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I’m getting tired of the “X lays off employees after <insert proxy for company making money>” headlines. A company making money does not correlate to them needi

by lumb63 3y ago

I’m getting tired of the “X lays off employees after <insert proxy for company making money>” headlines. A company making money does not correlate to them needing employees. A contrived example: Company Y employs 1000 people. They make $1B off of their last project, Medium Project, and next week they’re going to finish Big Project. Half of their company is working on Big Project right now, and none of their other teams would benefit from more workers. What should Company Y do after Big Project is complete? Company Y could pay their employees to sit around, but why would they? If they don’t have anything coming down the pipe, they should save their money. A lot of companies, especially tech companies, since they are highly dependent on growth, had staff on projects that weren’t expected to be profitable for a long time. When the Fed raised interest rates, the discount rate of those investments increased, making them less valuable today. We see layoffs as a result, since projects that were previously valuable no longer are. It has nothing to do with “the company made X dollars this year”. Even if you made 10x your annual income (this is a gigantic overexaggeration to these companies’ results) in a year, would you use it to justify spending on something you didn’t need? What if you strongly suspected a recession was coming? The businesses laying people off are are making rational decisions, and people are outraged at them. Why not instead be outraged at the Federal Reserve for manipulating interest rates? Why not be mad at the government for mandating lockdowns during COVID that fueled the massive inflation that caused the Federal Reserve to raise interest rates? Instead, people are pointing fingers at the companies for fulfilling their role: to make money; and next time a similar situation comes around, the groups that actually caused the layoffs will get off scot-free…again.

Ancalagon 3y ago
In contrast, I love seeing these headlines. Really puts into perspective who not to work for and what to look out for in a position.
- fastball 3y ago
  You see a company you don't want to work for because they fire people, I see a company I would want to work for because they don't keep around people they don't need. Don't get me wrong, I don't actually want to work for Intel, but my entire personal ethos is basically "efficiency is good, actually", and it is interesting how differently other people see the world.
  - Ancalagon 3y ago
    That's all well and good I guess, but if it were just for efficiency's sake shouldn't they then just hire contractors? Hiring FTE's is a weird bait-and-switch when they then lay them off a year later.
    - fastball 3y ago
      People don't seem to like that solution much either, just look at Uber et al.
dylan604 3y ago
>Company Y could pay their employees to sit around, but why would they? I worked a short stint for a couple of years at a post house that fell into this very predicament. They staffed up to complete a full length 3D animated feature. They were very excited about the accomplishment and on that high energy wave decided to keep the staff around from encouraging plans at starting work on a new feature. Those plans never came to fruition and the team languished and became a very expensive part of the company's books. Other divisions suddenly became less profitable because they were supplementing the whole employee base. So not only did it affect the bottom line, it also negatively affected morale of all of those actively working. In Hollywood, avoiding this is common by laying off everyone at the end of production. For seasonal/episodic shows, people are re-hired when the next season goes into production.
xp84 3y ago
> If they don’t have anything coming down the pipe, they should save their money. I know it's a hypothetical and I get your point in a way, but I think in that example the execs have some explaining to do as well, as to why they hired those 500 FTEs for a temporary need, or why they apparently have no further interesting ideas to work on. I guess you could point to Shopify or Meta as a real-life example of this, where they were on an absolute hiring spree and didn't stop to ask themselves if they actually needed that staff in the first place. If they never plan to expand again, it sounds like the company will wither without any innovation or research taking place, and if they do plan to do another 180 and hire 500 people next year, they really need to consider how expensive hiring and training is and maybe smooth out their pipeline a bit so they don't have to oscillate so wildly.

by lumb63 3y ago

Ancalagon 3y ago

In contrast, I love seeing these headlines. Really puts into perspective who not to work for and what to look out for in a position.

fastball 3y ago
You see a company you don't want to work for because they fire people, I see a company I would want to work for because they don't keep around people they don't need. Don't get me wrong, I don't actually want to work for Intel, but my entire personal ethos is basically "efficiency is good, actually", and it is interesting how differently other people see the world.
- Ancalagon 3y ago
  That's all well and good I guess, but if it were just for efficiency's sake shouldn't they then just hire contractors? Hiring FTE's is a weird bait-and-switch when they then lay them off a year later.
  - fastball 3y ago
    People don't seem to like that solution much either, just look at Uber et al.

dylan604 3y ago

>Company Y could pay their employees to sit around, but why would they? I worked a short stint for a couple of years at a post house that fell into this very predicament. They staffed up to complete a full length 3D animated feature. They were very excited about the accomplishment and on that high energy wave decided to keep the staff around from encouraging plans at starting work on a new feature. Those plans never came to fruition and the team languished and became a very expensive part of the company's books. Other divisions suddenly became less profitable because they were supplementing the whole employee base. So not only did it affect the bottom line, it also negatively affected morale of all of those actively working. In Hollywood, avoiding this is common by laying off everyone at the end of production. For seasonal/episodic shows, people are re-hired when the next season goes into production.

xp84 3y ago

> If they don’t have anything coming down the pipe, they should save their money. I know it's a hypothetical and I get your point in a way, but I think in that example the execs have some explaining to do as well, as to why they hired those 500 FTEs for a temporary need, or why they apparently have no further interesting ideas to work on. I guess you could point to Shopify or Meta as a real-life example of this, where they were on an absolute hiring spree and didn't stop to ask themselves if they actually needed that staff in the first place. If they never plan to expand again, it sounds like the company will wither without any innovation or research taking place, and if they do plan to do another 180 and hire 500 people next year, they really need to consider how expensive hiring and training is and maybe smooth out their pipeline a bit so they don't have to oscillate so wildly.