6 ms·

"As I just shared on our call, I think the world of you." Just not enough to offer any severance or healthcare. #TruckYeah!

by faefox 3y ago

fourseventy 3y ago
The company is shutting down because they ran out of money... where do you think this magical severance pay is going to come from?
- toomuchtodo 3y ago
  Good management manages the treasury so those funds are available during a wind down. If you run out of runway and the bank account is empty, with nothing to provide workers who are getting term'd, you fucked up. (have co-owned a business where we made folks whole for pay the owner skipped out on during the failure, asset acquisition, and their onboarding with us; plan ahead and you can do the right thing, fail to plan and people will experience pain; you're not saving the business while burning through the severance allocation, you're just lying to yourself that the business isn't already dead)
  - ghaff 3y ago
    OTOH, I worked for a very small company during dot-bomb that cut salaries and the principals took no pay for a bit but came out the other side--for a decent number of years. Not sure I'd have been better off had they done a "Whelp. We did our best" a few months earlier. As you get larger, decisions obviously have longer runways.
    - belthesar 3y ago
      There's always risk/reward evaluations that are made when in these situations. A handful of stories are being tossed around of examples where business owners ran the business to the redline, and then somehow pulled a rabbit out of a hat. These stories ignore that the significant majority of businesses fail. As an point of principal, is it better to bet on being the unicorn rarely, or to be the leader that takes responsibility for their employees consistently?
      - renewiltord 3y ago
        If I’m going to work at a startup, I want to know that the founders are going to aim for the stars. If they’re going to throw in the towel like this, I’d opt out. The incentive isn’t there with guys who don’t have any balls. What am I going to do with one more year of pay. Absolute pittance. People who are going to do this should be upfront that they are ball-less.
  - JumpCrisscross 3y ago
    > Good management manages the treasury so those funds are available during a wind down Given Convoy's margins and operational leverage, I'm not sure it was this simple. Legacy freight brokers who have been doing this a long time are being caught surprised. They may have thought they had months of runway that rapidly collapsed to weeks. We need stronger unemployment benefits. Barring a public solution, severance ensconced in employment contracts is next best. Convoy had nine figures of debt. Depending on the covenants, it may not have been able to hadn't over cash at windows to employees in the form of a novel severance package.
    - psunavy03 3y ago
      > Legacy freight brokers who have been doing this a long time are being caught surprised. They may have thought they had months of runway that rapidly collapsed to weeks. There's at least one major US freight forwarder who has been in business for over 40 years and who has never done a layoff, not in 2008, not in COVID, and not now. They're not perfect and have other flaws (like every other company everywhere), but still.
  - singleshot_ 3y ago
    If you run a company and you’re running out of money and you owe any secured creditors any money, and as the last act of the company, you pay all your employees a bonus so they can buy health insurance, you’ll find that in bankruptcy this might become a preferential transfer or a fraudulent transfer which will be clawed back by the creditors with priority.
- calabin 3y ago
  They probably should've called the game a bit earlier - or at least significantly cut things back
- muzz 3y ago
  Even if they mismanaged their cash to this extent, sometimes the VCs step up with the cash for this as a goodwill gesture.
- bart_spoon 3y ago
  If things are so dire today that they have no money and must shutdown immediately, they were dead in the water 6-8 weeks ago anyways. The company isn’t going to be miraculously saved during that time, so just take the cash you used to pay your employees to rearrange chairs on the sinking ship, call it 2 months early, and pay out their severance/health care during that time while they look for new jobs.
  - ska 3y ago
    > they were dead in the water 6-8 weeks ago anyways. That's an extremely short horizon. Normally it's more than a quarter out, at least.
  - pxx 3y ago
    The company can certainly be saved in a period of months. FedEx supposedly had less than a week of jet fuel opex remaining when the founder decided to try to win the missing money by gambling. https://www.google.com/amp/s/www.businessinsider.com/fedex-saved-from-bankruptcy-with-blackjack-winnings-2014-7%3famp https://www.google.com/amp/s/www.businessinsider.com/fedex-s...
    - rootsudo 3y ago
      Yes, the bet it all on black and see if Lady Luck is on your side hope. What if they did and lost it all 6 weeks ago? What would that signal instead?
    - BobaFloutist 3y ago
      "It worked once" is a very results oriented approach. If you look only at people who won the lottery, you'd have to be an idiot not to spend all your money on lottery tickets. How many times has someone done this and lost all their money, screwed over thousands of people, and never been heard of again? We don't know, because they aren't famous, but my suspicion is it's a much more common outcome.
    - FireBeyond 3y ago
      Oh, let's not pat Fred Smith on the back for his grit and determination here. FedEx was already shafting their pilots for months before this. Bounced paychecks, pilots paying for jet fuel on personal credit cards, and more. If I was a pilot there, I'd have said "Fuck you, Fred", even though he won. How sociopathic do you have to be to gamble company money (sorry, isn't that a felony?) while bouncing paychecks? And yet you'll still have people here applauding your hustler mentality, apparently.
- tshaddox 3y ago
  Are you suggesting they would also not pay out the final payroll, because of course they would never shut down unless they had literally used their last dollar?
- ska 3y ago
  Except in very rare circumstances, management team knows this is going to happen well before passing the threshold where this isn't possible. So it's a (common) choice. They are balancing the +/- against other uses of the last bits of cash. To some degree they do it because the employee pool accepts and expects it, no better reason. If the representational damage was more acute, they might choose someone else to disappoint. The more common problem is a "hail mary" play, where the management team is perhaps fooling themselves about the probability of success. I think the ethical thing to do there is discuss it with employees, but that's just me.
- the_optimist 3y ago
  Perhaps conscript some doctors and pharmaceutical manufacturers under penalty of fine or imprisonment. Don’t let them go until they provide the health care we each and all deserve.

