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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 unders

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
  To be clear, in my original post I'm not making a stance on whether I think CEOs should have made the particular calls they did or not. If you want my opinion, though, it's easy with the benefit of hindsight to say they shouldn't have. But some industries were, in fact, thrown several years into the future and there wasn't a compelling reason at that time to assume they'd just fall back as things returned to normal. Others should probably have reasonably expected growth to slow down (or reverse) as people could get out in the world again. I don't think there's one broad answer to the market overall. Frankly, it's a little odd to me that we would expect companies to just be able to weather whatever the economy throws at them with no changes needed. Companies fail. They grow, they then shed headcount. Sometimes its right, sometimes its wrong. But I'm not sure how we could ever live in a society where there could be a complete upheaval to entire industries over a single quarter, and then again 2 years later back in the other direction, and everyone trucks on like nothing happened.
- s1artibartfast 4y ago
  What is the cost benefit for acting or not acting? Everybody seems to be treating this as a binary decision which it is not. When running a business, it can be entirely reasonable to invest in something you think is unlikely to actually happen if the potential reward times the low chance is greater than the cost. If you strip away all the bad armchair economics, I think what people are really upset about is the idea that gambling with people's jobs is an acceptable cost.
  - colinmorelli 4y ago
    I think this sums it up perfectly. Companies are wrong all the time. They kill product lines, often times even shed customer revenue, to avoid having to further invest in a space that doesn't make sense. The real question is "should we tolerate shedding jobs" and it's an interesting question. Without stating a personal opinion on the matter, it's interesting to think about how drastically this would shift the economic structure of the nation if the answer was "no"
automatic6131 4y ago
>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 Yes, they all egregiously failed. A massive, widespread, collective failure for which they should lose their jobs, as many other people do. On the face of it, it was obvious, that's not even hindsight bias - it was the topsy turvy world that bad news meant good news for stocks and S&P 500 CEOs that persisted for nigh on 15 years that was weird and had to end sooner rather than later.
- k8t 4y ago
  If it was obvious, did you initiate any shorts while it was happening?
  - eftychis 4y ago
    Just to gather small data: yes.
  - Tostino 4y ago
    The market can stay irrational far longer than you can stay solvent...
    - Aunche 4y ago
      That logic only applies if you have unlimited potential downside. If they were really certain, they could have bought put options.
      - elijaht 4y ago
        I would say the same logic still applies to puts. They all have expiries, and you will have to buy new puts once they expire. You could just let the puts expire and have capped losses, but that feels like another form of the market staying irrational to your loss
  - dijit 4y ago
    > If it was obvious, did you initiate any shorts while it was happening? Hard to prove, but as a data point: I tried to. I just couldn't figure out how, access to that kind of banking is more difficult in Sweden, especially if you don't speak Swedish. I have IRC logs of that period though, since I asked around on how to do that. Just to say: it was quite obvious in my circles.
hereItCom35 4y ago
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Cardinal7167 4y ago
That’s fine and all and I agree about CEOs reacting and needing to be ahead of the curve but when they do fail they still get the golden parachute and I still get the “we’ll write you a good letter of recommendation”.
bastardoperator 4y ago
None of this addresses the responsibility part.
- dnissley 4y ago
  Who holds the ceo responsible? The board. If the board themselves would have made the same hiring calls, it's unlikely they could fault the ceo for making those calls as well. By extension -- who doesn't hold the ceo responsible? The court of public opinion, which is what all of these comments and articles spilling barrels of ink on this issue think should be the case, but is not actually the case (and for obviously good reasons). A company is not a democracy (again, for obviously good reasons).
  - bastardoperator 4y ago
    Who holds you responsible for your actions?... For me personally, I don't have a board of directors I can deflect to. I self regulate.
  - cnelsenmilt 4y ago
    But they operate in a democracy, and part of a healthy democracy is having policy debates in public, exactly like this.
    - dnissley 4y ago
      Sure, not going to argue with that. On the other hand, these debates seem quite one sided. The boards of these companies aren't firing their CEOs. Why aren't any of the op-ed authors curious enough to ask about this? This author literally links to another one of his own op-eds in order to dismiss any such arguments about whether or not this is pertinent! They've clearly already made up their minds on this point. Or is the real point not to have a debate, but to get people riled up and indignant about something that will always have bad optics (even when it's necessary)?
tyre 4y ago
This is the measured take. What happens if the COVID lockdown demand surge happens and companies don’t hire? Customers don’t get what they want. Businesses that want to move online can’t or have a worse experience. The companies themselves are under-resourced for the actual demand and can’t invest in the future of their business because they’re struggling to keep the lights on. I understand people are pissed about layoffs. Entirely reasonable, and as someone laid off I can empathize. But at the same time, COVID was kind of a black swan event. No one know what would happen and companies made their best guesses. Many were wrong! And that’s fine. For public companies, there was public information about their strategies and the bets they were taking. For private companies, it probably depends on what they’d share during hiring. I knew going into Stripe in January 2022 what their bets were, my confidence level in leadership, and my personal risk tolerance for an uncertain future. We shouldn’t be ripping companies apart when they’re wrong. At least not with over-hiring that had a plausible justification behind it. I don’t want to work for a CEO who doesn’t take risks. I don’t believe that’s better for the world.
