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It's cost-cutting in the sense that after lockdowns workers are getting too much power. Salaries are still high but now they don't even come to the office? How

It's cost-cutting in the sense that after lockdowns workers are getting too much power. Salaries are still high but now they don't even come to the office? How dare they. Now you create a wave of fear and uncertainty, new hires can't negotiate a remote position, they'll take anything because they need the job. Slowly we go back to where we were and maybe even lower compensation in the process. tin foil hat on

sfpotter 4y ago
Why is your tin foil hat on? You do not believe what you said is the case and are downplaying its likelihood? If you do think this is the explanation, I think you can safely take the tin foil hat off. It’s hardly that unlikely, and many people think this is exactly the reason for the layoffs. Companies have every incentive to do this.
- luckylion 4y ago
  Companies have every incentive to fire their productive employees that know their product and processes well and who they desperately need to expand their business ... hoping to maybe weaken the negotiation position of future employees they may or may not hire at some point in the future? Sorry, that contains a healthy dose of "trust me, all managers are complete idiots who would rather spend a million on hiring new people than spend 10k on retaining their employees".
  - chank 4y ago
    Problem is, in large companies, managers are so focused on short-term outlook they don't really consider or care about long-term implications.
  - vgatherps 4y ago
    > Sorry, that contains a healthy dose of "trust me, all managers are complete idiots who would rather spend a million on hiring new people than spend 10k on retaining their employees". Empirically this view is valid. The managers themselves don't even need to be stupid. A bad incentive structure (or even interaction of locally-reasonable ones) might reward bad behavior.
    - luckylion 4y ago
      In all companies, and conveniently only when layoffs are affected? I have some doubts. Most people think their own contributions are invaluable, and when they or someone in a similar position get laid off, that challenges that self-image and the obvious explanation is: their perception is completely accurate, but the others are idiots and cannot see it, or they see it, but are ruled by perverse incentives that make them kill the company instead of doing The Right Thing (i.e. keeping and promoting the employee). It's understandable, but I don't see much value in that line of thinking.
  - rob74 4y ago
    Companies have every incentive to look good in the eyes of their shareholders, and not cutting costs when everybody else is doing it doesn't look good. And most managers would say that firing 10% of their staff (supposedly the worst performers) would not affect the productivity of the company much. What they fail to consider is the "middle finger" mentioned at the end of the article - even the most naive employee is now aware that the phrases of "employees are our most important asset" are just so much BS, and will act accordingly.
    - TeMPOraL 4y ago
      > What they fail to consider is the "middle finger" mentioned at the end of the article - every employee is now aware that the phrases of "employees are are most important asset" are just so much BS, and will act accordingly. It may not work out well for the employees, though: once everyone stops pretending to care, the companies will be less worried about someone else giving you a better offer, so your negotiating leverage may just go down the drain.
    - screwturner68 4y ago
      I know EMC used to fire 10% of their workforce every year, it was stupid but that's what they did. My question is if these people hadn't been pulling their weight why did you wait so long to chop their head? I see it at my company where groups will keep dead weight around just so they have someone to fire when management wants a head, again it's silly but it's better than having to fire a productive worker that actually will effect the bottom line if they get fired.
  - stuaxo 4y ago
    Managers incentives are not automatically aligned with "the companies" incentives (for a simplified version where "the company" wants only profit). Company being just a big bag of people - at different levels, there are all sorts of different incentives going on.
  - watwut 4y ago
    To be frank, managerial positions have super low accountability. Their career successes and failures are disconnected from their ability to lead the teams. They don't need to be stupid to make decisions that do not benefit companies they work for. They might just read incentives they operate under right.
  - ravingraven 4y ago
    For many companies this is counter-intuitive but true. Companies (just like people) are not fully rational economic actors. A lot of the decision-making in companies revolves around power-plays and revenge. Managers fire people they don't like or they feel they do not have leverage over all the time. In a sufficiently large team/company, it is trivial to portray a good performer as a bad one and vice versa. Managers (including CEOs) are just as sexist/racist as anyone and do promote based on biases and personal feelings. Managment greatly enjoys the feeling of power they have over people and I don't think it is absurd to say that they are fed up with the current dynamic that takes part of this away from them and are firing people just to create an atmosphere of fear.
    - luckylion 4y ago
