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>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 suppor

>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.
crazygringo 4y ago
> On the face of it, it was obvious If it was obvious, then the market would have priced it in. But it didn't. So the crowdsourced collective wisdom was indeed that industries were leaping 5-10 years into the future overnight. That was the thing that was "obvious" to most people. You may have disagreed at the time, and if you'd shorted stocks you could have made some money. But the idea that "on the face of it, it was obvious" is blatantly untrue. You're able to say this only with the gift of hindsight.
- deleted 4y ago
  [deleted]
- jonathankoren 4y ago
  > If it was obvious, then the market would have priced it in. Bubbles don’t exist? I’m sorry, but to paraphrase an old quote, the market’s can remain irrational, longer than your faith in a rational market.
  - sbazerque 4y ago
    Yeah, markets can be irrational, and markets know it, and play crazy games over themselves.
  - s1artibartfast 4y ago
    I think that's a different question then if it's obvious. I don't really understand the obvious claim. If it was obvious to investors and executives then what? They knowingly spent money they knew was a waste?
    - dml2135 4y ago
      It's not that complicated -- it was obvious to some people, and not obvious to others. Clearly then, the wrong people were in charge.
      - s1artibartfast 4y ago
joegahona 4y ago
> Yes, they all egregiously failed. A massive, widespread, collective failure for which they should lose their jobs, as many other people do. I am all for thoughtful discussions on how tech CEOs could be held responsible outside of empty mea culpas in blog posts, but "they should lose their jobs" feels like cutting off the nose to spite the face. Does ousting a CEO really help the company, or the workers who didn't get laid off? And where does the line get drawn? % of layoffs or absolute number of layoffs? How does the absolute size of a company get factored in?
superfrank 4y ago
I think the fact that so many CEOs got it wrong is actually an argument for why the shouldn't be fired. If one or two CEOs got it wrong, you could argue that they were incompetent, ignorant, or greedy and they should have been better informed because plenty of other CEOs were. Everyone getting something wrong says to me that the failure wasn't down to individual mistakes and there was something larger at play.
- waboremo 4y ago
  If your CEO is a lemming, they are not capable of leading a company. They should be fired. If you want to see a real leader, look at Tim Cook. He made decisions based specifically on where the company is, where it's going, and already factored in external factors (such as the pandemic growth). Contrast this to dozens of other "CEO"s who made a horrible decision hastily, executed layoffs horribly wrong, and then vaguely blamed a pandemic. The exact same lazy gameplan because these CEOs cannot lead, might as well replace them with chatgpt, maybe they'll write better layoff emails. As a reminder, the CEOs core role is to steer the company. When that ship slams into an iceberg, you have failed your core role. What happens when workers fail their core role?
  - aliswe 4y ago
    why would a company like apple need to hire more people because of covid though?
    - NineStarPoint 4y ago
      Why would Meta have needed to either though? Or really Alphabet, Microsoft, Twitter, or a bunch of other companies? Maybe a handful more people to deal with scaling issues on products specific to pandemic needs, but the pandemic was always going to be temporary. They hired heavily in excess of just pandemic related concerns, it was more about expecting a paradigm shift. (Even now they almost all have substantially more people than before the pandemic though ,so you could argue it is less an error of type and more an error of magnitude)
  - 4y ago
jedberg 4y ago
> collective failure for which they should lose their jobs, as many other people do. Only bad companies fire people for taking risks and failing. Good companies reward that behavior if the risk was reasonable and the learnings were positive. They fire people who take unnecessary risk. Hiring into the pandemic was a good risk in my opinion.
- Apocryphon 4y ago
  Why was it a good risk? The writing on the wall that tech was overinflated, that TC was insane, that the money printing was going to have a severe correction eventually. It should have been common wisdom that it was a temporary state of affairs because the growth in tech was not built on irreversible trends. Lockdown would end eventually. All of those food delivery apps, at the very least, could not expect exponential growth once restaurants opened again.
  - jedberg 4y ago
