.
- mc32 4y ago
  It's all relative. Relative to other developed economies employment laws are more flexible in the US. In China, interestingly, for private businesses it's relatively easy to fire employees. You get massive protests when an employer refuses owed backpay for people in mass layoffs.

andsoitis 4y ago

it only really matters whether the CEO is the right person to lead the company into the future. if shareholders think the CEO / board is the right leader for the company, it wouldn’t make sense to fire them. if, on the other hand, they didn’t believe the CEO is the right person to lead the company, it would make sense to fire them. good example is Bob Chapek of Disney who got replaced recently by dormer CEO Iger.

charles_f 4y ago

I remember reading in a book called "everything is obvious" that this is a standard thing to attribute (or at least self attribute) success to personal competencie and failures to bad context. In this case I think that they are in fact being held somewhat accountable by their remuneration based mainly on stocks, which values are currently plummeting. With the consideration that we are talking about comp going from $200M to $50M... Your comp might have been divided by 4, but you still earn orders of magnitude more than all of the people you laid off, so I don't think there is much accountability in that. Re: overhiring, it's been discussed on every layoff thread. The arguments go: they overhired and should be accountable and fix the process OR they overhired consciously but didn't care because capitalism OR they didn't overhire because there wasn't a way they could have known that the situation would turn out as it did OR they may or may not have overhired but that's irrelevant, they're now laying off to lower the salaries

mabbo 4y ago

The goal of the CEO of a publicly traded company is to make the shareholders money. As much money as possible. If laying people off is the best way to do that, they'll do it. Blaming the CEO for doing the job they were hired to do seems short-sighted. Blame the broken system that incentivizes this, that makes doing it profitable. And then, let's change the system.

gsatic 4y ago
That's what Mario Savio said. Bodies upon the gears people.
toomuchtodo 4y ago
> The goal of the CEO of a publicly traded company is to make the shareholders money. As much money as possible. This is a poor take. The function of the CEO of a publicly traded company is to execute on major objectives of the firm. This might be optimizing for max profit, but it might not, depending on what your majority shareholders communicate to the board and management (as well as how they vote their shares). Agree with the rest of your comment that you have to reach a better power equilibrium between labor, management, and shareholders (who should also be employees to some degree, aligning interests and all that jazz).
- coding123 4y ago
  This is actually much more correct. We also happen to be in an environment that will want most boards to slow and more carefully steer the ship. Layoffs often come with that.
- Invictus0 4y ago
  [flagged]
  - anonymousab 4y ago
    And profit maximizing in the mid or long term can sometimes require moves that reduce profit in the short term, such as R&D expenditure. Sometimes shareholders will seek a CEO that can solve a pending existential problem rather than maximize short-term profit.

legutierr 4y ago

When there is strong demand for a product, a company should hire more people so that it can keep up with demand. Likewise, a company should hire when it has short-term capital investment plans that require additional staffing. I don't think anyone would argue with that. When demand decreases, or when a capital-intensive buildout is complete, would it be incorrect for the firm to decrease its staffing levels? If leaders expect to be fired if employees are ever laid off, then they will avoid hiring in the first place—with the consequence that fewer opportunities will be pursued and fewer risks taken. Is that what we want? Unemployment today in the US is less than 3.5%! It's good for workers—and good for the economy generally—that managers are willing to hire people they may need to fire later on if things don't work out. Otherwise, those jobs wouldn't even exist in the first place.

