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> "major wall st fund managers and stock holders started putting together a plan to put pressure on the wage and RSU growth" that's what i thought. another he

> "major wall st fund managers and stock holders started putting together a plan to put pressure on the wage and RSU growth" that's what i thought. another hedge fund douchebag sent a letter to google demanding it should cut back its workforce and lower pay around the same time: https://www.theguardian.com/technology/2022/nov/15/major-investor-calls-on-google-owner-to-aggressively-cut-staff-and-pay https://www.theguardian.com/technology/2022/nov/15/major-inv... they saw an opportunity to cut costs. the pandemic gave too much power to white collar wage workers and as churchill and later milton friedman said, never let a crisis go to waste.

draw_down 3y ago
[dead]
jklinger410 3y ago
The drive to cut staff was to push for a recession, and that was always clear. This same argument is being used to say wages or COVID relief are driving inflation. The argument about what is causing our current inflation is a battleground for class warfare. But we don't talk about things in that context in this country, because the war (and almost every single battle) is being won by the rich.
- boringg 3y ago
  I think you misunderstand. The reason people cut staff was fear of the upcoming recession as a result of the overnights rates going up. It still might happen as it is clear people are feeling the pinch of the rates. Your argument is a bit of a stretch. Class warfare is some strong rhetoric that I don't think many people have adopted.
  - burkaman 3y ago
    https://twitter.com/FinancialReview/status/1701440109948887057 https://twitter.com/FinancialReview/status/17014401099488870...
    - boringg 3y ago
      The reference point you are using is a CEO of an Australian physical space developer -- not someone who has any meaningful opinion that would be equivalent in the tech world. As well - as his business is development (like physical spaces) he is probably in a world of hurt with the interest rates absolutely killing the business model. Look at how much the real estate world and big developers have been crippled (I'm not saying you should feel bad for them - they took on that risk when they over levered themselves and reap what they sow). However I imagine because they are taking on losses their staff are going to feel the pain as are the investors (my speculation). My point is your reference is a bad one for the topic of the thread.
  - sdenton4 3y ago
    Unfortunately, only a few people - the hedge fund folks - need to adopt class warfare for it to be a reality. There's piles of evidence that companies have been using the fears of recession and cover of inflation to increase prices simply to pad profit margins by increasing prices and lasting people off. That's the rich fucking over the poor and the working classes; or, as some might call it, class warfare.
    - RandomLensman 3y ago
      That is really not how these things tend unfold within a corporation. There will be pitches to executives around how to price better, cut costs, strengthening in recession etc. - all designed to increase the firms objective function and then things will be actioned. It's like some weird AI.
      - sdenton4 3y ago
        We looked at our baked products line and found that we could increase shareholder value by improving the pricing model on our lowest-tier offering. Anyone who doesn't like it will have the option of engaging with our higher-tier offering, whose prices will remain unchanged.
  - Fauntleroy 3y ago
    Avoiding the "rhetoric" doesn't make the current class war any less real. The numbers paint an extremely bleak picture.
- sokoloff 3y ago
  > [argument is] COVID relief are driving inflation If you have a supply chain disruption limiting the supply of raw materials or finished goods to get into the market, and you increase the supply of money in consumers' hands without any corresponding increase in supply of goods/services, I wouldn't expect anything other than an increase in inflation. I'm not saying that it shouldn't have been done, but to say it was done and didn't contribute significantly to inflation seems extremely unlikely to be correct.
  - readthenotes1 3y ago