      > I don't think it is absurd to say that they are fed up with the current dynamic that takes part of this away from them and are firing people just to create an atmosphere of fear. But it's been that way forever in tech companies: SWE make enormous amounts of money and can control their work + environment a lot. In the world where corporations function like torture dungeons and managers are running around looking for opportunities to satisfy their sadist urges, how would the boom cycles ever happen where employees get whatever they ask for and 5 years of work straight out of university can get you enough money to retire to a modest life without ever lifting another finger. Managers are all bipolar? Do they have meetings where they coordinate when to lure the people in and then all release their hate at once for maximum effect? That just doesn't make a lot of sense to me whereas the cyclic nature of the economy and the external stimulus through a) everyone being in their homes a lot more because of the pandemic, and b) money pouring in like crazy because of the central banks explains both the aggressive hiring (during hard upswings and cheap money) as well as the trimming (during downturns and less cheap money). If it's one company, sure, it may be because of some manager hating people. But pretty much all companies with the exception of Apple (so far, and who also only indirectly employs a lot of their people, so they don't fire them, they just terminate the contracts with their employers, who then fire them)? That would need coordination beyond "monkey see, monkey do".
      - Jensson 4y ago
- howmayiannoyyou 4y ago
  You people are working for the wrong businesses. My company and other SMALL businesses I know retain productive people through good times and bad. There's some shared pain in those bad times, and shared upside in the good. Why? Because we're human beings, in a small tribe, and we care about each other. This falls on deaf ears when I'm interviewing and candidates want the prestigious name on their resume, or a game room in their office, or mega-benefits small businesses cannot provide. I've had two productive employees leave my small business for big corporations. Two came back. One started their own small business.
  - deleted 4y ago
    [deleted]
  - baremetal 4y ago
    You sound like a smart operator. What does your business do? And are you hiring?
  - screwturner68 4y ago
    I've worked for very small companies (2-3 employees) and massive companies (100K+) and my biggest issue with small companies is that the slightest problem can sink a company or get you fired. In a large company if you lose a section of business nobody is happy about it but it won't put us out of business. It's pretty impersonal and you have to do a lot of pointless stuff just because but in my opinion your longevity is higher.
    - howmayiannoyyou 4y ago
      Trade-offs. Inability accept trade-offs & inherent inequality of options and outcomes is a plague.
  - emodendroket 4y ago
    On the other hand if you fail to navigate the world’s pettiest and nastiest politics you can end up out anyway, and the pay and benefits are worse.
pydry 4y ago
It's interesting that one needs a tin foil hat to believe that Google is once again doing something they've already been caught doing and fined 300 million for.
realjhol 4y ago
You really don't need to apologise for theorising about conspiracies - especially when the incentives are so obviously in favour of them happening. This is the week in which the lab leak theory was finally confirmed in public- something that was obviously likely to be true from the start of the pandemic
- consp 4y ago
  The grain of salt needed for calling that latter part confirmed is so big it almost covers the entire story.
- piva00 4y ago
  There was no confirmation of the lab leak theory, there was a report with "low confidence" of it being one. You should apologise for trying to paint it in a different way, even more for calling it "confirmed", it's either deceptive or blatantly ignorant.
matwood 4y ago
> even lower compensation People seem to forget that when the fed talks about inflation, they are also talking about wage inflation. Raising rates slows hiring, and should slow wage growth. That is the whole point.
howmayiannoyyou 4y ago
1. Cuts are companies preparing for recession. We are long overdue for a down cycle and every indicator says its here or on its way. 2. Workers increased salaries were passed to consumers. No problem until consumers stop purchasing. https://fred.stlouisfed.org/series/UMCSENT https://fred.stlouisfed.org/series/UMCSENT 3. In a recession cash flow is everything. For most companies labor is the largest variable element of cash flow. 4. Wages don't go down. Not that they cannot, they just don't. https://fred.stlouisfed.org/series/ECIWAG https://fred.stlouisfed.org/series/ECIWAG Tin foil hats are a crutch for a lack of understanding, or a tool for total understanding. Which case applies to you?
- humanrebar 4y ago
  > Workers increased salaries were passed to consumers. No problem until consumers stop purchasing. So certain product lines or businesses can't afford the same number of engineers maybe. But the demand for good software engineers seems to far outstrip the supply so suppression of wages doesn't seem like an appropriate resolution to the problem.
- acdha 4y ago
  > 4. Wages don't go down. Not that they cannot, they just don't One thing to consider is how companies lower wages by reclassifying the work. Converting staff jobs into “independent” contractors saves the company a lot of money in benefits even if the hourly rates appear to be stable or even increase slightly.
  - screwturner68 4y ago
    I work for a large SV company and I've had my pay temporarily cut by 5-10% with the promise that there wouldn't be mass layoffs three times over the years. It usually lasts 6 months to a year. It's a pretty standard process; contractors are cut, early retirements are offered and then either layoffs or an across the board pay cut.
- kasey_junk 4y ago
  The problem with that is that there aren’t widespread indicators we are in or going to recession. The opposite is actually true, all the indicators for recession happened prior to the layoffs. At worst the current economic stats are mixed. Similarly, consumer spending has remained incredibly high, and non-tech firms are ramping up still from the covid downturn. It’s just as likely that tech companies just did a bad job forecasting future growth than they are preparing for a broad based downturn.
mc32 4y ago
That may be a very far secondary reason. The main reason is macroeconomics. There is uncertainty and there is obvious fat. If people can dilly dally and do those iconic TikTok tours showing how much nothing they do at work… it’s an indication of frothy hiring. A nice to have consultant or FTE or two per team and you end up with a lot of fat over time. They could sustain it or hide it under the rug previously, but not when budgets shrink in anticipation of macroeconomic slowdown.

