4 ms·

Is it not better/preferable to freeze salaries than to cut more staff? From a morale PoV, from a human PoV, except maybe not from an individual PoV, overall.

by mc32 3y ago

onlyrealcuzzo 3y ago
It might be better if you didn't over hire. I can't speak for MSFT. But a lot of tech companies definitely hired to banana town. Cutting would be better than freezing salaries.
- mc32 3y ago
  Hiring gives someone experience they sought and presumably would not have had (else they might have kept put). So overhiring in some light does look bad, on the other hand it gives some people the necessary experience for their next step in their carrers.
  - echelon 3y ago
    > So overhiring in some light does look bad, on the other hand it gives some people the necessary experience for their next step in their carrers. Not if they were let go before their first year, which has been the case at a lot of tech companies recently. New hires, juniors especially, need a lot of time to onboard. Lessons in the first weeks and months of a new job will be more about company-specific tooling and minutiae, not engineering in the broader scope. Portable lessons come later, usually after you've found your legs.
- afavour 3y ago
  > Cutting would be better than freezing salaries. Surely that depends on whether you're one of those getting cut or not.
- geodel 3y ago
  Yes a lot of companies hired a lot more. A lot of money also got distributed in this process which otherwise wouldn't have. Laid off employees got some work experience out of it. Better than nothing. I don't get this stuck up argument again and again Why did they hire before? As if there is some really great answer that can reveal itself by repeatedly asking this question. > Cutting would be better than freezing salaries. Many would like same or lower salary than being laid off. Those who looking for higher salaries can move on just like they always have.
  - throw8383833jj 3y ago
    i thought the answer was Jack welch philosophy of management: always overhire and then prune 10% of your workforce every year. the theorey goes that way, you keep the best and loose the rest. But, that assumes that employees are interchangable like cogs which isn't true. plus, most companies aren't necessarily able to determine who's best and worst and may even end up laying off those who are better.
- wintogreen74 3y ago
  They hired with someone else's money though, now they're looking to cut when it's their own.
mirekrusin 3y ago
Would be better to cancel bonuses instead.
sidfthec 3y ago
> Is it not better/preferable to freeze salaries than to cut more staff? Hint: Neither is needed for most of these big tech companies.
- mason55 3y ago
  Large tech companies don't exist to serve as employment programs for software engineers. If they believe it will increase profits without longterm harm then layoffs/salary freezes are the right thing for them to do as a company even if they are wildly successful. Layoffs are frequently done when a company is struggling, so people seem to think it's incongruous for a company to do layoffs if they are doing well.
  - sidfthec 3y ago
    > If they believe it will increase profits without longterm harm then layoffs/salary freezes are the right thing for them to do as a company even if they are wildly successful. And that doesn't need to be the case. Many of these multi-national big tech companies have failed to move forward with layoffs in some countries because of laws that protect workers. For example, in some countries, companies need to prove that they're struggling in order to lay people off.
- DiggyJohnson 3y ago
  Surely though if it’s in the companies interest to not keep certain staff on the payroll now (I.e.), that’s because they believe reducing headcount will make them a healthier company. A healthier company has more longevity, and a company with more longevity will hire more people in the long term than an inefficient or bloated company. I feel like your perspective does not take time horizons into account.
schainks 3y ago
Do not have mercy for a faceless corporation continually posting profits that grow quarter over quarter. They are rolling in money and could cut executive comp or something else, but choose not to.
- nickpp 3y ago
  Executives lost to competition due to cut comp are much harder to replace than regular workers. Sucks, but it’s the reality.
  - oh_sigh 3y ago
    If, say, Sundar was only offered a $100M package instead of a $226M package, where would he go that would pay him more than $100M? There's no other person out there who would do the job for $100M? An issue would be that Sundar is plugged into Google and knows all the ins and outs and has the relationships that an outsider would take some time to learn/form, but on the same hand, Sundar going out into the wide world is then lacking those same things at his new company, meaning new companies might be as hesitant to hire him as Google would be to hire a new outsider CEO.
    - sokoloff 3y ago
      > There's no other person out there who would do the job for $100M? I'd be willing to do a terrible job at it for only $10M/yr. That's not what the shareholders want; they want Sundar to keep doing what is, from the shareholders' point of view, a quite respectable job, seeing the shares grow from $34 when he become CEO to $112 now for a CAGR of around 17%.
      - oh_sigh 3y ago
        Sure, I don't mean anyone willing to take the job, I mean anyone the board might reasonably select who has a good chance of success. Surely those people are out there. In that same time frame that Sundar was CEO and GOOG stock is up 240%, META is up 160%, NFLX is up 220%, AMZN is up 325%, AAPL is up 500%, and MSFT is up 600%. Surely these giant tech companies didn't all get lucky and get the only 5 people who could get great growth numbers from the stock market.
waynesonfire 3y ago
Salaries and hiring have been frozen since 2021.
slg 3y ago
This is worse from a corporate greed perspective because it is effectively saying that Microsoft can't afford to give out a pay raise to anyone. Meanwhile, they had a net income of $17.6 billion last quarter[1]. A layoff can at least be due to a change in direction or some departments, teams, or employees not delivering the necessary value to justify their continued employment. This is saying no one at Microsoft is delivering enough value to deserve a raise despite the company still being profitable. That is objectively not true. There are certainly people at Microsoft that deserve raises and the company can clearly pay for those raises with their billions in profit. There is no reason to do this other than Microsoft feels it can get away with it. [1] - https://www.microsoft.com/en-us/investor/earnings/fy-2023-q1/press-release-webcast https://www.microsoft.com/en-us/investor/earnings/fy-2023-q1...
- oh_sigh 3y ago
  The company and its income is for the benefit of the shareholders, not the employees. Maybe the argument can be made that they should pay more money to certain people to improve their future income, but that has nothing to do with how much money they make.
  - TensorPoint 3y ago
    Freezing salaries for all employees doesn't seem like a sustainable way to save money in the long run and the second order effects would probably destroy shareholder value not create it
    - danaris 3y ago
      Ah, but in the long run, they'll have already cashed out the shares or options they wanted to juice the value of, so who cares?
  - huijzer 3y ago
    Unhappy employees have a way of making shareholders unhappy in the long-term. Having said that, the decision probably involved more than the shareholders point of view.
burnished 3y ago
I think everyone agrees with that value statement, the problem seems to be that no one else is interpreting this announcement that way. You would need to expect that the companies future was at risk, whereas I think most people are expecting that this is nakedly squeezing and anticipate collusion from competitors. As I understand it there is a documented history of that already.
wintogreen74 3y ago
Why would you think it's a "one of" situation? In my experiences the company lays off X% AND cuts salaries YY%. This is quite effective because the subtext is "if you still have a job you're lucky". I suspect you actually get less attrition from both at the same time vs. just a pay cut or freeze.
Jagerbizzle 3y ago
It will likely be both. Why not have your cake and eat it too? Zuckerberg already set the precedent for an additional large round of layoffs after the first, so I'd be extremely surprised if Microsoft, Google, etc didn't follow suit.

