9 ms·

Is this the same CEO who decided to double the engineering team in a single year? https://techcouver.com/2021/01/06/shopify-to-double-engineering-team/ https:/

• Cthulhu_ 3y ago
  It just reiterates that on a high enough level, employees are just numbers, resources and sliders to fiddle with, often having a direct correlation with share price.
  • pdntspa 3y ago
    This is exactly what is taught in business school. It's why you are a human resource, a thing to be used, rather than a human being with skills and a story and a life and needs
• andsoitis 3y ago
  He is also a co-founder and owns 7% of the company.
• jimmytucson 3y ago
  The notion that this CEO and hundreds of others made bad decisions by over-hiring is sensible, but the fact that so many made the same mistake at the same time makes me second-order think this. As cruel as it sounds, what if over-hiring was a good long term decision? What would that imply? It would mean that _not_ hiring aggressively in a high-inflation period is harmful to business. To me, that is far more interesting to think about than CEOs making dumb mistakes and not getting punished for it because life isn't fair...
  • shadowvanned 3y ago
    [dead]
  • nahname 3y ago
    What if their decision making is just doing what everyone else is doing?
  • sokoloff 3y ago
    I feel like not hiring aggressively in a _low-interest-rate environment_ is harmful to your business. Assuming you have some productive use for the incremental employees, the discounted returns from those employees' contributions are decreased by an uncertainty factor and by the risk-free interest rate. When that latter term is near zero, hiring is restricted by the uncertainty of their performance and projects assigned to, meaning you get a lot of hiring by sensible, data-driven management teams.
• shadowvanned 3y ago
  [dead]
• rcme 3y ago
  From a business perspective, this is great for Shopify. The labor market for software engineers has seriously softened as a result of all the layoffs. Go look at job openings and their posted salaries. When Shopify beings hiring again, they are going to be able to hire talent at a fraction of the price. Also, this is largely a coordinated effort from activist investors specifically targeting large tech salaries. E.g. https://www.businessinsider.com/google-layoffs-cut-jobs-excessive-pay-investor-alphabet-2023-1 https://www.businessinsider.com/google-layoffs-cut-jobs-exce... There is essentially a vicious cycle targeting tech compensation. Activist investors are convincing boards that they're overpaying their tech talent. Then those boards approve layoffs. Then those layoffs further lower salaries. Rinse and repeat.
  • ngcazz 3y ago
    It's basically class warfare
  • pastor_bob 3y ago
    Shopify already pays at the low end. I mean, not even relative to FAANG; you can make a similar salary at a government job as an engineer.
    • dvdhnt 3y ago
      This hasn't been true for the last couple of years. source: I was a Shopify employee until today and can confirm my salary was closer to FAANG than not.
      • mattgreenrocks 3y ago
        Sorry to hear that. Hope you can find a new job soon!
        • dvdhnt 3y ago
          Much appreciated, thank you.
    • 3y ago
• HDThoreaun 3y ago
  Over hiring in the face of uncertain macro conditions and consumption changes is probably the right choice. If your market expands as you believe it might you're ready to step in and grow. If it doesn't grow you can just lay people off and you're back where you started. The important thing here though is that it's hard to catch up to competitors that have lapped you but it's easy to slow down when you're ahead. If you think there's just a 10% chance that covid causes e-commerce to 10x in size it makes sense to prepare as though it will and then shrink the workforce if things go back to normal.
  • ryukafalz 3y ago
    > If it doesn't grow you can just lay people off and you're back where you started. "Back where you started" with a now highly demotivated team isn't quite back where you started.
    • ethanbond 3y ago
      Usually when there are layoffs the environment outside the company is not so great either
      • jq-r 3y ago
        If the company didn't do a round of layoffs I'm sure the workers would appreciate that, despite what's going on outside of the company. So even if the company hits a rough patch they'll stick with it, instead of abandoning ship. Or as they say, respect is a two way street.
      • Timon3 3y ago
        You will still lose your best people.
    • m-ee 3y ago
      Severance costs money as well
    • morkalork 3y ago
      Shopify already had a reputation for over hiring and firing those that didn't perform exceptionally.