sfpotter 4y ago

Why is your tin foil hat on? You do not believe what you said is the case and are downplaying its likelihood? If you do think this is the explanation, I think you can safely take the tin foil hat off. It’s hardly that unlikely, and many people think this is exactly the reason for the layoffs. Companies have every incentive to do this.

luckylion 4y ago
Companies have every incentive to fire their productive employees that know their product and processes well and who they desperately need to expand their business ... hoping to maybe weaken the negotiation position of future employees they may or may not hire at some point in the future? Sorry, that contains a healthy dose of "trust me, all managers are complete idiots who would rather spend a million on hiring new people than spend 10k on retaining their employees".
- chank 4y ago
  Problem is, in large companies, managers are so focused on short-term outlook they don't really consider or care about long-term implications.
- vgatherps 4y ago
  > Sorry, that contains a healthy dose of "trust me, all managers are complete idiots who would rather spend a million on hiring new people than spend 10k on retaining their employees". Empirically this view is valid. The managers themselves don't even need to be stupid. A bad incentive structure (or even interaction of locally-reasonable ones) might reward bad behavior.
  - luckylion 4y ago
    In all companies, and conveniently only when layoffs are affected? I have some doubts. Most people think their own contributions are invaluable, and when they or someone in a similar position get laid off, that challenges that self-image and the obvious explanation is: their perception is completely accurate, but the others are idiots and cannot see it, or they see it, but are ruled by perverse incentives that make them kill the company instead of doing The Right Thing (i.e. keeping and promoting the employee). It's understandable, but I don't see much value in that line of thinking.
- rob74 4y ago
  Companies have every incentive to look good in the eyes of their shareholders, and not cutting costs when everybody else is doing it doesn't look good. And most managers would say that firing 10% of their staff (supposedly the worst performers) would not affect the productivity of the company much. What they fail to consider is the "middle finger" mentioned at the end of the article - even the most naive employee is now aware that the phrases of "employees are our most important asset" are just so much BS, and will act accordingly.
  - TeMPOraL 4y ago
    > What they fail to consider is the "middle finger" mentioned at the end of the article - every employee is now aware that the phrases of "employees are are most important asset" are just so much BS, and will act accordingly. It may not work out well for the employees, though: once everyone stops pretending to care, the companies will be less worried about someone else giving you a better offer, so your negotiating leverage may just go down the drain.
  - screwturner68 4y ago
    I know EMC used to fire 10% of their workforce every year, it was stupid but that's what they did. My question is if these people hadn't been pulling their weight why did you wait so long to chop their head? I see it at my company where groups will keep dead weight around just so they have someone to fire when management wants a head, again it's silly but it's better than having to fire a productive worker that actually will effect the bottom line if they get fired.
- stuaxo 4y ago
  Managers incentives are not automatically aligned with "the companies" incentives (for a simplified version where "the company" wants only profit). Company being just a big bag of people - at different levels, there are all sorts of different incentives going on.
- watwut 4y ago
  To be frank, managerial positions have super low accountability. Their career successes and failures are disconnected from their ability to lead the teams. They don't need to be stupid to make decisions that do not benefit companies they work for. They might just read incentives they operate under right.