Is it not better/preferable to freeze salaries than to cut more staff? From a morale PoV, from a human PoV, except maybe not from an individual PoV, overall.

by mc32 3y ago

Is it not better/preferable to freeze salaries than to cut more staff? From a morale PoV, from a human PoV, except maybe not from an individual PoV, overall.

onlyrealcuzzo 3y ago

It might be better if you didn't over hire. I can't speak for MSFT. But a lot of tech companies definitely hired to banana town. Cutting would be better than freezing salaries.

mc32 3y ago
Hiring gives someone experience they sought and presumably would not have had (else they might have kept put). So overhiring in some light does look bad, on the other hand it gives some people the necessary experience for their next step in their carrers.
- echelon 3y ago
  > So overhiring in some light does look bad, on the other hand it gives some people the necessary experience for their next step in their carrers. Not if they were let go before their first year, which has been the case at a lot of tech companies recently. New hires, juniors especially, need a lot of time to onboard. Lessons in the first weeks and months of a new job will be more about company-specific tooling and minutiae, not engineering in the broader scope. Portable lessons come later, usually after you've found your legs.
afavour 3y ago
> Cutting would be better than freezing salaries. Surely that depends on whether you're one of those getting cut or not.
geodel 3y ago
Yes a lot of companies hired a lot more. A lot of money also got distributed in this process which otherwise wouldn't have. Laid off employees got some work experience out of it. Better than nothing. I don't get this stuck up argument again and again Why did they hire before? As if there is some really great answer that can reveal itself by repeatedly asking this question. > Cutting would be better than freezing salaries. Many would like same or lower salary than being laid off. Those who looking for higher salaries can move on just like they always have.
- throw8383833jj 3y ago
  i thought the answer was Jack welch philosophy of management: always overhire and then prune 10% of your workforce every year. the theorey goes that way, you keep the best and loose the rest. But, that assumes that employees are interchangable like cogs which isn't true. plus, most companies aren't necessarily able to determine who's best and worst and may even end up laying off those who are better.
wintogreen74 3y ago
They hired with someone else's money though, now they're looking to cut when it's their own.

mirekrusin 3y ago

Would be better to cancel bonuses instead.

sidfthec 3y ago

> Is it not better/preferable to freeze salaries than to cut more staff? Hint: Neither is needed for most of these big tech companies.