"As I just shared on our call, I think the world of you." Just not enough to offer any severance or healthcare. #TruckYeah!

by faefox 3y ago

"As I just shared on our call, I think the world of you." Just not enough to offer any severance or healthcare. #TruckYeah!

fourseventy 3y ago

The company is shutting down because they ran out of money... where do you think this magical severance pay is going to come from?

toomuchtodo 3y ago
Good management manages the treasury so those funds are available during a wind down. If you run out of runway and the bank account is empty, with nothing to provide workers who are getting term'd, you fucked up. (have co-owned a business where we made folks whole for pay the owner skipped out on during the failure, asset acquisition, and their onboarding with us; plan ahead and you can do the right thing, fail to plan and people will experience pain; you're not saving the business while burning through the severance allocation, you're just lying to yourself that the business isn't already dead)
- ghaff 3y ago
  OTOH, I worked for a very small company during dot-bomb that cut salaries and the principals took no pay for a bit but came out the other side--for a decent number of years. Not sure I'd have been better off had they done a "Whelp. We did our best" a few months earlier. As you get larger, decisions obviously have longer runways.
  - belthesar 3y ago
    There's always risk/reward evaluations that are made when in these situations. A handful of stories are being tossed around of examples where business owners ran the business to the redline, and then somehow pulled a rabbit out of a hat. These stories ignore that the significant majority of businesses fail. As an point of principal, is it better to bet on being the unicorn rarely, or to be the leader that takes responsibility for their employees consistently?
    - renewiltord 3y ago
      If I’m going to work at a startup, I want to know that the founders are going to aim for the stars. If they’re going to throw in the towel like this, I’d opt out. The incentive isn’t there with guys who don’t have any balls. What am I going to do with one more year of pay. Absolute pittance. People who are going to do this should be upfront that they are ball-less.
- JumpCrisscross 3y ago
  > Good management manages the treasury so those funds are available during a wind down Given Convoy's margins and operational leverage, I'm not sure it was this simple. Legacy freight brokers who have been doing this a long time are being caught surprised. They may have thought they had months of runway that rapidly collapsed to weeks. We need stronger unemployment benefits. Barring a public solution, severance ensconced in employment contracts is next best. Convoy had nine figures of debt. Depending on the covenants, it may not have been able to hadn't over cash at windows to employees in the form of a novel severance package.
  - psunavy03 3y ago
    > Legacy freight brokers who have been doing this a long time are being caught surprised. They may have thought they had months of runway that rapidly collapsed to weeks. There's at least one major US freight forwarder who has been in business for over 40 years and who has never done a layoff, not in 2008, not in COVID, and not now. They're not perfect and have other flaws (like every other company everywhere), but still.
- singleshot_ 3y ago