- sharemywin 4y ago
  Why hire and not use contractors.
  - colinmorelli 4y ago
    I'm not sure how "farm this out to the 1099's" is a solution to this problem. You're shedding the expense either way, and the same group of people who are frustrated about the layoffs now are also frustrated at organizations who find loopholes to use "contractors" instead of "employees" to avoid benefits, taxes, etc. But, the bigger issue is, knowing that you should give this to contractors would have required the same foresight that would lead to you not hiring anyway. In other words, if you knew enough to know that you shouldn't hire full time people because you might lay them off, then you probably knew enough to not do this in the first place...so you wouldn't have to let anyone go.
  - tyre 4y ago
    The bets were long-term.
sharemywin 4y ago
But when you post insane profits and still laying off people? come on. good luck hiring people next time your looking for people.
- Darmody 4y ago
  It's FAANG companies who are firing, not your local webdev agency. As soon as they start looking for people and offering salaries starting at 150k, tens of thousands will jump straight in.
  - sharemywin 4y ago
    maybe. maybe not. I imagine one of the selling points of recruiters was we haven't had layoffs.
sharemywin 4y ago
I just hate the CEO's saying "I take full responsibility for what happened" I call bullshit. If you did you'd quit in shame.
- colinmorelli 4y ago
  If the bar for asking a CEO to quit is "you did not correctly predict the future" then we're going to have to ask most CEOs to quit at some point. And most employees for that matter. The issue I have is with broad strokes generalizations that layoffs indicate a failure of a CEO. They don't necessarily mean that. Any more than shipping a bug to production indicates a failure of an engineer who should now be fired. Similarly, not laying people off is not an indicator of success. Nor is not shipping a bug to production. The question is not "can we predict the future," but rather "did we do the right things to capture the right data to make the best decision" and if the answer to that question is yes - then any other reasonable person in the same position would likely have made a similar (if not the same) choice, and it's not clear what firing anyone does besides being punitive. Again, same for any employee that makes a mistake. This is not me giving a free pass to CEOs.
  - snotrockets 4y ago
    The CEO job is to choose the best prediction of the future from those available to them, and make sure the company executes on it. So yes, that's the bar.
    - colinmorelli 4y ago
      But as you just said, it's to make the _best_ prediction of the future based on those available, not necessarily the right one. You hope that over time of making enough educated bets, enough pan out correct for overall company success. Companies are often wrong about many (perhaps most) things. They're just right often enough to keep succeeding. As the markets clearly priced in during the pandemic, this was the best prediction of the future. As measured not just by the CEO, but the response of consumers and the public markets. You would be hard-pressed, without the benefit of today's hindsight, to make a reasonable argument for why this wasn't the right decision to make based on the data in front of you.
pavon 4y ago
Agreed. I'm all in favor of holding CEOs accountable for bad decisions, as we've all seen companies' value (both real and stock) destroyed due to idiotic short-sighted management decisions, only for them to insanely well compensated. But that's not what this is. They made reasonable decisions based on the information they had, and then markets changed. I think where this is really stemming from is that these market swings hurt people, and those being hurt feel the CEO should share in that. And there is merit to that argument, that austerity measures should impact CEOs and upper management just like they do the lower ranks, regardless of fault. These people are in a better financial position to weather the swings. Their compensation has a lot more margin or "fat" to cut into before it becomes painful, and thus can save a number of jobs that might otherwise have to be cut. Most importantly it shows solidarity with the workforce. It makes it feel more like this is an external event that is happening to us, not something that the CEO is inflicting on the staff.
trilobyte 4y ago
Stepping back from any emotional assessment, the growth of these businesses was not commensurate with the hiring. You can look at both the financial reporting and the economic indicators from that period and a reasonable measure of growth was warranted but not at the level these companies [edited from "comments"] hired at. It was more of an irrational tragedy of the commons, where companies were hiring because they were afraid of losing access to talent due to other company's hiring. It was not rational through the lens of business growth.
- colinmorelli 4y ago
  This is an interesting take, and on the surface I'd buy this. I think the assessment from many companies was "we're hiring because of where the world is clearly going" (ecom sustains a 20% lift overnight, healthcare sees a 37x increase in telemedicine use, etc), but perhaps a lot of this was just "we want the talent because other people want the talent." I'll definitely dig into this take further!
  - trilobyte 4y ago
    Just saw this today and it bears out this out a bit more: https://news.ycombinator.com/item?id=34740322 https://news.ycombinator.com/item?id=34740322 Those companies expected a major societal event to become the new normal without strong data to support it, and chased growth that was not going to be sustained.
kodah 4y ago
> 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 This can be simplified to market reading. People in finance get fired for getting this wrong all the time. Michael Burry was told investors lacked confidence in his ability to read markets and was on the brink of divestiture during his short. I think it's fair to say that's what we pay CEOs the big bucks to do, and if they fail to do it it's fair we ask for ramifications. I'm more startled by the comments who would like to preserve someone who makes millions, is already set for life, and often displays an inability to relate to the front line workers they're supposed to represent.