    Don't forget get the suspension of student loan repayments. Apparently most of that money went to entertainment, travel, etc., Not for any long-term life improvement (which is kinda in line with the insanity of the student loan business model)
    - EdwardDiego 3y ago
      > Apparently most of that money went to entertainment, travel, etc. Do you have anything I can read on this?
  - marcosdumay 3y ago
    > the supply of money in consumers' hands People are not exclusively consumers and stockpiling is a dynamic thing. If the government is actively stopping goods production from increasing, the prices raising is a good default assumption. But it's not an universal consequence. But anyway, the inflation spike happened much after the government stopped intervening and production of everything was already increasing quite quickly. But the main argument people use for that is that the COVID relief (and all the money going to workers) was tiny and irrelevant when compared to the direct interventions of the US government on its economy at the time, that had the explicit intent of creating inflation.
- lumost 3y ago
  IMO the US and many other developed countries are now carrying a large structural imbalance between the upper and middle/lower wealth brackets. This will either be corrected by new growth, or zero-sum rebalancing via inflation. Currently most growth is captured via capital holders, and this is unlikely to change. Leaving the zero-sum options as the most likely outcome. The current structure doesn’t appear sustainable. As a millennial parent, I’m starting to observe the majority of the people I know skip having children or stick to one. The common reason is that the costs of children and pressure of career are too much. Eventually, you get too old to have children.
  - jcfrei 3y ago
    What makes you think this should rebalance on its own? Historically - with the exception of the last ca. 80 years - these imbalances have been the norm. The idea that a person can climb the social ladder through labor is a very new one and I doubt it's going to stay around. Historically wealth and its returns have been inherited and wide-spread rebalancing only occurred during crises, wars or the occasional technological revolution.
    - benterix 3y ago
      > wide-spread rebalancing only occurred during crises, wars or the occasional technological revolution. Not only technological.
      - red-iron-pine 3y ago
        not to put too fine a point on it but... > Not only technological. they mean violent. something that the bourgeoisie HN types need to keep in mind.
        jcfrei 3y ago
        Violent revolutions are very rare and nowadays only happen if a significant part of the military takes part. Historically there was a short window of time when revolutions were likely to succeed; after the invention of the printing press and when reading became somewhat common (which allowed for the organization of a revolution) and basically up until the invention of tanks. After that any financially stable regime that maintains leadership of the army can in 99% of the cases suppress any revolutionary attempts. The gap in firepower between an armed militia (with rifles) and a modern military with drones, jets, MLRS, tanks, artillery etc. is simply too large.
- andrei_says_ 3y ago
  Also, they win the war of framing issues, which automatically wins the war by setting context and reality. Owning most / the loudest media outlets is a guarantee for this. Whoever frames the issue, wins. Defining people’s refusal to accept starvation wages as “nobody wants to work” is an example. See the work of George Lakoff on framing for details. His Framelab podcast is excellent.
  - red-iron-pine 3y ago
    as they say in the political realm "perception is reality"
  - varelse 3y ago
    [dead]
matwood 3y ago
There have been questions and jokes for years wondering what all the people are doing at big tech firms - and then they hired like crazy during the pandemic. Eventually shareholders would start wondering the same thing, and push for cuts. Does Google need to employ people to make another chat app that they'll soon kill?
jwestbury 3y ago
> the pandemic gave too much power to white collar wage workers It's quite interesting to look at job listings right now. Go have a look at some tech companies, and compare job types which currently allow remote work. You'll find that there are plenty of places offering remote work for most roles... but not for engineering. How interesting. I'm sure it's not an concerted effort to get us back under control.
