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I don't really get the motivation for this beyond personal greed on behalf of executives that are only seeking to prop up the share price in the short term. Th

• der-erlkonig 4y ago
  Seems like sociopathic tendencies are a requirement for C-Suite Execs
  • jcadam 4y ago
    Mr. Zorg from 5th element is basically the archetype for a MegaCorp CEO.
    • red-iron-pine 4y ago
      These CEO traits were very, very clear long before The 5th Element was a thing.
• game_the0ry 4y ago
  > what is the difference of a few extra million market cap to handicap your ability to grow during the next expansion phase? For an executive, it's a big difference in stock based bonus. The executive level at corporate america tends to filter for status and financial obsessed sociopaths, so they make sociopathic decisions where they are content with making decisions that harm many (layoffs) but benefit themselves. That's how we got the enron, the great financial crisis of 2008, and many others.
  • jpgvm 4y ago
    That would make sense if a significant amount of their compensation stood to be made during the contraction. However if your tenure is expected to outlast the contraction then you would make more money in the long run by planning for how to be in the best position to exploit the market conditions during the next upswing. It's hard to do that if you layoff crucial staff that are part of your growth engine.
    • reisse 4y ago
      Average CEO tenure is 5 years and it's going down. Personal anecdote: I worked at a large EU tech company, then acquired by even larger US tech company. For the five years there, I've seen five different CEOs with almost fully different teams of other C-levels. After the second CEO you clearly start to see how long the next one expects to reign - just take the roadmap and look where reasonable and achievable goals convert into pipe dreams.
      • smugma 4y ago
        In contrast, FAANGM’s have had an average of <2 CEO’s in the past 20+ years.
        • reisse 4y ago
          Yes, on the scale of FAANG, the "I won't be in this position after a year" attitude shifts from C-level down to upper and middle management. I think it's because when you're a CEO of any of top-10 S&P500 companies, there is no next position for you to take, you're already at the very top of your personal career pyramid. And I honestly think that in any of them, neither mass hirings nor layoffs are initiated by CEOs. I'd bet it's rather "one person pushes through the idea of hiring a lot of people, a year after another person pushes the idea of laying them off".
          • smugma 4y ago
            At least at Apple, Amazon, and Google, most execs have been there 10+ years. One of the challenges is people often think “where’s my growth going to be if my Senior Director/VP isn’t going anywhere for 5 years?”
• reisse 4y ago
  > I can understand it if you have brought on a lot of fat and you want to lean out your team and need an excuse but outside of that rather narrow situation This doesn't really seem to be a rather narrow situation. The tech companies were hiring like crazy for the past two years. Quick googling shows that DigitalOcean increased headcount by 31% last year. And contrary to the popular opinion here, for me this does sound like the right move for the time. The logic, on the growing market, was "let's hire people now for 200k TC and give 50k raise after a year, because year later they'll be asking for 500k TC upfront". Now it's clear the salaries won't be going to the moon in the nearest future, so it makes sense to cut the fat.
  • slowmovintarget 4y ago
    One other factor in all of this is how companies used debt to sail through the pandemic. They took out loans, and now the bills are coming due. If you can't grow revenues to match interest payments, you often have to cut OpEx, and that seems to be what some companies are doing. Still sucks if you're on the receiving end, though.
    • stu2b50 4y ago
      I don’t think old loans are the problem. Corporate paper was dirt cheap during the pandemic, and the interest will still be dirt cheap now. The fact that new loans are not cheap thanks to high interest rates is the more threatening factor.
  • PragmaticPulp 4y ago
    This is a commonly overlooked point. Most of these companies doing layoffs will still have much larger employee counts than they did two years ago. Hiring in 2021 and 2022 was really out of control at many companies. There was a feeling that companies had to keep even the underperforming engineers earning $200K TC because it was so hard to hire replacements. That has changed, so it makes sense to start cutting the employees who were hired into roles they couldn’t handle. My company had layoffs late last year. It has only made things more efficient. We lost some good people, but there were too many people assigned to every project. Half of our time was spent dividing up work and coordinating across teams for things that should have been handled by a single team. There was just too much hiring in 2021 when money was cheap.
• colinmorelli 4y ago
  It's not to make one quarter look better, it's to align the company with new market expectations. Investors now are expecting responsible cash burn, since capital has become significantly more expensive than before. Companies exchanging cash for market share are no longer as attractive. Profitability and sustainable growth are the new objectives (personally I wish this was always the goal and think the last 3-5 years were a bit of a shame, but that's not the point - the market did not agree with me).
  • gtirloni 4y ago
    Maybe this apply at startups but not to established and cash-rich companies like Google.
    • stu2b50 4y ago
      Just because you have money, doesn’t mean you should burn more money than you need to. It’d be one thing if Google had a clear expansion goal that justified the extra headcount and cash burn, but they don’t. In the end, hiring is a transaction. Google does not have obligations beyond that, and neither do employees toward Google when there is a better transaction or when the terms no longer suit their needs.
    • colinmorelli 4y ago
      It absolutely applies at cash-rich companies as well. Losing money is losing money, no matter how much you have in the bank. I don't know why folks seem to keep thinking that having money means you can lose it forever, or that out of the kindness of the company's heart they can continue taking investor money it and funneling it back out to non-productive activities. For-profit companies exist to make money. Investors were willing to put that on hold for 5 years because interest rates were low enough to make borrowing cash effectively free, allowing you to trade cash in the short term for growth. That is no longer true, and they're no longer willing to do that. Put more clearly: investors __do not want to invest__ in companies that are burning money right now, no matter their cash balance. Responsible, profitable growth is the goal. Your cash backstop is not relevant.
  • 4y ago
• cramjabsyn 4y ago
  > I don't really get the motivation for this beyond personal greed That's all you had to say
• ravagat 4y ago
  > Why handicap yourself in the future just to make one quarter look better? Surely if you have faith your stock options will be worth more if you play the longer game? Is this specifically in reference to "I really don't understand cutting stuff like technical writers etc during these periods." ? If so, do you think technical writers are important business value wise?
  • snozolli 4y ago
    do you think technical writers are important business value wise? If they aren't, why were they hired in the first place?
    • ravagat 4y ago
      Offset writing duties to enable x higher output. (x = duty that is not writing). Probably could have worded the question instead as: "do you think technical writers are important business value wise to enable a full time position?" I've hired out technical writers full time and part time. And I've found it's far better to hire a technical writer part time or on contract vs. full time. The value to cost ratio is not comparable to technical roles.
• brianjking 4y ago
  late stage capitalism in a lot of the time. they fire ppl and hire them back for less.
• joe6pack6 4y ago
  That's exactly what happened 3 years ago too. Look at the sequence of events.