jackmott42 4y ago
It is a very odd discussion to have since, even when running a company well, no public company should be compensating its CEO to the tune of even 1 million a year. It is absolutely a ruling class leeching off society that this happens. It doesn't happen everywhere or even in america in the past, big companies can be run without this behavior. It isn't supply and demand, it is cronyism. Should a CEO be allowed to get calls wrong, sure. Should they get paid 200 million when they do? No. Should they get paid 200 million ever? No. Shareholders should be suing every company that does this until it stops, imho.
- aeternum 4y ago
  Some ICs/devs make 1 mil a year
  - deleted 4y ago
    [deleted]
- koonsolo 4y ago
  Isn't it up to the shareholders to decide this?
  - sangnoir 4y ago
    It's mostly up to the boards' compensation committees. The board members are mostly C-suite themselves in their day jobs. Go figure. The power of the majority of shareholders is diffuse, except for large funds and activists: decision makers in both groups tend to be from the same high-compensation executive in-group - so they will not rock the boat.
  - Fargren 4y ago
    You are replying to someone who is saying "I don't think it's good that things are this way" with "things are this way". I hate these kinds of comments. The other guy knows how it's not up to him to make this decision. That doesn't mean he shouldn't voice his opinion.
- edoceo 4y ago
jonny_eh 4y ago
> inflation combined with an end to the public health emergency has tempered growth expectations You don't need to be paid a +$200M salary to know that pandemics end.
- colinmorelli 4y ago
  Nobody was debating whether the pandemic would end. The only debate was whether industries would snap back to operating how they did before, or if they changes would sustain. And the reality is that there was no correct answer for all industries. Some are permanently (or at least well beyond the end of the PHE) changed by this. Others went back.
caeril 4y ago
It's truly insane to see. HN has been filled, for the last decade, with stories and advice about hopping jobs every two years to garner 20-40% pay increases, completely oblivious to the bubble that was SO OBVIOUS to some of us. Armies of self-interested careerist strivers doing everything imaginable to optimize their income, in the midst of the biggest tech bubble since 1999, giving precisely zero fucks about the impact their actions had on either their employer, or on broader society (morally disgusting adtech and social media platforms work in particular). And now these same people have the audacity to bitch that the very employers they've been strategically milking with their Machiavellian labor market plays would realize their mistake. No. Full stop. To these people I say: You've been paid $300-400k in total comp for a decade to build platforms that have DEGRADED the society we live in. You have extracted maximum rents from a job market that favored you, to provide NEGATIVE value to society, all while looking down your nose at lowly plumbers, carpenters, and those subhumans in flyover country who grow your food, mine your copper, and produce your electricity. Now the job market no longer favors you, and you, of course, regard this as the fault of everyone else. Fuck off. Fuck right off, right now.
mejutoco 4y ago
> growing companies don't hire for today, but for where they want to be tomorrow If this were true, should not companies hire now, thinking long term, like Google did in the last crisis circa 2008? It looks like most companies hire or fire not for today, but for next quarter.
- Insanity 4y ago
  My take? They hope these actions show that they can lead “strongly” through times of “adversity” and make “tough decisions”. And in doing so, hope the stock market will reward them for it. They are not doing the strategic long-term thinking here but optimize for short-term results.
dopamean 4y ago
> when COVID hit and tech companies saw large surges This sounds like what you said it wasnt, "hiring for today."
- colinmorelli 4y ago
  Yes, changes happened today which impacted expectations of the future. Of course this should be fairly clear. All of our perception about what will happen in the future is informed on events that have already happened or are happening now. There's no other information to base it on. It's not like Google/Meta/Microsoft were barely hanging on by a thread just able to get through their core workload before COVID hit. They didn't need another 10,000 employees to get through today. They needed (or, incorrectly, thought they did) them to support where the business would be going in the years ahead.
deleted 4y ago
[deleted]
bradleyjg 4y ago
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. What you’re missing here is that it’s their job to be correct. Covid was, perhaps, unpredictable but the end of Covid wasn’t. Of course, accurately predicting the future is very difficult but these are the highest paid people in the entire world. They should be able to do very difficult things to dramatically help their businesses, that’s why they make the big bucks. If they aren’t performing they should be replaced by someone better. Otherwise what we have is cronyism and not capitalism.
barbazoo 4y ago
> 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. I guess the question is whether leadership could have anticipated a retraction of the economy just a few years later. But this made me think of another question. How much job security can we reasonably expect in the first place? If we want jobs to be secure, then that needs to be legislated or people need to unionize (and take the pay cut). I'm aware that I have no say in how the business is run and I can basically be let go either anytime or within a short time and I need to prepare myself for that.
yunohn 4y ago
> saw industries leaping 5-10 years into the future overnight, they hired to support that growth This is the kicker for me. C-levels assuming that a once-in-a-lifetime pandemic leading to online growth would sustain for the next decade. They should make 10Y plans, not 1Q based ones.
- Apocryphon 4y ago
  And not just c-levels, but the shareholders influencing their decisions.

