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Ex-Convoy employee here: if a company is shutting down, it obviously can't provide severance. It's not a matter of class or not.
by benced 3y ago
Ex-Convoy employee here: if a company is shutting down, it obviously can't provide severance. It's not a matter of class or not.
- bart_spoon 3y agoIf things are dire enough to close up shop now, they probably were dire enough to close up shop 2 months ago, and you can use the cash to give your employees some runway for finding new employment.
- poorbutdebtfree 3y ago[dead]
- adastra22 3y agoA startup will never survive long enough to close the next round with that logic.
- bart_spoon 3y agoOf course they will. What is the magic that separates success from failure that apparently only magically appears within the last 4 weeks with operating capital in the bank? Move your time tables up by 4-8 weeks, including funding raises and closing operations, and none of this is an issue.
- adastra22 3y agoAccording to what’s been said, they were chasing opportunities that they thought would finalize within that timeframe. 4-6 weeks ago they had good leads for closing a deal in 4-6 weeks. None of those happened to pan out this time, but every startup has been at a point like this where runway is coming up short. This is normal and expected operating conditions.
- sroussey 3y agoNo, when you are in the fog of war/fundraising, it can be very difficult to decide between 100% let everyone go, verse some other percent where everyone keeps their jobs. Very much depends on the circumstances. If no one was picking up their calls and it was obvious, then sure. Not much is really that clear though. In my tiny case a while back, I wiped my liquid savings to get me employees some time. Can't do that with over a thousand employees though!
- avalys 3y agoIf you can still operate the business for another 8 weeks, there's a chance that things will still work out, and it's pretty pessimistic to preemptively shut it down because you assume you're going to fail. Pessimists don't generally find themselves in the role of founder/CEO of a startup in the first place.
- arrosenberg 3y agoActually good founders and CEOs do tend to be realists. They know when to hold and when to fold, and they place a high value the well being of the people especially when things go poorly. Manic founders who insist that a rescue will come right up until the last second often leave people feeling burned and don't get as many second chances when things don't go well.
- ska 3y ago> there's a chance that things will still work out, There is a big difference between a less than 1% chance and an 80% chance here. Part of the job is knowing that difference, and how to handle/communicate it.
- pc86 3y agoEspecially when you're only doing it so you can pay your employees 8 weeks' severance when the alternative is 6 or 8 weeks' pay while working.
- mhandley 3y agoExactly that magic happened with our startup last year.
- michaelt 3y ago> What is the magic that separates success from failure that apparently only magically appears within the last 4 weeks with operating capital in the bank? I've heard it said that every boss of a failed company will tell you that they almost got a last minute investment, or almost made a big sale, or almost got acquired, if they'd only had an extra week or two it'd have all been different. Of course that could be wishful thinking - or a sign that in the final days they were offering fire sale prices.
- rvba 3y agoThere are those (rare?) cases of bootstrapping
- deleted 3y ago[deleted]
- deleted 3y ago[deleted]
- andrewmutz 3y agoProbably they used those two months to try to find a buyer for the company
- v1l 3y agoEntitlement is more prevalent than we think.
- jonkho 3y agoYep people talk like they are owed something. They are not. Outstanding obligations are met with each paycheck.
- itsoktocry 3y ago>If things are dire enough to close up shop now, they probably were dire enough to close up shop 2 months ago, and you can use the cash to give your employees some runway for finding new employment. This might be true, but personally I'd rather the company try to remain a going concern.
- deleted 3y ago[deleted]
- sangnoir 3y ago> This might be true, but personally I'd rather the company try to remain a going concern. You could refuse the severance as an employee if you wish to go down swinging. Edit: Knowing the company is doomed in a month or 2 and not employees offering severance is not a good thing yo do, in my book.
- JumpCrisscross 3y ago> Knowing the company is doomed in a month or 2 and not alerting employees is not a good thing yo do, in my book Has anyone at Convoy claimed this?