- ravingraven 4y ago
  For many companies this is counter-intuitive but true. Companies (just like people) are not fully rational economic actors. A lot of the decision-making in companies revolves around power-plays and revenge. Managers fire people they don't like or they feel they do not have leverage over all the time. In a sufficiently large team/company, it is trivial to portray a good performer as a bad one and vice versa. Managers (including CEOs) are just as sexist/racist as anyone and do promote based on biases and personal feelings. Managment greatly enjoys the feeling of power they have over people and I don't think it is absurd to say that they are fed up with the current dynamic that takes part of this away from them and are firing people just to create an atmosphere of fear.
  - luckylion 4y ago
    > I don't think it is absurd to say that they are fed up with the current dynamic that takes part of this away from them and are firing people just to create an atmosphere of fear. But it's been that way forever in tech companies: SWE make enormous amounts of money and can control their work + environment a lot. In the world where corporations function like torture dungeons and managers are running around looking for opportunities to satisfy their sadist urges, how would the boom cycles ever happen where employees get whatever they ask for and 5 years of work straight out of university can get you enough money to retire to a modest life without ever lifting another finger. Managers are all bipolar? Do they have meetings where they coordinate when to lure the people in and then all release their hate at once for maximum effect? That just doesn't make a lot of sense to me whereas the cyclic nature of the economy and the external stimulus through a) everyone being in their homes a lot more because of the pandemic, and b) money pouring in like crazy because of the central banks explains both the aggressive hiring (during hard upswings and cheap money) as well as the trimming (during downturns and less cheap money). If it's one company, sure, it may be because of some manager hating people. But pretty much all companies with the exception of Apple (so far, and who also only indirectly employs a lot of their people, so they don't fire them, they just terminate the contracts with their employers, who then fire them)? That would need coordination beyond "monkey see, monkey do".
    - Jensson 4y ago
howmayiannoyyou 4y ago
You people are working for the wrong businesses. My company and other SMALL businesses I know retain productive people through good times and bad. There's some shared pain in those bad times, and shared upside in the good. Why? Because we're human beings, in a small tribe, and we care about each other. This falls on deaf ears when I'm interviewing and candidates want the prestigious name on their resume, or a game room in their office, or mega-benefits small businesses cannot provide. I've had two productive employees leave my small business for big corporations. Two came back. One started their own small business.
- deleted 4y ago
  [deleted]
- baremetal 4y ago
  You sound like a smart operator. What does your business do? And are you hiring?
- screwturner68 4y ago
  I've worked for very small companies (2-3 employees) and massive companies (100K+) and my biggest issue with small companies is that the slightest problem can sink a company or get you fired. In a large company if you lose a section of business nobody is happy about it but it won't put us out of business. It's pretty impersonal and you have to do a lot of pointless stuff just because but in my opinion your longevity is higher.
  - howmayiannoyyou 4y ago
    Trade-offs. Inability accept trade-offs & inherent inequality of options and outcomes is a plague.
- emodendroket 4y ago
  On the other hand if you fail to navigate the world’s pettiest and nastiest politics you can end up out anyway, and the pay and benefits are worse.