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
To be clear, in my original post I'm not making a stance on whether I think CEOs should have made the particular calls they did or not. If you want my opinion, though, it's easy with the benefit of hindsight to say they shouldn't have. But some industries were, in fact, thrown several years into the future and there wasn't a compelling reason at that time to assume they'd just fall back as things returned to normal. Others should probably have reasonably expected growth to slow down (or reverse) as people could get out in the world again. I don't think there's one broad answer to the market overall. Frankly, it's a little odd to me that we would expect companies to just be able to weather whatever the economy throws at them with no changes needed. Companies fail. They grow, they then shed headcount. Sometimes its right, sometimes its wrong. But I'm not sure how we could ever live in a society where there could be a complete upheaval to entire industries over a single quarter, and then again 2 years later back in the other direction, and everyone trucks on like nothing happened.
s1artibartfast 4y ago
What is the cost benefit for acting or not acting? Everybody seems to be treating this as a binary decision which it is not. When running a business, it can be entirely reasonable to invest in something you think is unlikely to actually happen if the potential reward times the low chance is greater than the cost. If you strip away all the bad armchair economics, I think what people are really upset about is the idea that gambling with people's jobs is an acceptable cost.
- colinmorelli 4y ago
  I think this sums it up perfectly. Companies are wrong all the time. They kill product lines, often times even shed customer revenue, to avoid having to further invest in a space that doesn't make sense. The real question is "should we tolerate shedding jobs" and it's an interesting question. Without stating a personal opinion on the matter, it's interesting to think about how drastically this would shift the economic structure of the nation if the answer was "no"