manuelabeledo 4y ago
Everything you say makes sense in theory, i.e. if we were in the early industrial world of Adam Smith. How do you define "demand" in the context of SaaS? How many engineers do you need to run Google Search? Or Facebook? Or Spotify? Did the demand increase in the past five years? Have it decreased in the last year or so? Here's the thing. None of these companies (Google, Meta, Spotify) have reported losses, not even a significant decrease in revenue over five years. They took the past year results, they saw a decrease in revenue, and they proceeded to lay off people. Google itself had a Q4 '22 revenue in line with the past years, except for the anomaly in Q4 '21 [0]. > If leaders expect to be fired if employees are ever laid off, then they will avoid hiring in the first place. You are saying that the people appointed as the better at foreseeing market trends, and taking higher risks for higher benefits, will do neither of those? Then why do we need them in the first place? They would be useless. > Unemployment today in the US is less than 3.5%! It's good for workers—and good for the economy generally—that managers are willing to hire people they may need to fire later on if things don't work out. Otherwise, those jobs wouldn't even exist in the first place. You are conflating several things here - unemployment, workers' rights, and economy of scale. They are not necessarily connected, e.g. lower unemployment and higher wages don't push managers to take risks on massive hirings. [0] https://www.statista.com/statistics/267606/quarterly-revenue-of-google/ https://www.statista.com/statistics/267606/quarterly-revenue...

glitchc 4y ago

The only solution is to form a guild for software engineers. Control access to the guild through credentials and other means. Provide mentorship and apprenticeship opportunities through the guild. Allow the guild to negotiate rates and working conditions with the industry. If actors can do it, why can't we? If you want to level the playing field with tech CEOs, that's the way to do it.

duped 4y ago
Why call it something weird? You're talking about a union.
- qup 4y ago
  screen actors guild Writer's guild of America
  - duped 4y ago
    Both of which are unions
    - ghaff 4y ago
      In addition, both guarantee some minimum pay scale while working (which is mostly not a concern for software developers or engineers more broadly in the US) but do not in any way guarantee work.
- ok_coo 4y ago
  Because a "guild" sounds more appealing to nerds? I wish I was joking but a union sounds like blue-collar work while a guild sounds like something cool from D&D and medieval fantasy.
Gunax 4y ago
You can make one. But i think you'll find most of us are not interested, though.
zackmorris 4y ago

XargonEnder 4y ago

Hate to say it but it seems rational to hire like crazy to hedge against a rocket hot economy increasing demand. Also seems rational to cut back when things cool. I certainly don't like it, but I do get it.

e_i_pi_2 4y ago
This makes sense, but I think we also need some of the protections other countries have, like if you're doing a mass layoff you need to cover wages for a month or two after, you need to prove you're not going to be rehiring for those same positions soon, etc
- s1artibartfast 4y ago
  Those exact wage protection exist, at least in California.

Nifty3929 4y ago

One strength of an economy is the speed with which workers can shift between different jobs/tasks/roles in response to market changes. Suppose we discover a new gold mine in a rural area. Would it be wrong for a mining company to spin up in that area and start hiring like crazy? When the mine runs out, would it be a mistake for them lay everybody off? I don't think so in either case. True even if "gold" turns out to be fools-gold in the end. A lot of CEO's would have been punished for not hiring quickly enough during the boom. Similarly during the housing bubble a lot of lenders would be (or were) punished for not loosening lending standards enough. And then blamed later for having too-loose lending standards.

nblgbg 4y ago

All the CEOs are just saying they are taking the full responsibility without any consequences, not even reducing their pay which is hypocratic. At the least, they have to really tell how they are taking the responsibility not just words!

welshwelsh 4y ago
For a CEO "taking responsibility" means laying people off to protect shareholder profits and taking heat from the media to protect other stakeholders from criticism. That's what they are paid so much money to do- someone making a normal salary isn't likely to take the initiative to cut thousands of jobs for the sake of the company. A CEO doesn't have any obligation to the workers; they are beholden to the company.

paulpauper 4y ago

They get fired and just collect huge pay packages and move on to something else.

olliecornelia 4y ago

[flagged]

CaliforniaKarl 4y ago

Right now, this posting links to… https://www.businessinsider.com/tech-ceo-accountable-layoffs-google-apple-intel-2023-2 https://www.businessinsider.com/tech-ceo-accountable-layoffs... … which is kindof a 'weekly roundup' article. It refers to the actual article, which is at… https://www.businessinsider.com/fire-blame-ceo-tech-employee-layoffs-google-facebook-salesforce-amazon-2023-2 https://www.businessinsider.com/fire-blame-ceo-tech-employee...