    > The writing on the wall that tech was overinflated, that TC was insane, that the money printing was going to have a severe correction eventually. Sure, and then you lay people off when that correction comes in. In the meantime you're hiring the best people and having them do great work. And when they layoffs come, maybe some of them stay. > All of those food delivery apps, at the very least, could not expect exponential growth once restaurants opened again. Sure, but if they didn't build market share during the pandemic, they would never catch up afterwards. When the market is on fire, you need to ride the rocket. You always know that you have layoffs in your back pocket for when the market cools. It's not like these layoffs should be a surprise to anyone -- it happens after every hot market. Sure it absolutely sucks for those that are affected by it, I know because it happened to me in 2001. Barely got through it. But it's not a big surprise.
    - Apocryphon 4y ago
      It is a big surprise because tech was in its own superheated bubble for about fifteen years ago and human beings have short memories. So perhaps that's why Warren Buffett's dictum of being fearful when others are greedy is so important to remember, even in greedy times. But 1) it seems rather disingenuous for companies to posture one way and then pull the rug under their workforce who are being sacrificed in the name of a cooling market, and 2) perhaps companies should consider other ways to pursue profitability without massive layoff sprees?
lhorie 4y ago
I'm seeing a lot of this "screw up = get fired" narrative lately and I think it's a bit ironic. Talk about screwing up in engineering contexts and suddenly the tune changes: now people will talk about improving processes, blameless postmortems, and how the individual is not at fault. Imagine a youtuber saying googlers should be fired because some decision was made that affected the youtuber's income negatively. Or imagine an Uber driver saying that. Or a small business owner dealing w/ a Stripe mishap or whatever. If you are the one being targeted by these calls for loss of employment, then comes out the "I'm not the responsible person here" card. So on the one hand, you hear people with pitchforks about how CEOs or whoever need to take responsibility in some movie-esque "bad guy ending" fashion, but turn the tables and nobody wants to step up to be responsible for their own shit shows. Even if we entertain the idea of firing CEOs, is the implicit assumption that companies can run fine without one? By that logic, anyone could just give a bunch of money to a bunch of fiverr code monkeys and that business would run just fine? I don't really get what the logical conclusion of this whole line of argument is supposed to be.
- josephcsible 4y ago
  Executives should be held personally responsible for kinds of things that low-level employees aren't. That's why executives get paid so much more.
  - foobiekr 4y ago
    Do you want execs that never take risks and simply milk cash cows until they die? Do you want golden parachutes? This is how you get these.
    - Clent 4y ago
      If we don't let them be bad in the job in one way, they'll be bad in the job in another way, therefore why bother. I reject these defeatist attitudes and question the engineering skills of anyone who thinks this way. It is always better to try something. Human created systems are inherently problematic and do not fix themselves. The dream is to engineer a system that does not have faults.
alldayeveryday 4y ago
Another variable to consider: the 2020 - 2022 market was rewarding growth (as opposed to profitability or being cash-flow positive). The Corporate loan interest rate was practically 0%. Companies which could show growth, even at the expense of lighting cash on fire, were rewarded as far as the stock market is concerned. CEOs are expected to bias towards shareholder value, lest they be replaced by someone who will. And so, with these variables in play, many took the decision to rapidly expand their operations (costs) in any way that produced marginal growth. They lived and died by their ability to, on each quarterly earnings call, share the message of QoQ and YoY growth. For many companies this required rapid hiring. The market now is demanding flesh and CEOs are either expected to provide it, or else get fired. Just like in the former time period, they would get fired had they not shown growth. I personally do not think a CEO should be fired now for having to hire employees, when they would have been fired in the first place had they not rapidly hired.
option 4y ago
they are accountable to shareholders not employees. This it is up to shareholders to decide whether CEO they employ failed or not.
HWR_14 4y ago
How did they fail? The spent 1 year salary times 15,000 people times $333,333/man-year. So $5 billion. That's a pretty big cost. On the other hand, it was a hedge against losing significant opportunities/market share. The question is "was it a good bet".
- thunky 4y ago
  Exactly. Just because they ended up reducing headcount doesn't mean they failed. Success isn't measured from the employee perspective. Everyone here calling for their heads is using the wrong measuring stick.
  - HWR_14 4y ago
    It's also a success from the employee perspective. Those people got FAANG salaries for a year when they shouldn't have been hired.