- markhalonen 3y ago
  I would say Elon cutting 80% of Twitter to no real consequence is the real driver. Everyone is asking "are we Twitter 1.0?" Edit: actually increased engineering velocity
  - airstrike 3y ago
    agreed that's the driver—I've heard as much from a couple people the jury is still out on the "no real consequence" piece, however managers seem to ignore the fact that Twitter is private, so who knows how bad it's really doing these days
    - happymellon 3y ago
      This is key. No observable impact. Until the whole thing implodes.
      - markhalonen 3y ago
        Elon's algo is to push hard enough such that consequences are observed, then pull back a little. In twitter's case, moving an entire data center over christmas break was a too fast.
      - ryandrake 3y ago
        Twitter seems to be at that point where Wile-E-Coyote has already run off the cliff and is still treading thin air. Airplanes can glide a great distance even after the engine has been turned off. I'd be willing to bet Twitter is basically gliding now that all that staff that powered the engine is gone.
georgeburdell 3y ago
My interpretation is one of “good cop bad cop”. Something similar happened to my employer but it was some activist investor demanding changes that sounded similar to what the company had been rumored to be wanting to do (but were difficult/unpopular). Then within a month the current CEO is fired and a new CEO, who was from the outside and I know had been courted for a while, joins, and begins implementing many of those rumored plans.
bane 3y ago
What is kind of bizarre is that big-tech companies recruit largely based on their brand image, not purely on high-pay. They receive so many applications per month that even if they just lowballed incoming college-grads, the ones that choose to take the job rather than go to a competitor would still be perfectly fine. Deal with the rest through normal attrition and in a few years you solve your wage/RSU problem. This is how smaller and less famous companies do it. Yet why risk having to stir up some kind of illegal price fixing or collusion nonsense as a hedge fund manager? My guess is that the paradox is solved if you consider the saved cost of compensation vs the cost of litigation. Proof point: Microsoft, Apple, and Amazon doesn't pay nearly as much as Google or Facebook in terms of total comp, yet they have no problem finding employees.
- sitkack 3y ago
  > yet they have no problem finding employees. Citation needed. I know Google has a problem finding people fast enough.
  - tivert 3y ago
    > Citation needed. I know Google has a problem finding people fast enough. Could that be Google's cultural problem? I have not real knowledge or understanding of this, but I was under the vague impression Google is unusually picky and elitist about who it hires (e.g. they want advanced degrees, an elite school background, or a FAANG background, and will turn up their nose at most normal folks).
    - kuchenbecker 3y ago
      Caveat: hopefully my experience was a fluke and if I was to repeat it I would get a different outcome. I wouldn't want to judge them based on a single experience. My last round of interviews they down leveled me, yet I had a lateral offer from Waymo, and other companies upleveled me. I was interviewing for a specific role, but my interviewers were from areas around the company that gave interview questions relevant to their area but not the area I was interviewing for, and was well outside my expertise. I objectively didn't do as well as other interviews. Waymo, on the other hand stuck to my strengths in the interview process and was genuinely engaged with me finding a role there that Met my skills (I very regretfully turned the role down).
RandomLensman 3y ago
Cost cutting is pretty effective from a profit and shareholder perspective, so, yes, always a lever for corporations (pandemic or not).
coredog64 3y ago
There’s some nuance to the RSU situation. The problem that Microsoft (and Amazon) faced with the equity portion of comp was dilution. Declining revenue with large outstanding stock grants leads to a massive EPS hit. That tanks your stock price, requiring more RSUs, rinse and repeat.