bdcravens 4y ago

Seems to me the accountability should start when the company over-hires. Far too many roles in big tech are boondoggles.

smm11 4y ago

Real estate tracking site I use deleted all my followed properties when I shared with another email address. Phone update disabled my cellular data. Train carrying chemicals crashes, planes nearly crashing into one-another at airports. Enjoy, folks.

unity1001 4y ago

The ceo-employee compensation disparity hovers around 10 to 15 times in most OECD countries, and corporations in those countries are just as productive.

dasil003 4y ago

This article is just pandering to workers who have been or fear being laid off. If you fire every tech CEO who overhired during the pandemic boom there wouldn't be many left. You also have to consider how their performance would have been viewed if they didn't capitalize on the good times. Boards make CEO firing decisions based on who they think is the best candidate to lead the company going forward. Given the incentives of the American economy, most of these CEOs acted rationally with the information they had. We find it distasteful because they make so much money while workers bear the brunt of the pain, but the uncomfortable truth is that CEOs have no more crystal ball than anyone else with regard to macroeconomic conditions, and they are not graded primarily on their ability to maintain stable employment without layoffs.

tekkk 4y ago

I think this is somewhat American thing where CEOs are paid hundreds of times more than regular employee. Certainly, you'd expect the board to fire the CEO who can't perform. It's just if both the board and the CEO are cozied up together, why should they. And granted, there's a global downturn which gives a good excuse to explain the losses. To be frank though, firing the CEO probably wouldn't fix anything. You'd have to fire also other execs, maybe board members as well and you don't want to burn bridges with your golf buddies. It seems there's just poor accountability in general for management in US, not going to steer this off to politics but there seems to be an upper class which, once you reach, will take care of you if you're properly networked. Which is kinda how it goes in other places as well. US just has mastered capitalism in a whole another level.

colinmorelli 4y ago

Regardless of individual opinions on whether CEOs should be terminated for layoffs or not - there's a surprising amount of comments here that seem to not understand that growing companies don't hire for today, but for where they want to be tomorrow. Where you want to be tomorrow is based on where you and your investors believe the world is going. If the world materially changes enough to shift your expectations about where it's going, then you change your plans (and headcount) accordingly. In other words, when COVID hit and tech companies saw large surges because investors and CEOs saw industries leaping 5-10 years into the future overnight, they hired to support that growth. As the market has shifted and inflation combined with an end to the public health emergency has tempered growth expectations, investors and CEOs cut head count to match. It sucks, and I'm not saying this is how it should be to those people who are impacted. But if you wait until the world is already where you thought it might be before you react and start building for that world, you're behind. Whether or not CEOs should be punished for getting the call wrong is what this post is about, but getting the call wrong sometimes is expected/necessary if you want to have a chance of getting it right.

epylar 4y ago
Was it rational given the information we had at the time to think we would sustain that kind of rapid growth, the public health emergency wouldn't end, we wouldn't get inflation from the supply chain issues and the money printing?
- mypastself 4y ago
  The fear of another company outspending you out of business in the interim could also be a factor, so… maybe?
  - cudgy 4y ago
    Outspending alone is not sufficient though. I prefer a “pull” model for hiring: hire gradually as more people are needed.
- colinmorelli 4y ago

textech 4y ago

I'm always surprised to see how many CEOs walk away with millions while running their companies to the ground. The vast majority of the S&P 500 corps are mostly monopolies (Telecommunication, Airlines, Insurance...etc.) and for the most part run themselves yet the CEOs are paid exorbitantly. How much did the CEOs of Circuit City, Blockbuster and so many others made while being completely oblivious to what was happening around them? Even low-level employees probably saw the shift to online/Amazon yet CEOs still walked away with millions. The Corp structure/model seems to be completely broken and most of them can only survive as monopolies.