- sangnoir 3y agoNot just alerting, but offering severance. No one at Convoy was offered severance - now or in the past month. I edited my earlier comment to reflect my meaning.
- JumpCrisscross 3y ago> Not just alerting, but offering severance Separate questions. You said the company knew it was "doomed in a month or 2 and [did] not [alert] employees." I've seen them messaging pain since their multiple rounds of layoffs last year and this [1], as well as in August [2]. Moreover, I haven't seen claims of employees being blindsided (as Yellow drivers were). [1] https://www.geekwire.com/2023/trucking-marketplace-convoy-makes-more-layoffs-citing-customer-service-efficiency-gains/ https://www.geekwire.com/2023/trucking-marketplace-convoy-ma... [2] https://www.theinformation.com/articles/digital-trucking-company-convoy-explores-options-including-a-sale?rc=gtdonx https://www.theinformation.com/articles/digital-trucking-com...
- tejohnso 3y agoTesla wouldn't exist if Elon had shut down at the 2 month dire point. At least, I recall him saying they were at one point about 2 days away from bankruptcy. Not surprising though, that Elon would be in the same camp as this Convoy CEO, not likely to shed too many tears over worker concerns.
- deleted 3y ago[deleted]
- MourYother 3y agoEveryone at Tesla would be better without the manchild.
- shafyy 3y agoAnd Elon hasn't been known to exaggerate greatly or lie, so this must be true.
- signatoremo 3y agoWho knows if it was two days away from bankruptcy, but Tesla and SpaceX were very close to running out of money in 2008: https://www.businesstoday.in/amp/technology/news/story/elon-musks-christmas-eve-miracle-how-he-saved-tesla-from-bankruptcy-398108-2023-09-12 https://www.businesstoday.in/amp/technology/news/story/elon-... Also where were you during 2017, 2018 period when the doomsayers (aka TESLAQ) predicted the same so often? So much so that this tweet became famous? https://x.com/elonmusk/status/980566116614291456?s=46&t=yN2X3Lb3pCLOqlCC9FRNxg https://x.com/elonmusk/status/980566116614291456?s=46&t=yN2X...
- shafyy 3y agoI don't dispute that they were close to running out of money, but what does "2 days" even mean in that context? It probably means that soon they would have needed to decide when to start the bankrucpty procedues or something.
- sokoloff 3y ago
- deleted 3y ago[deleted]
- jahewson 3y agoNo a company cannot begin winding up without reaching an agreement with its creditors - the winding up process is a de-facto admission of insolvency and the company needs to declare bankruptcy and the creditors get first dibs on the assets. It’s nothing like a layoff. For example, imagine that you are a supplier to company A and now your contract is both unpaid and cancelled and you’re going to have to lay off some of your own staff. Do you recover the contract money from company A, to give your staff severance? Or can company A stiff you and use it to give their own staff severance? (No, they can’t.)
- pc86 3y agoWhat about 2 months before that? 2 months earlier still? Another 6? They raised $260M a year ago and it sounds like an extraordinarily capital-intensive business. It's pretty easy to say "oh you should have done this differently" with almost zero actual knowledge of the situation or experience.
- deleted 3y ago[deleted]
- WisNorCan 3y agoIt is interesting to see that employees of Convoy aren't saying bad things about the CEO. But people on the outside who don't know the CEO are saying bad things. Usually it is the reverse.
- laserlight 3y agoStockholm syndrome is a thing: https://en.wikipedia.org/wiki/Stockholm_syndrome https://en.wikipedia.org/wiki/Stockholm_syndrome
- mrnaught 3y agodo we know if the commenters claiming to be ex-employee, real ex-employees ?
- ziddoap 3y ago>It is interesting to see that employees of Convoy aren't saying bad things about the CEO A whole two people who claim to be ex-convoy employees have chimed in from what I have seen. Hardly representative of what the average ex-employee thinks. Certainly not enough to form a conclusion either way.
- sangnoir 3y agoSelection bias - Convoy employees who didn't like the CEOs approach didn't stay employees for long.