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.

crazygringo 4y ago

> On the face of it, it was obvious If it was obvious, then the market would have priced it in. But it didn't. So the crowdsourced collective wisdom was indeed that industries were leaping 5-10 years into the future overnight. That was the thing that was "obvious" to most people. You may have disagreed at the time, and if you'd shorted stocks you could have made some money. But the idea that "on the face of it, it was obvious" is blatantly untrue. You're able to say this only with the gift of hindsight.

deleted 4y ago
[deleted]
jonathankoren 4y ago
> If it was obvious, then the market would have priced it in. Bubbles don’t exist? I’m sorry, but to paraphrase an old quote, the market’s can remain irrational, longer than your faith in a rational market.
- sbazerque 4y ago
  Yeah, markets can be irrational, and markets know it, and play crazy games over themselves.
- s1artibartfast 4y ago
  I think that's a different question then if it's obvious. I don't really understand the obvious claim. If it was obvious to investors and executives then what? They knowingly spent money they knew was a waste?
  - dml2135 4y ago
    It's not that complicated -- it was obvious to some people, and not obvious to others. Clearly then, the wrong people were in charge.
    - s1artibartfast 4y ago

joegahona 4y ago

> Yes, they all egregiously failed. A massive, widespread, collective failure for which they should lose their jobs, as many other people do. I am all for thoughtful discussions on how tech CEOs could be held responsible outside of empty mea culpas in blog posts, but "they should lose their jobs" feels like cutting off the nose to spite the face. Does ousting a CEO really help the company, or the workers who didn't get laid off? And where does the line get drawn? % of layoffs or absolute number of layoffs? How does the absolute size of a company get factored in?

superfrank 4y ago

I think the fact that so many CEOs got it wrong is actually an argument for why the shouldn't be fired. If one or two CEOs got it wrong, you could argue that they were incompetent, ignorant, or greedy and they should have been better informed because plenty of other CEOs were. Everyone getting something wrong says to me that the failure wasn't down to individual mistakes and there was something larger at play.

waboremo 4y ago
If your CEO is a lemming, they are not capable of leading a company. They should be fired. If you want to see a real leader, look at Tim Cook. He made decisions based specifically on where the company is, where it's going, and already factored in external factors (such as the pandemic growth). Contrast this to dozens of other "CEO"s who made a horrible decision hastily, executed layoffs horribly wrong, and then vaguely blamed a pandemic. The exact same lazy gameplan because these CEOs cannot lead, might as well replace them with chatgpt, maybe they'll write better layoff emails. As a reminder, the CEOs core role is to steer the company. When that ship slams into an iceberg, you have failed your core role. What happens when workers fail their core role?
- aliswe 4y ago
  why would a company like apple need to hire more people because of covid though?
  - NineStarPoint 4y ago
    Why would Meta have needed to either though? Or really Alphabet, Microsoft, Twitter, or a bunch of other companies? Maybe a handful more people to deal with scaling issues on products specific to pandemic needs, but the pandemic was always going to be temporary. They hired heavily in excess of just pandemic related concerns, it was more about expecting a paradigm shift. (Even now they almost all have substantially more people than before the pandemic though ,so you could argue it is less an error of type and more an error of magnitude)
- 4y ago

jedberg 4y ago

> collective failure for which they should lose their jobs, as many other people do. Only bad companies fire people for taking risks and failing. Good companies reward that behavior if the risk was reasonable and the learnings were positive. They fire people who take unnecessary risk. Hiring into the pandemic was a good risk in my opinion.