seiferteric 4y ago

Perhaps some work is just bursty and companies need to be able to scale up and down to handle these cases, not unlike servers. Of course we are dealing with people not servers, so at the very minimum they need to provide generous severance packages. Even better, if this can be predicted, these employees should be brought in as temporary or contract employees so that there is no misunderstanding.

daniel-cussen 4y ago

[dead]

raincom 4y ago

Since boards of directors and CEOs belong to the same class, there is no accountability; they collude with each other or 'help' each other.

ltbarcly3 4y ago

Hiring at peak market is incredibly stupid. If can't reliable predict the future market, hire in down markets and get better people for less money. Some will leave in up markets, but tech work is cumulative. The good foundations that skilled people build will serve you well when you can't afford them later. Or you can desperately lower your standards and pay huge TC to the borderline incompetent people you can attract during hot markets, and insult your existing highly skilled employees by paying morons who were just hired more than the people who got you here, and them fire people basically randomly. This what every tech company seems to do.

aml702 4y ago

[dead]

insane_dreamer 4y ago

I like the approach that Intel took, which was to cut back pay, in tiered fashion (i.e., greater cut for higher officers) for high paid employees (above $X, remember what X was exactly at this point) rather than fire a bunch of people at the bottom. (I think they did fire some staff in California, but not at their main base which is in Oregon. Edit: 5% to 15% pay cut, with 15% cut for C-level and 25% cut for CEO

rr888 4y ago

Every company that pays above average needs a good clean out every now and again. People dont want to work hard forever and will start to coast. You need some way to incentivize and/or remove them.

lamontcg 4y ago

Millennials suddenly wake up one morning and realize that they've been living in a system of capitalism this whole time (once they're the ones actually affected by layoffs).

eschulz 4y ago
In a profit and loss system, it is often the loss part that gives the best lessons into how the market works. Being fired is at least a very good learning opportunity, although certainly not an easy one.

simple10 4y ago

Am I oversimplifying, or are the layoffs more of a predictable function of correcting for zero interest money without fear of employment lawsuits? Money was free (zero interest) during covid. Most tech companies increased staff to keep pace with each other. A lot of these hires were in support staff and junior positions needed to support low acquisition costs of new customers. Now that interest rates went up and growth stalled, companies are trimming both unprofitable customers and excess staff. Essentially, the CEOs get a free pass to fire people without risk of employment contract lawsuits. From founder friends of private companies, the initial wave of layoffs during early days of covid was a godsend of sorts. It allowed them to fire problematic employees without needing to go through protracted performance reviews. Then they hired new people using cheap loans 6 months later. Now they're correcting again with layoffs, keeping top performers, and shifting staff over to high leverage projects like AI. The short of it... did CEOs really make any significant mistakes? Or did they just take advantage of the market conditions in predictable ways? i.e. They did their jobs as it's currently incentivized. I'm not saying it's ethical to mass hire and fire. And I certainly empathize with the people who've been laid off. But perhaps it's a more accurate depiction to say the current layoffs are part of a larger strategy to reduce staff and increase bottom line in preparation for AI acquisitions. It's not a correction but a significant reshaping of tech labor force as a whole.

thinknubpad 4y ago
I see the lack of accountability in this spree of layoffs as being similar to the lack of accountability in the recent automotive chip shortage. Tell me if this sounds familiar: When the pandemic hit, car manufacturers saw travel plummet and decided that car sales would also plummet for the foreseeable future. The executives in charge of the auto manufacturers responded by cancelling huge swaths of orders with their suppliers, believing that the new market conditions would be persistent. 18 months later, with vaccines arriving, demand for cars spikes. Auto manufacturers panic, and rush to place new orders with their foundries, who found new customers and now have 24-month lead times. The MBAs shrug and say that there is no way anybody could have predicted this: after all, their competitors are in the same boat. They jack up prices and reap the rewards of their poor decision making, but the company and consumers would both be in a much better position if the executives had done their job properly instead of hammering the panic button. Maybe this lack of accountability at the top is a deeper, more systemic issue.

raymondgh 4y ago

Is it the view of the tech CEOs bosses (shareholders) that anything has been done wrong? It seems that they are responsible for their successes and failures both, and layoffs are only seen as failures because CEOs are pitching them as such to sell their layoffs to employees.

cudgy 4y ago

“CEO pay has skyrocketed over the years, but accountability of these top execs hasn't kept pace” When has that ever been the case — for any industry?