mason55 3y ago
Large tech companies don't exist to serve as employment programs for software engineers. If they believe it will increase profits without longterm harm then layoffs/salary freezes are the right thing for them to do as a company even if they are wildly successful. Layoffs are frequently done when a company is struggling, so people seem to think it's incongruous for a company to do layoffs if they are doing well.
- sidfthec 3y ago
  > If they believe it will increase profits without longterm harm then layoffs/salary freezes are the right thing for them to do as a company even if they are wildly successful. And that doesn't need to be the case. Many of these multi-national big tech companies have failed to move forward with layoffs in some countries because of laws that protect workers. For example, in some countries, companies need to prove that they're struggling in order to lay people off.
DiggyJohnson 3y ago
Surely though if it’s in the companies interest to not keep certain staff on the payroll now (I.e.), that’s because they believe reducing headcount will make them a healthier company. A healthier company has more longevity, and a company with more longevity will hire more people in the long term than an inefficient or bloated company. I feel like your perspective does not take time horizons into account.

schainks 3y ago

Do not have mercy for a faceless corporation continually posting profits that grow quarter over quarter. They are rolling in money and could cut executive comp or something else, but choose not to.

nickpp 3y ago
Executives lost to competition due to cut comp are much harder to replace than regular workers. Sucks, but it’s the reality.
- oh_sigh 3y ago
  If, say, Sundar was only offered a $100M package instead of a $226M package, where would he go that would pay him more than $100M? There's no other person out there who would do the job for $100M? An issue would be that Sundar is plugged into Google and knows all the ins and outs and has the relationships that an outsider would take some time to learn/form, but on the same hand, Sundar going out into the wide world is then lacking those same things at his new company, meaning new companies might be as hesitant to hire him as Google would be to hire a new outsider CEO.
  - sokoloff 3y ago
    > There's no other person out there who would do the job for $100M? I'd be willing to do a terrible job at it for only $10M/yr. That's not what the shareholders want; they want Sundar to keep doing what is, from the shareholders' point of view, a quite respectable job, seeing the shares grow from $34 when he become CEO to $112 now for a CAGR of around 17%.
    - oh_sigh 3y ago
      Sure, I don't mean anyone willing to take the job, I mean anyone the board might reasonably select who has a good chance of success. Surely those people are out there. In that same time frame that Sundar was CEO and GOOG stock is up 240%, META is up 160%, NFLX is up 220%, AMZN is up 325%, AAPL is up 500%, and MSFT is up 600%. Surely these giant tech companies didn't all get lucky and get the only 5 people who could get great growth numbers from the stock market.

waynesonfire 3y ago

Salaries and hiring have been frozen since 2021.

slg 3y ago

This is worse from a corporate greed perspective because it is effectively saying that Microsoft can't afford to give out a pay raise to anyone. Meanwhile, they had a net income of $17.6 billion last quarter[1]. A layoff can at least be due to a change in direction or some departments, teams, or employees not delivering the necessary value to justify their continued employment. This is saying no one at Microsoft is delivering enough value to deserve a raise despite the company still being profitable. That is objectively not true. There are certainly people at Microsoft that deserve raises and the company can clearly pay for those raises with their billions in profit. There is no reason to do this other than Microsoft feels it can get away with it. [1] - https://www.microsoft.com/en-us/investor/earnings/fy-2023-q1/press-release-webcast https://www.microsoft.com/en-us/investor/earnings/fy-2023-q1...

oh_sigh 3y ago
The company and its income is for the benefit of the shareholders, not the employees. Maybe the argument can be made that they should pay more money to certain people to improve their future income, but that has nothing to do with how much money they make.
- TensorPoint 3y ago
  Freezing salaries for all employees doesn't seem like a sustainable way to save money in the long run and the second order effects would probably destroy shareholder value not create it
  - danaris 3y ago
    Ah, but in the long run, they'll have already cashed out the shares or options they wanted to juice the value of, so who cares?
- huijzer 3y ago
  Unhappy employees have a way of making shareholders unhappy in the long-term. Having said that, the decision probably involved more than the shareholders point of view.

burnished 3y ago

I think everyone agrees with that value statement, the problem seems to be that no one else is interpreting this announcement that way. You would need to expect that the companies future was at risk, whereas I think most people are expecting that this is nakedly squeezing and anticipate collusion from competitors. As I understand it there is a documented history of that already.

wintogreen74 3y ago

Why would you think it's a "one of" situation? In my experiences the company lays off X% AND cuts salaries YY%. This is quite effective because the subtext is "if you still have a job you're lucky". I suspect you actually get less attrition from both at the same time vs. just a pay cut or freeze.

Jagerbizzle 3y ago

It will likely be both. Why not have your cake and eat it too? Zuckerberg already set the precedent for an additional large round of layoffs after the first, so I'd be extremely surprised if Microsoft, Google, etc didn't follow suit.