draw_down 3y ago

[dead]

jklinger410 3y ago

The drive to cut staff was to push for a recession, and that was always clear. This same argument is being used to say wages or COVID relief are driving inflation. The argument about what is causing our current inflation is a battleground for class warfare. But we don't talk about things in that context in this country, because the war (and almost every single battle) is being won by the rich.

boringg 3y ago
I think you misunderstand. The reason people cut staff was fear of the upcoming recession as a result of the overnights rates going up. It still might happen as it is clear people are feeling the pinch of the rates. Your argument is a bit of a stretch. Class warfare is some strong rhetoric that I don't think many people have adopted.
- burkaman 3y ago
  https://twitter.com/FinancialReview/status/1701440109948887057 https://twitter.com/FinancialReview/status/17014401099488870...
  - boringg 3y ago
    The reference point you are using is a CEO of an Australian physical space developer -- not someone who has any meaningful opinion that would be equivalent in the tech world. As well - as his business is development (like physical spaces) he is probably in a world of hurt with the interest rates absolutely killing the business model. Look at how much the real estate world and big developers have been crippled (I'm not saying you should feel bad for them - they took on that risk when they over levered themselves and reap what they sow). However I imagine because they are taking on losses their staff are going to feel the pain as are the investors (my speculation). My point is your reference is a bad one for the topic of the thread.
- sdenton4 3y ago
  Unfortunately, only a few people - the hedge fund folks - need to adopt class warfare for it to be a reality. There's piles of evidence that companies have been using the fears of recession and cover of inflation to increase prices simply to pad profit margins by increasing prices and lasting people off. That's the rich fucking over the poor and the working classes; or, as some might call it, class warfare.
  - RandomLensman 3y ago
    That is really not how these things tend unfold within a corporation. There will be pitches to executives around how to price better, cut costs, strengthening in recession etc. - all designed to increase the firms objective function and then things will be actioned. It's like some weird AI.
    - sdenton4 3y ago
      We looked at our baked products line and found that we could increase shareholder value by improving the pricing model on our lowest-tier offering. Anyone who doesn't like it will have the option of engaging with our higher-tier offering, whose prices will remain unchanged.
- Fauntleroy 3y ago
  Avoiding the "rhetoric" doesn't make the current class war any less real. The numbers paint an extremely bleak picture.
sokoloff 3y ago
> [argument is] COVID relief are driving inflation If you have a supply chain disruption limiting the supply of raw materials or finished goods to get into the market, and you increase the supply of money in consumers' hands without any corresponding increase in supply of goods/services, I wouldn't expect anything other than an increase in inflation. I'm not saying that it shouldn't have been done, but to say it was done and didn't contribute significantly to inflation seems extremely unlikely to be correct.
- readthenotes1 3y ago
  Don't forget get the suspension of student loan repayments. Apparently most of that money went to entertainment, travel, etc., Not for any long-term life improvement (which is kinda in line with the insanity of the student loan business model)
  - EdwardDiego 3y ago
    > Apparently most of that money went to entertainment, travel, etc. Do you have anything I can read on this?
- marcosdumay 3y ago
  > the supply of money in consumers' hands People are not exclusively consumers and stockpiling is a dynamic thing. If the government is actively stopping goods production from increasing, the prices raising is a good default assumption. But it's not an universal consequence. But anyway, the inflation spike happened much after the government stopped intervening and production of everything was already increasing quite quickly. But the main argument people use for that is that the COVID relief (and all the money going to workers) was tiny and irrelevant when compared to the direct interventions of the US government on its economy at the time, that had the explicit intent of creating inflation.
lumost 3y ago
IMO the US and many other developed countries are now carrying a large structural imbalance between the upper and middle/lower wealth brackets. This will either be corrected by new growth, or zero-sum rebalancing via inflation. Currently most growth is captured via capital holders, and this is unlikely to change. Leaving the zero-sum options as the most likely outcome. The current structure doesn’t appear sustainable. As a millennial parent, I’m starting to observe the majority of the people I know skip having children or stick to one. The common reason is that the costs of children and pressure of career are too much. Eventually, you get too old to have children.
- jcfrei 3y ago
  What makes you think this should rebalance on its own? Historically - with the exception of the last ca. 80 years - these imbalances have been the norm. The idea that a person can climb the social ladder through labor is a very new one and I doubt it's going to stay around. Historically wealth and its returns have been inherited and wide-spread rebalancing only occurred during crises, wars or the occasional technological revolution.
  - benterix 3y ago
    > wide-spread rebalancing only occurred during crises, wars or the occasional technological revolution. Not only technological.
    - red-iron-pine 3y ago
      not to put too fine a point on it but... > Not only technological. they mean violent. something that the bourgeoisie HN types need to keep in mind.
      - jcfrei 3y ago
        Violent revolutions are very rare and nowadays only happen if a significant part of the military takes part. Historically there was a short window of time when revolutions were likely to succeed; after the invention of the printing press and when reading became somewhat common (which allowed for the organization of a revolution) and basically up until the invention of tanks. After that any financially stable regime that maintains leadership of the army can in 99% of the cases suppress any revolutionary attempts. The gap in firepower between an armed militia (with rifles) and a modern military with drones, jets, MLRS, tanks, artillery etc. is simply too large.
andrei_says_ 3y ago
Also, they win the war of framing issues, which automatically wins the war by setting context and reality. Owning most / the loudest media outlets is a guarantee for this. Whoever frames the issue, wins. Defining people’s refusal to accept starvation wages as “nobody wants to work” is an example. See the work of George Lakoff on framing for details. His Framelab podcast is excellent.
- red-iron-pine 3y ago
  as they say in the political realm "perception is reality"
- varelse 3y ago
  [dead]

matwood 3y ago

There have been questions and jokes for years wondering what all the people are doing at big tech firms - and then they hired like crazy during the pandemic. Eventually shareholders would start wondering the same thing, and push for cuts. Does Google need to employ people to make another chat app that they'll soon kill?