pydry 4y ago

It's interesting that one needs a tin foil hat to believe that Google is once again doing something they've already been caught doing and fined 300 million for.

realjhol 4y ago

You really don't need to apologise for theorising about conspiracies - especially when the incentives are so obviously in favour of them happening. This is the week in which the lab leak theory was finally confirmed in public- something that was obviously likely to be true from the start of the pandemic

consp 4y ago
The grain of salt needed for calling that latter part confirmed is so big it almost covers the entire story.
piva00 4y ago
There was no confirmation of the lab leak theory, there was a report with "low confidence" of it being one. You should apologise for trying to paint it in a different way, even more for calling it "confirmed", it's either deceptive or blatantly ignorant.

matwood 4y ago

> even lower compensation People seem to forget that when the fed talks about inflation, they are also talking about wage inflation. Raising rates slows hiring, and should slow wage growth. That is the whole point.

howmayiannoyyou 4y ago

1. Cuts are companies preparing for recession. We are long overdue for a down cycle and every indicator says its here or on its way. 2. Workers increased salaries were passed to consumers. No problem until consumers stop purchasing. https://fred.stlouisfed.org/series/UMCSENT https://fred.stlouisfed.org/series/UMCSENT 3. In a recession cash flow is everything. For most companies labor is the largest variable element of cash flow. 4. Wages don't go down. Not that they cannot, they just don't. https://fred.stlouisfed.org/series/ECIWAG https://fred.stlouisfed.org/series/ECIWAG Tin foil hats are a crutch for a lack of understanding, or a tool for total understanding. Which case applies to you?

humanrebar 4y ago
> Workers increased salaries were passed to consumers. No problem until consumers stop purchasing. So certain product lines or businesses can't afford the same number of engineers maybe. But the demand for good software engineers seems to far outstrip the supply so suppression of wages doesn't seem like an appropriate resolution to the problem.
acdha 4y ago
> 4. Wages don't go down. Not that they cannot, they just don't One thing to consider is how companies lower wages by reclassifying the work. Converting staff jobs into “independent” contractors saves the company a lot of money in benefits even if the hourly rates appear to be stable or even increase slightly.
- screwturner68 4y ago
  I work for a large SV company and I've had my pay temporarily cut by 5-10% with the promise that there wouldn't be mass layoffs three times over the years. It usually lasts 6 months to a year. It's a pretty standard process; contractors are cut, early retirements are offered and then either layoffs or an across the board pay cut.
kasey_junk 4y ago
The problem with that is that there aren’t widespread indicators we are in or going to recession. The opposite is actually true, all the indicators for recession happened prior to the layoffs. At worst the current economic stats are mixed. Similarly, consumer spending has remained incredibly high, and non-tech firms are ramping up still from the covid downturn. It’s just as likely that tech companies just did a bad job forecasting future growth than they are preparing for a broad based downturn.

mc32 4y ago

That may be a very far secondary reason. The main reason is macroeconomics. There is uncertainty and there is obvious fat. If people can dilly dally and do those iconic TikTok tours showing how much nothing they do at work… it’s an indication of frothy hiring. A nice to have consultant or FTE or two per team and you end up with a lot of fat over time. They could sustain it or hide it under the rug previously, but not when budgets shrink in anticipation of macroeconomic slowdown.