automatic6131 4y ago

>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 Yes, they all egregiously failed. A massive, widespread, collective failure for which they should lose their jobs, as many other people do. On the face of it, it was obvious, that's not even hindsight bias - it was the topsy turvy world that bad news meant good news for stocks and S&P 500 CEOs that persisted for nigh on 15 years that was weird and had to end sooner rather than later.

k8t 4y ago
If it was obvious, did you initiate any shorts while it was happening?
- eftychis 4y ago
  Just to gather small data: yes.
- Tostino 4y ago
  The market can stay irrational far longer than you can stay solvent...
  - Aunche 4y ago
    That logic only applies if you have unlimited potential downside. If they were really certain, they could have bought put options.
    - elijaht 4y ago
      I would say the same logic still applies to puts. They all have expiries, and you will have to buy new puts once they expire. You could just let the puts expire and have capped losses, but that feels like another form of the market staying irrational to your loss
- dijit 4y ago
  > If it was obvious, did you initiate any shorts while it was happening? Hard to prove, but as a data point: I tried to. I just couldn't figure out how, access to that kind of banking is more difficult in Sweden, especially if you don't speak Swedish. I have IRC logs of that period though, since I asked around on how to do that. Just to say: it was quite obvious in my circles.

hereItCom35 4y ago

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Cardinal7167 4y ago

That’s fine and all and I agree about CEOs reacting and needing to be ahead of the curve but when they do fail they still get the golden parachute and I still get the “we’ll write you a good letter of recommendation”.

bastardoperator 4y ago

None of this addresses the responsibility part.

dnissley 4y ago
Who holds the ceo responsible? The board. If the board themselves would have made the same hiring calls, it's unlikely they could fault the ceo for making those calls as well. By extension -- who doesn't hold the ceo responsible? The court of public opinion, which is what all of these comments and articles spilling barrels of ink on this issue think should be the case, but is not actually the case (and for obviously good reasons). A company is not a democracy (again, for obviously good reasons).
- bastardoperator 4y ago
  Who holds you responsible for your actions?... For me personally, I don't have a board of directors I can deflect to. I self regulate.
- cnelsenmilt 4y ago
  But they operate in a democracy, and part of a healthy democracy is having policy debates in public, exactly like this.
  - dnissley 4y ago
    Sure, not going to argue with that. On the other hand, these debates seem quite one sided. The boards of these companies aren't firing their CEOs. Why aren't any of the op-ed authors curious enough to ask about this? This author literally links to another one of his own op-eds in order to dismiss any such arguments about whether or not this is pertinent! They've clearly already made up their minds on this point. Or is the real point not to have a debate, but to get people riled up and indignant about something that will always have bad optics (even when it's necessary)?

tyre 4y ago

This is the measured take. What happens if the COVID lockdown demand surge happens and companies don’t hire? Customers don’t get what they want. Businesses that want to move online can’t or have a worse experience. The companies themselves are under-resourced for the actual demand and can’t invest in the future of their business because they’re struggling to keep the lights on. I understand people are pissed about layoffs. Entirely reasonable, and as someone laid off I can empathize. But at the same time, COVID was kind of a black swan event. No one know what would happen and companies made their best guesses. Many were wrong! And that’s fine. For public companies, there was public information about their strategies and the bets they were taking. For private companies, it probably depends on what they’d share during hiring. I knew going into Stripe in January 2022 what their bets were, my confidence level in leadership, and my personal risk tolerance for an uncertain future. We shouldn’t be ripping companies apart when they’re wrong. At least not with over-hiring that had a plausible justification behind it. I don’t want to work for a CEO who doesn’t take risks. I don’t believe that’s better for the world.

sharemywin 4y ago
Why hire and not use contractors.
- colinmorelli 4y ago
  I'm not sure how "farm this out to the 1099's" is a solution to this problem. You're shedding the expense either way, and the same group of people who are frustrated about the layoffs now are also frustrated at organizations who find loopholes to use "contractors" instead of "employees" to avoid benefits, taxes, etc. But, the bigger issue is, knowing that you should give this to contractors would have required the same foresight that would lead to you not hiring anyway. In other words, if you knew enough to know that you shouldn't hire full time people because you might lay them off, then you probably knew enough to not do this in the first place...so you wouldn't have to let anyone go.
- tyre 4y ago
  The bets were long-term.

sharemywin 4y ago

But when you post insane profits and still laying off people? come on. good luck hiring people next time your looking for people.