WalterBright 4y ago

The free market is a chaotic system. Resources are constantly being reallocated to the most profitable use. This includes the work force. This is also called creative destruction. This is the source of the prosperity from the free market, because market conditions constantly change, and business must adapt. Trying to force things into a steady state will result in inefficiency, stagnation, and will be much worse for everyone.

twawaaay 4y ago

Accountable to whom? For everything within the law, CEOs are only accountable to company owners. That's it. CEOs are only managing the company for somebody else -- the owners of the company. That's it. That's all they do. When the owners don't like the CEO they just get a new one, until they find a person that will do their bidding (or at least increase their share value). Trying to change the mind of a CEO makes no sense unless you find a way to convince owners this is in their best interest. The problem is not CEOs. The problem is shareholders / owners. The problem is people who don't care about other people. And the legislation that allows to exploit employees, chew them out when they are no longer needed while at the same time paying no taxes, not chipping in to improve general wellbeing of the population they earn so much money from.

kerkeslager 4y ago
> The problem is people who don't care about other people. Agreed, but the idea that CEOs are somehow not part of this group is a bit bizarre, particularly when you consider that a large part of CEO compensation is often stock or stock options. You can't exonerate CEOs by blaming shareholders when CEOs are generally shareholders.
- twawaaay 4y ago
  I am not exonerating CEO as a person. But think in terms of the goal you want to achieve. If your goal is to stop layoffs and convince the CEO to act in a different way that shareholders will not like, the CEO will be replaced. And you will not achieve the goal. Again, the CEO is accountable to law and shareholders. Either you convince shareholders to change their mind or you change the law. That's it. Changing the mind o CEO makes no difference.
  - kerkeslager 4y ago
    > I am not exonerating CEO as a person. Well, if you're not trying to exonerate CEOs, saying "The problem is not CEOs. The problem is shareholders / owners" is a pretty strange thing to say. The CEO, as a person, made the decision; the CEO, as a person, is responsible for that decision. The CEO is the problem. > Either you convince shareholders to change their mind or you change the law. That's it. Changing the mind o CEO makes no difference. I'm not saying we should change the mind of CEOs, I'm saying we should change the law. And changing the law to penalize CEOs who do harmful things is met with a lot of opposition, because of people saying stuff like, "The problem is not CEOs. The problem is shareholders / owners." What's your proposed solution? It seems that you understand how incentives work, so I hope I don't have to explain why changing the minds of shareholders won't work.

game_the0ry 4y ago

I am happy to see the main stream narrative shifting. I have been ranting about this for a long time: https://news.ycombinator.com/item?id=33896309 https://news.ycombinator.com/item?id=33896309 https://news.ycombinator.com/item?id=29781972 https://news.ycombinator.com/item?id=29781972 Long story short - leaders are leaders bc they have the most accountability ('skin-in-the-game'). When they are the source of good in their group, they get all the perks (resources, money, mates, status, the best meat from the kill, etc); when they are the source of instability, they either relinquish leadership, or they are killed by their own (Revolutions of France and Russia). This is why there was Occupy Wall Street and the modern Tea Party after the great recession - people were fundamentally discontent when wall street execs got bail outs AND record bonuses the next year. This is why you feel angry whenever you read those half-hearted, lawyer-and-hr-drafted canned statements about how the CEO is sooooooo sorry about lying off 10k of their own employees. This is why there is lack of trust in the mainstream media - they can get things wrong (Iraq / Afghan / Vietnam wars) and there is no accountability. So let us bring back accountability. Apes. Together. Strong.