  If you run a company and you’re running out of money and you owe any secured creditors any money, and as the last act of the company, you pay all your employees a bonus so they can buy health insurance, you’ll find that in bankruptcy this might become a preferential transfer or a fraudulent transfer which will be clawed back by the creditors with priority.
calabin 3y ago
They probably should've called the game a bit earlier - or at least significantly cut things back
muzz 3y ago
Even if they mismanaged their cash to this extent, sometimes the VCs step up with the cash for this as a goodwill gesture.
bart_spoon 3y ago
If things are so dire today that they have no money and must shutdown immediately, they were dead in the water 6-8 weeks ago anyways. The company isn’t going to be miraculously saved during that time, so just take the cash you used to pay your employees to rearrange chairs on the sinking ship, call it 2 months early, and pay out their severance/health care during that time while they look for new jobs.
- ska 3y ago
  > they were dead in the water 6-8 weeks ago anyways. That's an extremely short horizon. Normally it's more than a quarter out, at least.
- pxx 3y ago
  The company can certainly be saved in a period of months. FedEx supposedly had less than a week of jet fuel opex remaining when the founder decided to try to win the missing money by gambling. https://www.google.com/amp/s/www.businessinsider.com/fedex-saved-from-bankruptcy-with-blackjack-winnings-2014-7%3famp https://www.google.com/amp/s/www.businessinsider.com/fedex-s...
  - rootsudo 3y ago
    Yes, the bet it all on black and see if Lady Luck is on your side hope. What if they did and lost it all 6 weeks ago? What would that signal instead?
  - BobaFloutist 3y ago
    "It worked once" is a very results oriented approach. If you look only at people who won the lottery, you'd have to be an idiot not to spend all your money on lottery tickets. How many times has someone done this and lost all their money, screwed over thousands of people, and never been heard of again? We don't know, because they aren't famous, but my suspicion is it's a much more common outcome.
  - FireBeyond 3y ago
    Oh, let's not pat Fred Smith on the back for his grit and determination here. FedEx was already shafting their pilots for months before this. Bounced paychecks, pilots paying for jet fuel on personal credit cards, and more. If I was a pilot there, I'd have said "Fuck you, Fred", even though he won. How sociopathic do you have to be to gamble company money (sorry, isn't that a felony?) while bouncing paychecks? And yet you'll still have people here applauding your hustler mentality, apparently.
tshaddox 3y ago
Are you suggesting they would also not pay out the final payroll, because of course they would never shut down unless they had literally used their last dollar?
ska 3y ago
Except in very rare circumstances, management team knows this is going to happen well before passing the threshold where this isn't possible. So it's a (common) choice. They are balancing the +/- against other uses of the last bits of cash. To some degree they do it because the employee pool accepts and expects it, no better reason. If the representational damage was more acute, they might choose someone else to disappoint. The more common problem is a "hail mary" play, where the management team is perhaps fooling themselves about the probability of success. I think the ethical thing to do there is discuss it with employees, but that's just me.
the_optimist 3y ago
Perhaps conscript some doctors and pharmaceutical manufacturers under penalty of fine or imprisonment. Don’t let them go until they provide the health care we each and all deserve.