6 ms·

I wonder if this is related to the class action that is just now finally going through the submission phase for people: https://www.ftc.gov/news-events/news/pre

I wonder if this is related to the class action that is just now finally going through the submission phase for people: https://www.ftc.gov/news-events/news/press-releases/2023/03/ftc-finalizes-order-requiring-fortnite-maker-epic-games-pay-245-million-tricking-users-making https://www.ftc.gov/news-events/news/press-releases/2023/03/...

jsnell 3y ago
No, those kinds of one-off events don't cause an otherwise profitable company to lay off people.
- staticautomatic 3y ago
  There are certainly situations where an adverse result in a lawsuit can lead to layoffs despite being a “one-off event”. I’ve worked on at least a few that were genuine “bet the company” cases. But a $245M loss is typically not in the ballpark for a big company. To trigger layoffs you usually need to be talking about billions or injunctions.
  - bpiche 3y ago
    The total is more like 500mm. If I recall, it was 250mm for refunds, and 250mm in penalties. It's a large amount of $$$ Edit: to be clear, it's the largest fine the FTC has ever imposed, it is a historically large amount of $$$
- giantg2 3y ago
  Sure it can. If the executives want to hit their performance bonuses they might start axing lower revenue projects or support groups. In a higher rate environment, it's certainly possible that the decision is made to lay people off to reduce the higher cost debt that needs to be incurred or the time it will take to pay it off, even if the company is otherwise profitable.not saying that's the case here though. Of course there are other likely causes of layoffs, like a downturn in industry forecast for particular types of games, their next product didn't test well (or can't charge what they wanted), etc.
  - JumpCrisscross 3y ago
    > If the executives want to hit their performance bonuses they might start axing lower revenue projects or support groups This is not a reaction to an FTC case.
    - giantg2 3y ago
      It is if the settlement affects their finances.
  - lesuorac 3y ago
    IIUC, Epic Games is private so they only need to convince Tim not to ax their bonuses and not the wider stock market. Although I mean if you're the executive overseeing the devision where users got overcharged perhaps your bonus did deserve to be ax'd.
    - giantg2 3y ago
      Even at private companies the performance targets/bonuses are set in the contract, no? Yeah, if you were the cause of the suit, then you definitely shouldn't be getting anything.
      - JumpCrisscross 3y ago
        > Even at private companies the performance targets/bonuses are set in the contract, no? For senior management? Usually not. If you hit it out of the park, the Board rewards you at its discretion. It isn’t until a company is mature enough that even senior managers don’t meaningfully affect the whole that performance targets are worth drafting. (Executives on performance targets early are a red flag.) > if you were the cause of the suit, then you definitely shouldn't be getting anything Sunk cost. Question is going-forward risk and return potential.
        giantg2 3y ago
        "Sunk cost. Question is going-forward risk and return potential." Basically the only way people evaluate you is pn past performance. If you made a bad judgement call resulting in these sorts of penalties, you're likely out. "For senior management?" For executives.

jsnell 3y ago

No, those kinds of one-off events don't cause an otherwise profitable company to lay off people.

staticautomatic 3y ago
There are certainly situations where an adverse result in a lawsuit can lead to layoffs despite being a “one-off event”. I’ve worked on at least a few that were genuine “bet the company” cases. But a $245M loss is typically not in the ballpark for a big company. To trigger layoffs you usually need to be talking about billions or injunctions.
- bpiche 3y ago
  The total is more like 500mm. If I recall, it was 250mm for refunds, and 250mm in penalties. It's a large amount of $$$ Edit: to be clear, it's the largest fine the FTC has ever imposed, it is a historically large amount of $$$
giantg2 3y ago
Sure it can. If the executives want to hit their performance bonuses they might start axing lower revenue projects or support groups. In a higher rate environment, it's certainly possible that the decision is made to lay people off to reduce the higher cost debt that needs to be incurred or the time it will take to pay it off, even if the company is otherwise profitable.not saying that's the case here though. Of course there are other likely causes of layoffs, like a downturn in industry forecast for particular types of games, their next product didn't test well (or can't charge what they wanted), etc.
- JumpCrisscross 3y ago
  > If the executives want to hit their performance bonuses they might start axing lower revenue projects or support groups This is not a reaction to an FTC case.
  - giantg2 3y ago
    It is if the settlement affects their finances.
- lesuorac 3y ago
  IIUC, Epic Games is private so they only need to convince Tim not to ax their bonuses and not the wider stock market. Although I mean if you're the executive overseeing the devision where users got overcharged perhaps your bonus did deserve to be ax'd.
  - giantg2 3y ago
    Even at private companies the performance targets/bonuses are set in the contract, no? Yeah, if you were the cause of the suit, then you definitely shouldn't be getting anything.
    - JumpCrisscross 3y ago
      > Even at private companies the performance targets/bonuses are set in the contract, no? For senior management? Usually not. If you hit it out of the park, the Board rewards you at its discretion. It isn’t until a company is mature enough that even senior managers don’t meaningfully affect the whole that performance targets are worth drafting. (Executives on performance targets early are a red flag.) > if you were the cause of the suit, then you definitely shouldn't be getting anything Sunk cost. Question is going-forward risk and return potential.
      - giantg2 3y ago
        "Sunk cost. Question is going-forward risk and return potential." Basically the only way people evaluate you is pn past performance. If you made a bad judgement call resulting in these sorts of penalties, you're likely out. "For senior management?" For executives.