nmca 4y ago

I'm surprised that nobody links to the best proposed solution to this problem, so I will: https://mason.gmu.edu/~rhanson/dumpceo.html https://mason.gmu.edu/~rhanson/dumpceo.html The US could, if it was inclined, legalise prediction markets & investors could subsidise markets for stock price conditional on the CEO stepping down, thus revealing in the strongest possible wisdom-of-the-market sense whether the CEO is going a good job. This would solve the problem modulo short term inneficiencies and be much better than the status quo.

j0hnyl 4y ago
there would need heavy moderation in order to avoid nefarious things like contract killings
- deleted 4y ago
  [deleted]
- nmca 4y ago
  Pasting section 4.2 of this prediction market faq: https://astralcodexten.substack.com/p/prediction-market-faq https://astralcodexten.substack.com/p/prediction-market-faq "What about the risk of insider trading by committing harmful / illegal acts? That is, could President Biden’s doctor decide to poison him, then make money when he has to resign due to ill health? I think the strongest evidence against is that this basically never happens in stock markets. Tesla stock would plummet if Elon Musk died or resigned, but nobody realistically worries that Musk’s doctor will short Tesla and poison him. Lots of corporations’ stocks would sink to zero if you burned down their offices and factories, but nobody shorts them and then commits arson. Probably this is because there are laws against doing harmful and illegal things, and people have decided that stock market gains aren’t worth breaking the law and getting punished. Since prediction markets have only a tiny fraction of the amount of money that stock markets do, probably people won’t consider it worthwhile to commit harmful actions to manipulate them either. If you were going to murder someone to profit off a market, who would you rather kill: a US politician (the PredictIt market on the presidential election has a volume of about $600,000)? Or a Fortune 500 CEO (whose companies might have market caps in the hundreds of billions)?" Of course see also the rest of that FAQ, it's all great.

LatteLazy 4y ago

Holding people accountable implies a moral decision. These matters are purely pragmatic however: a CEO can be terrible but as long as the short term, risk adjusted cost of replacing him is more than the same number for keeping him, he stays. This is why no CEO every lets themselves become replaceable. Or if they do they rapidly stop being a CEO...

hector_vasquez 4y ago

You should lose your driver license if you ever have to touch the brakes.

lngarner 4y ago

The research Adam Grant presented on the subject is also interesting --there are other more stable, more profitable ways to save money other than layoffs.

41amxn41 4y ago

No. Government officials and politicians should be held accountable. Instead, sadly, I can predict they will become more and more comfortable and untouchable which is exactly what they want. The reason? Social control has become really cheap in the last decade.

bithead 4y ago

A number of people here are somehow defending CEO behavior, and should not be. Notable in this is that Apple CEO took a pay cut and didn't layoff, and Intel's CEO too a pay cut. I don't think termination of a CEO should be a kneejerk to layoffs in the tens of thousands, and neither is a failure to predict the future. However, if the CEO keeps getting raises when the profits don't see a likewise boost, there is a disconnect. Google is still seeing rising profits, just not skyrocketing. And while everyone is skittish about interest rates and potential recession, that's not a given - unless you layoff enough people.

pessimizer 4y ago

Why should relatively wealthy tech workers have more rights than everyone else? Get rid of at-will employment for people who sweat for a living before considering punishment for CEOs who consider 3 months severance for unneeded employees something considerably less than an atrocity. A huge percentage of Americans don't even have paid sick days.

Animats 4y ago

What's so striking about this is that the rest of the US workforce is seeing one of the lowest unemployment rates in history.

29athrowaway 4y ago

Should have they hired less people? Is that better than a layoff?

joeyguerra 4y ago

sgtm

mcphage 4y ago

Maybe not fire them, but putting them on a PIP might be a good idea.

burna_aws_acct 4y ago

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