- 3y ago
- __loam 3y agoThere's no money left to provide lol
- dboreham 3y ago> if a company is shutting down, it obviously can't provide severance Not really true. The company is owned by its shareholders, and they may choose to use funds belonging to the company (after paying outstanding obligations) to pay severance, or they may divide the funds among themselves. If there are no funds, they can choose to invest more to pay severance. Obviously they're unlikely to want to do that, but it's not a case of "can't" but rather "won't".
- stickfigure 3y ago> choose to invest more to pay severance This is not a thing that happens in reality.
- yrdguyffvg 3y ago[flagged]
- JumpCrisscross 3y ago> they may choose to use funds belonging to the company (after paying outstanding obligations) to pay severance If they can do this, they can pay salaries another month. Making a go/no go call at the edge is difficult. It sounds like Convoy thought it was getting a loan that didn’t come through. Put another way: if the CEO shut down the company while loan negotiations were in place, it would have zeroed out the common stock while giving preferred investors a pay-out (in addition to everyone some severance).
- sangnoir 3y ago> If they can do this, they can pay salaries another month If leadership decides to use the remaining funds on salaries rather than severance - then they should be judged on that! What good is buying one extra month for a doomed company? That month is more valuable to individual employees who can use it to look for new jobs
- JumpCrisscross 3y ago
- jkubicek 3y agoI've only worked at one company that shut down, and we were notified a month in advance, giving us all time to find a new job while still getting a paycheck and healthcare. If the CEO wanted to continue operations for another month to allow folks to find new work, they could have.
- alex_lav 3y ago> Ex-Convoy employee here: if a company is shutting down, it obviously can't provide severance. It's not a matter of class or not. A statement that's just verifiably untrue. Companies that shut down provide severance all the time. It's just a matter of priority.
- cyanydeez 3y agoYou think they couldn't forecast this months in advance? Parent is basically saying they gambled you sift landing and lost, as most psychopaths would.
- dudul 3y agoOnce you've reached 1 month of runway I think time is up. Let everyone go with a few weeks of severance and let them find a new job.
- mikeryan 3y agoThey had two months of salary and healthcare two months ago. That’s the time to cut bait.
- the_gipsy 3y agoYou sound very gullible. As if execs don't know nor pick when to shut down.
- gosub100 3y agoI've been laid-off from a startup and got 2-3 weeks severance
- wutwutwat 3y agoI wonder what golden parachute (severance) your ex-ceo took home
- Ensorceled 3y agoI've been part of several failed startups ... they ALL provided severance during shutdown. Where is the "obviously" coming from here? You only can't pay severance if you are shutting down because you "ran out the clock" on a clearly failing venture and deliberately screwed your employees.
- shermozle 3y agoIn Australia this is called insolvent trading. Is that not also a crime that Directors go to jail for in America?
- itsmeacupoftea 3y agoTo be clear, in Australia, this would not be trading whilst insolvent. If the director was not negligent, and they had a legitimate reason to believe they would be able to pay their debt when it fell due, whether via new revenue, new debt or restructure of existing debt, then it wasn't trading whilst insolvent. The directors had reduced expenses, had been seeking further investment, to increase revenue, and finally to sell the assets of the business, before voluntarily ceasing to trade. They executed their power and duties in good faith, with the care and diligence a reasonable person in their situation would have. It's not a crime to have a business fail.
- don_neufeld 3y agoIt sure is! I shut down a VC backed startup over a decade ago and yes we did provide severance.
- clutchdude 3y agoAt some point, during a monthly accounting reconciliation, someone should have piped up and said "Unless $<x> revenue comes in the next <y> months, we will be unable to fund personnel/payroll in <y> months." .
- golergka 3y agoSmall (under 10 people) startup I worked at shut down this June, and I got 2 months severance I wasn't even owed, pure good will of the CEO. It's a choice.
- seattle_spring 3y agoThat completely depends on if the founders or investors are walking away with anything.