Apocryphon 4y ago
Why was it a good risk? The writing on the wall that tech was overinflated, that TC was insane, that the money printing was going to have a severe correction eventually. It should have been common wisdom that it was a temporary state of affairs because the growth in tech was not built on irreversible trends. Lockdown would end eventually. All of those food delivery apps, at the very least, could not expect exponential growth once restaurants opened again.
- jedberg 4y ago
  > The writing on the wall that tech was overinflated, that TC was insane, that the money printing was going to have a severe correction eventually. Sure, and then you lay people off when that correction comes in. In the meantime you're hiring the best people and having them do great work. And when they layoffs come, maybe some of them stay. > All of those food delivery apps, at the very least, could not expect exponential growth once restaurants opened again. Sure, but if they didn't build market share during the pandemic, they would never catch up afterwards. When the market is on fire, you need to ride the rocket. You always know that you have layoffs in your back pocket for when the market cools. It's not like these layoffs should be a surprise to anyone -- it happens after every hot market. Sure it absolutely sucks for those that are affected by it, I know because it happened to me in 2001. Barely got through it. But it's not a big surprise.
  - Apocryphon 4y ago
    It is a big surprise because tech was in its own superheated bubble for about fifteen years ago and human beings have short memories. So perhaps that's why Warren Buffett's dictum of being fearful when others are greedy is so important to remember, even in greedy times. But 1) it seems rather disingenuous for companies to posture one way and then pull the rug under their workforce who are being sacrificed in the name of a cooling market, and 2) perhaps companies should consider other ways to pursue profitability without massive layoff sprees?

lhorie 4y ago

I'm seeing a lot of this "screw up = get fired" narrative lately and I think it's a bit ironic. Talk about screwing up in engineering contexts and suddenly the tune changes: now people will talk about improving processes, blameless postmortems, and how the individual is not at fault. Imagine a youtuber saying googlers should be fired because some decision was made that affected the youtuber's income negatively. Or imagine an Uber driver saying that. Or a small business owner dealing w/ a Stripe mishap or whatever. If you are the one being targeted by these calls for loss of employment, then comes out the "I'm not the responsible person here" card. So on the one hand, you hear people with pitchforks about how CEOs or whoever need to take responsibility in some movie-esque "bad guy ending" fashion, but turn the tables and nobody wants to step up to be responsible for their own shit shows. Even if we entertain the idea of firing CEOs, is the implicit assumption that companies can run fine without one? By that logic, anyone could just give a bunch of money to a bunch of fiverr code monkeys and that business would run just fine? I don't really get what the logical conclusion of this whole line of argument is supposed to be.

josephcsible 4y ago
Executives should be held personally responsible for kinds of things that low-level employees aren't. That's why executives get paid so much more.
- foobiekr 4y ago
  Do you want execs that never take risks and simply milk cash cows until they die? Do you want golden parachutes? This is how you get these.
  - Clent 4y ago
    If we don't let them be bad in the job in one way, they'll be bad in the job in another way, therefore why bother. I reject these defeatist attitudes and question the engineering skills of anyone who thinks this way. It is always better to try something. Human created systems are inherently problematic and do not fix themselves. The dream is to engineer a system that does not have faults.

alldayeveryday 4y ago

Another variable to consider: the 2020 - 2022 market was rewarding growth (as opposed to profitability or being cash-flow positive). The Corporate loan interest rate was practically 0%. Companies which could show growth, even at the expense of lighting cash on fire, were rewarded as far as the stock market is concerned. CEOs are expected to bias towards shareholder value, lest they be replaced by someone who will. And so, with these variables in play, many took the decision to rapidly expand their operations (costs) in any way that produced marginal growth. They lived and died by their ability to, on each quarterly earnings call, share the message of QoQ and YoY growth. For many companies this required rapid hiring. The market now is demanding flesh and CEOs are either expected to provide it, or else get fired. Just like in the former time period, they would get fired had they not shown growth. I personally do not think a CEO should be fired now for having to hire employees, when they would have been fired in the first place had they not rapidly hired.

option 4y ago

they are accountable to shareholders not employees. This it is up to shareholders to decide whether CEO they employ failed or not.

HWR_14 4y ago

How did they fail? The spent 1 year salary times 15,000 people times $333,333/man-year. So $5 billion. That's a pretty big cost. On the other hand, it was a hedge against losing significant opportunities/market share. The question is "was it a good bet".

thunky 4y ago
Exactly. Just because they ended up reducing headcount doesn't mean they failed. Success isn't measured from the employee perspective. Everyone here calling for their heads is using the wrong measuring stick.
- HWR_14 4y ago
  It's also a success from the employee perspective. Those people got FAANG salaries for a year when they shouldn't have been hired.