Darmody 4y ago
It's FAANG companies who are firing, not your local webdev agency. As soon as they start looking for people and offering salaries starting at 150k, tens of thousands will jump straight in.
- sharemywin 4y ago
  maybe. maybe not. I imagine one of the selling points of recruiters was we haven't had layoffs.

sharemywin 4y ago

I just hate the CEO's saying "I take full responsibility for what happened" I call bullshit. If you did you'd quit in shame.

colinmorelli 4y ago
If the bar for asking a CEO to quit is "you did not correctly predict the future" then we're going to have to ask most CEOs to quit at some point. And most employees for that matter. The issue I have is with broad strokes generalizations that layoffs indicate a failure of a CEO. They don't necessarily mean that. Any more than shipping a bug to production indicates a failure of an engineer who should now be fired. Similarly, not laying people off is not an indicator of success. Nor is not shipping a bug to production. The question is not "can we predict the future," but rather "did we do the right things to capture the right data to make the best decision" and if the answer to that question is yes - then any other reasonable person in the same position would likely have made a similar (if not the same) choice, and it's not clear what firing anyone does besides being punitive. Again, same for any employee that makes a mistake. This is not me giving a free pass to CEOs.
- snotrockets 4y ago
  The CEO job is to choose the best prediction of the future from those available to them, and make sure the company executes on it. So yes, that's the bar.
  - colinmorelli 4y ago
    But as you just said, it's to make the _best_ prediction of the future based on those available, not necessarily the right one. You hope that over time of making enough educated bets, enough pan out correct for overall company success. Companies are often wrong about many (perhaps most) things. They're just right often enough to keep succeeding. As the markets clearly priced in during the pandemic, this was the best prediction of the future. As measured not just by the CEO, but the response of consumers and the public markets. You would be hard-pressed, without the benefit of today's hindsight, to make a reasonable argument for why this wasn't the right decision to make based on the data in front of you.

pavon 4y ago

Agreed. I'm all in favor of holding CEOs accountable for bad decisions, as we've all seen companies' value (both real and stock) destroyed due to idiotic short-sighted management decisions, only for them to insanely well compensated. But that's not what this is. They made reasonable decisions based on the information they had, and then markets changed. I think where this is really stemming from is that these market swings hurt people, and those being hurt feel the CEO should share in that. And there is merit to that argument, that austerity measures should impact CEOs and upper management just like they do the lower ranks, regardless of fault. These people are in a better financial position to weather the swings. Their compensation has a lot more margin or "fat" to cut into before it becomes painful, and thus can save a number of jobs that might otherwise have to be cut. Most importantly it shows solidarity with the workforce. It makes it feel more like this is an external event that is happening to us, not something that the CEO is inflicting on the staff.

trilobyte 4y ago

Stepping back from any emotional assessment, the growth of these businesses was not commensurate with the hiring. You can look at both the financial reporting and the economic indicators from that period and a reasonable measure of growth was warranted but not at the level these companies [edited from "comments"] hired at. It was more of an irrational tragedy of the commons, where companies were hiring because they were afraid of losing access to talent due to other company's hiring. It was not rational through the lens of business growth.

colinmorelli 4y ago
This is an interesting take, and on the surface I'd buy this. I think the assessment from many companies was "we're hiring because of where the world is clearly going" (ecom sustains a 20% lift overnight, healthcare sees a 37x increase in telemedicine use, etc), but perhaps a lot of this was just "we want the talent because other people want the talent." I'll definitely dig into this take further!
- trilobyte 4y ago
  Just saw this today and it bears out this out a bit more: https://news.ycombinator.com/item?id=34740322 https://news.ycombinator.com/item?id=34740322 Those companies expected a major societal event to become the new normal without strong data to support it, and chased growth that was not going to be sustained.

kodah 4y ago

> 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 This can be simplified to market reading. People in finance get fired for getting this wrong all the time. Michael Burry was told investors lacked confidence in his ability to read markets and was on the brink of divestiture during his short. I think it's fair to say that's what we pay CEOs the big bucks to do, and if they fail to do it it's fair we ask for ramifications. I'm more startled by the comments who would like to preserve someone who makes millions, is already set for life, and often displays an inability to relate to the front line workers they're supposed to represent.

jackmott42 4y ago

It is a very odd discussion to have since, even when running a company well, no public company should be compensating its CEO to the tune of even 1 million a year. It is absolutely a ruling class leeching off society that this happens. It doesn't happen everywhere or even in america in the past, big companies can be run without this behavior. It isn't supply and demand, it is cronyism. Should a CEO be allowed to get calls wrong, sure. Should they get paid 200 million when they do? No. Should they get paid 200 million ever? No. Shareholders should be suing every company that does this until it stops, imho.