• 908B64B197 3y ago
  According to the man himself >>Our numbers were unhealthy, just like it is in much of the tech industry. But that didn't prevent him from profiting from it nor from the layoffs. To be completely honest, I've never been bullish on Shopify. To me it looked like a "mee too" play for investors that missed the boat on Amazon, Square and Stripe.
• clpm4j 3y ago
  Also the same CEO who joined Coinbase's board last year, and has seemingly fallen down the crypto rabbit hole. Maybe he's lost a bit of focus on Shopify.
  • pbreit 3y ago
    Also the same CEO who has built a $75b company.
    • spaceguillotine 3y ago
      easier to do when you have terrible ethics
      • pbreit 3y ago
        Tobi is one of the highest ethic persons in the industry. Can you point to any examples that would suggest otherwise?
• VoodooJuJu 3y ago
  >Aren’t CEOs paid ludicrously well to make long term decisions, rather than just flail around? CEO's are neither prophets nor oracles. They are effectively dice-rolls with a face. Not rollers, but rolls. No matter what, sometimes you get bad numbers. Founder CEO's like Lutke are heroes. They have skin in the game. This forces them to calculate their risks. Their actions and decisions have greater weight because of this - their payday is not guaranteed, especially early on in the game. Non-founder CEO's are rent-collectors. They have no skin in the game. Unlimited upside and no downside. They get a handsome payday no matter what. Non-founder CEO's and the absence of skin in the game is what yields the bastardy that is modern corporatism: highly-paid people who can flail around all they want and still land on their feet. In this case, Lutke made a bad bet, but with Shopify's success, he's at the point where the result of his bets have no impact on him. He already got his payday.
  • lazyasciiart 3y ago
    So he is actually in the same position as a non-founder CEO at this point.
  • ink_13 3y ago
    Lutke's not a hero, he's a mini-Zuckerberg: he still runs the company he founded as CEO, but he has already made more than enough money to comfortably retire. Also like Zuckerberg, his company might be better off without him at this point, since being practically unaffected by success or failure makes continuing as CEO something of a vanity project.
    • idopmstuff 3y ago
      Virtually anybody else who they'd hire as a CEO would also have more than enough money to comfortably retire. Lutke has more reputation/passion/history/identity tied up in the company than anyone else would - where money isn't a driving factor, deep connection to the thing you're working on is probably the most important motivation.
      • ink_13 3y ago
• sharkweek 3y ago
  A favorite quote of mine about the role of a CEO from the movie Margin Call. Tuld, the CEO of a major bank the night before the housing crisis in 08 starts to fly out of control, after one of the bank's risk analysts discovers they're holding toxic assets: John Tuld : So, what you're telling me, is that the music is about to stop, and we're going to be left holding the biggest bag of odorous excrement ever assembled in the history of capitalism. Peter Sullivan : Sir, I not sure that I would put it that way, but let me clarify using your analogy. What this model shows is the music, so to speak, just slowing. If the music were to stop, as you put it, then this model wouldn't even be close to that scenario. It would be considerably worse. John Tuld : Let me tell you something, Mr. Sullivan. Do you care to know why I'm in this chair with you all? I mean, why I earn the big bucks. Peter Sullivan : Yes. John Tuld : I'm here for one reason and one reason alone. I'm here to guess what the music might do a week, a month, a year from now. That's it. Nothing more. And standing here tonight, I'm afraid that I don't hear - a - thing. Just... silence.
• kypro 3y ago
  To be fair it's extremely hard to make long-term decisions when you have politicians deciding to arbitrarily lock down the economy forcing all small businesses to engage in e-commerce, and when you have a Federal Reverse which alternates between creating financial bubbles and financial crises every couple of years. Shopify being a beneficiary of both the government mandated lockdowns and the Fed backed investment bubble really had no option but to dramatically increase headcount. Their business literally doubled from 2020-2021 due these actions. To believe in 2021 that in 2022 the Fed would undergo the most aggressive tightening cycle in history triggering significant headwinds for both startups like Shopify and their small business customers was absurd. At the time the Fed was saying that they weren't "even thinking about thinking about raising rates" so you basically had to assume that Fed lacked all credibility. I guess what I'm saying here is that there is a reason why so many companies got this wrong beyond incompetence. So if you don't like it you should consider redirecting your outrage.
• tootie 3y ago
  CEOs are tasked with maximizing shareholder value and he seems to have succeeded.