jwestbury 3y ago

> the pandemic gave too much power to white collar wage workers It's quite interesting to look at job listings right now. Go have a look at some tech companies, and compare job types which currently allow remote work. You'll find that there are plenty of places offering remote work for most roles... but not for engineering. How interesting. I'm sure it's not an concerted effort to get us back under control.

markhalonen 3y ago
I would say Elon cutting 80% of Twitter to no real consequence is the real driver. Everyone is asking "are we Twitter 1.0?" Edit: actually increased engineering velocity
- airstrike 3y ago
  agreed that's the driver—I've heard as much from a couple people the jury is still out on the "no real consequence" piece, however managers seem to ignore the fact that Twitter is private, so who knows how bad it's really doing these days
  - happymellon 3y ago
    This is key. No observable impact. Until the whole thing implodes.
    - markhalonen 3y ago
      Elon's algo is to push hard enough such that consequences are observed, then pull back a little. In twitter's case, moving an entire data center over christmas break was a too fast.
    - ryandrake 3y ago
      Twitter seems to be at that point where Wile-E-Coyote has already run off the cliff and is still treading thin air. Airplanes can glide a great distance even after the engine has been turned off. I'd be willing to bet Twitter is basically gliding now that all that staff that powered the engine is gone.

georgeburdell 3y ago

My interpretation is one of “good cop bad cop”. Something similar happened to my employer but it was some activist investor demanding changes that sounded similar to what the company had been rumored to be wanting to do (but were difficult/unpopular). Then within a month the current CEO is fired and a new CEO, who was from the outside and I know had been courted for a while, joins, and begins implementing many of those rumored plans.

bane 3y ago

What is kind of bizarre is that big-tech companies recruit largely based on their brand image, not purely on high-pay. They receive so many applications per month that even if they just lowballed incoming college-grads, the ones that choose to take the job rather than go to a competitor would still be perfectly fine. Deal with the rest through normal attrition and in a few years you solve your wage/RSU problem. This is how smaller and less famous companies do it. Yet why risk having to stir up some kind of illegal price fixing or collusion nonsense as a hedge fund manager? My guess is that the paradox is solved if you consider the saved cost of compensation vs the cost of litigation. Proof point: Microsoft, Apple, and Amazon doesn't pay nearly as much as Google or Facebook in terms of total comp, yet they have no problem finding employees.

sitkack 3y ago
> yet they have no problem finding employees. Citation needed. I know Google has a problem finding people fast enough.
- tivert 3y ago
  > Citation needed. I know Google has a problem finding people fast enough. Could that be Google's cultural problem? I have not real knowledge or understanding of this, but I was under the vague impression Google is unusually picky and elitist about who it hires (e.g. they want advanced degrees, an elite school background, or a FAANG background, and will turn up their nose at most normal folks).
  - kuchenbecker 3y ago
    Caveat: hopefully my experience was a fluke and if I was to repeat it I would get a different outcome. I wouldn't want to judge them based on a single experience. My last round of interviews they down leveled me, yet I had a lateral offer from Waymo, and other companies upleveled me. I was interviewing for a specific role, but my interviewers were from areas around the company that gave interview questions relevant to their area but not the area I was interviewing for, and was well outside my expertise. I objectively didn't do as well as other interviews. Waymo, on the other hand stuck to my strengths in the interview process and was genuinely engaged with me finding a role there that Met my skills (I very regretfully turned the role down).

RandomLensman 3y ago

Cost cutting is pretty effective from a profit and shareholder perspective, so, yes, always a lever for corporations (pandemic or not).

coredog64 3y ago

There’s some nuance to the RSU situation. The problem that Microsoft (and Amazon) faced with the equity portion of comp was dilution. Declining revenue with large outstanding stock grants leads to a massive EPS hit. That tanks your stock price, requiring more RSUs, rinse and repeat.