aeternum 4y ago
Some ICs/devs make 1 mil a year
- deleted 4y ago
  [deleted]
koonsolo 4y ago
Isn't it up to the shareholders to decide this?
- sangnoir 4y ago
  It's mostly up to the boards' compensation committees. The board members are mostly C-suite themselves in their day jobs. Go figure. The power of the majority of shareholders is diffuse, except for large funds and activists: decision makers in both groups tend to be from the same high-compensation executive in-group - so they will not rock the boat.
- Fargren 4y ago
  You are replying to someone who is saying "I don't think it's good that things are this way" with "things are this way". I hate these kinds of comments. The other guy knows how it's not up to him to make this decision. That doesn't mean he shouldn't voice his opinion.
edoceo 4y ago

jonny_eh 4y ago

> inflation combined with an end to the public health emergency has tempered growth expectations You don't need to be paid a +$200M salary to know that pandemics end.

colinmorelli 4y ago
Nobody was debating whether the pandemic would end. The only debate was whether industries would snap back to operating how they did before, or if they changes would sustain. And the reality is that there was no correct answer for all industries. Some are permanently (or at least well beyond the end of the PHE) changed by this. Others went back.

caeril 4y ago

It's truly insane to see. HN has been filled, for the last decade, with stories and advice about hopping jobs every two years to garner 20-40% pay increases, completely oblivious to the bubble that was SO OBVIOUS to some of us. Armies of self-interested careerist strivers doing everything imaginable to optimize their income, in the midst of the biggest tech bubble since 1999, giving precisely zero fucks about the impact their actions had on either their employer, or on broader society (morally disgusting adtech and social media platforms work in particular). And now these same people have the audacity to bitch that the very employers they've been strategically milking with their Machiavellian labor market plays would realize their mistake. No. Full stop. To these people I say: You've been paid $300-400k in total comp for a decade to build platforms that have DEGRADED the society we live in. You have extracted maximum rents from a job market that favored you, to provide NEGATIVE value to society, all while looking down your nose at lowly plumbers, carpenters, and those subhumans in flyover country who grow your food, mine your copper, and produce your electricity. Now the job market no longer favors you, and you, of course, regard this as the fault of everyone else. Fuck off. Fuck right off, right now.

mejutoco 4y ago

> growing companies don't hire for today, but for where they want to be tomorrow If this were true, should not companies hire now, thinking long term, like Google did in the last crisis circa 2008? It looks like most companies hire or fire not for today, but for next quarter.

Insanity 4y ago
My take? They hope these actions show that they can lead “strongly” through times of “adversity” and make “tough decisions”. And in doing so, hope the stock market will reward them for it. They are not doing the strategic long-term thinking here but optimize for short-term results.

dopamean 4y ago

> when COVID hit and tech companies saw large surges This sounds like what you said it wasnt, "hiring for today."

colinmorelli 4y ago
Yes, changes happened today which impacted expectations of the future. Of course this should be fairly clear. All of our perception about what will happen in the future is informed on events that have already happened or are happening now. There's no other information to base it on. It's not like Google/Meta/Microsoft were barely hanging on by a thread just able to get through their core workload before COVID hit. They didn't need another 10,000 employees to get through today. They needed (or, incorrectly, thought they did) them to support where the business would be going in the years ahead.

deleted 4y ago

[deleted]

bradleyjg 4y ago

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. What you’re missing here is that it’s their job to be correct. Covid was, perhaps, unpredictable but the end of Covid wasn’t. Of course, accurately predicting the future is very difficult but these are the highest paid people in the entire world. They should be able to do very difficult things to dramatically help their businesses, that’s why they make the big bucks. If they aren’t performing they should be replaced by someone better. Otherwise what we have is cronyism and not capitalism.

barbazoo 4y ago

> 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. I guess the question is whether leadership could have anticipated a retraction of the economy just a few years later. But this made me think of another question. How much job security can we reasonably expect in the first place? If we want jobs to be secure, then that needs to be legislated or people need to unionize (and take the pay cut). I'm aware that I have no say in how the business is run and I can basically be let go either anytime or within a short time and I need to prepare myself for that.

yunohn 4y ago

> saw industries leaping 5-10 years into the future overnight, they hired to support that growth This is the kicker for me. C-levels assuming that a once-in-a-lifetime pandemic leading to online growth would sustain for the next decade. They should make 10Y plans, not 1Q based ones.

Apocryphon 4y ago
And not just c-levels, but the shareholders influencing their decisions.