4 ms·

If you agree with the narrative of shareholder primacy and are looking at short term outcomes then sure, nothing is wrong here. But this means that we're ignori

If you agree with the narrative of shareholder primacy and are looking at short term outcomes then sure, nothing is wrong here. But this means that we're ignoring the harm that was done to the people that lost their income and the disruptions that the rest of the org will experience. Layoffs can be devastating to the people that were terminated; a job loss is one of the higher stress events one can experience. If you take into account the larger impact than "shareholder value" then dumping stock to capture value is an abdication of responsibility on the CEO for over -hiring, and has terrible optics of financial gain right when a number of employees took it on the chin.

brvsft 3y ago
> But this means that we're ignoring the harm that was done to the people that lost their income and the disruptions that the rest of the org will experience. As opposed to the 'benefit' that was done while they were granted income? I'm unsure what your point is. Is a business never supposed to 'harm' its employees? They're never allowed to fire people? What is the logical conclusion of your statement? A business ought to be liable to keep their employees employed forever even if it means the business becomes unprofitable and eventually has to declare bankruptcy, resulting in the firing of all employees? Who prevents the harm then? Or is this where the magical thinking that government will make it all better using the taxes from the other companies and employees that have yet to go bankrupt despite being unable to fire anyone ever?
- aaomidi 3y ago
  It should actually be very very expensive for a company to fire people. Why do stock markets have an automated forced "PAUSE" when stocks seem like they are crashing? It's because companies, investors, people, or even computers don't always act rationally. That pause has prevented a lot of hiccups from turning into full-blown crashes. Right now, when a company lays people off, the town, state, and federal government are the ones who have to end up picking up the downstream effects of that in the macro sense. And local businesses, families, loved ones have to pick them up in the micro sense. This trade doesn't actually make sense if you think about it, a company _should not_ be able to cause that level of a disruption, without a penalty to itself. This is why I actually don't mind some specifics of European companies, where firing people is _genuinely really hard_. This also means that when hiring, you simply have to plan better. It is okay to expect a large company to "plan better" than an individual with a single income stream. It is okay to push the burden of the pain of bad markets onto companies, rather than individuals.
  - landemva 3y ago
    > when a company lays people off, the town, state, and federal government are the ones who have to end up picking up the downstream effects If the existing unemployment _insurance_ (forced payroll contributions to each State) are not sufficient, then change that insurance system. There could be a business opportunity for supplemental market-priced contributions which pay on job loss. That wouldn't be worse than the 'legal assist' ripoff plans HR pimps at employee hiring.
    - aaomidi 3y ago
      Unemployment insurance can't, and shouldn't be designed around market acting irrationally. That's not a reasonable insurance plan. > then change that insurance system. Also, more about this, why? We have a ton of levers and controls we can utilize here. Why does it need to be that the insurance system needs to change? That seems like we're closing off a lot of levers _just because_
      - landemva 3y ago
        Forced unemployment insurance is a supposed safety net, so should be open to discussion as part of solution. Let me opt out, or take premiums to a non-State provider.
    - dragonwriter 3y ago
      > There could be a business opportunity for supplemental market-priced contributions which pay on job loss. Private job loss insurance exists already, its not an non-addressed potential market.
      - landemva 3y ago
        Wow, I might be interested. Do you have any recommendations in USA?
  - educaysean 3y ago
    The employment laws in many Asian countries make it very difficult to lay people off or fire them. This sounds great on paper, but comes its own host of problems. One knock on effect is that the job market for anyone that isn't a new grad is tough and extremely hostile. Having been laid off or fired carries such a stigma because it is a rare thing that most people don't encounter. If you're past your 30s and laid off? Good luck landing a new gig anywhere near the level you were at before. This can devastate many families in ways unimaginable to many Americans. Another secondary effect is that workplace politics become dominant. Many incompetent workers that should've been fired long time ago are allowed to linger on, gaining seniority and accumulating more power. This translates into a workplace where your value isn't tied to the work you output, but which "line" you stand behind. There is no panacea. Pick your poison.
- superhumanuser 3y ago
  The OC's perspective is that one is entitled to income and being laid off is a regression. In reality, being laid off is a return to stasis. They consume more than they can individually produce and feel an entitlement to have this lifestyle perpetually maintained.
  - coldbrewed 3y ago
    The OC's perspective (that's me) is that there's a massive power asymmetry between the employed and employer. An employee can (typically) only work for one company at a time whereas an employer typically has many employees. The cost for an employee being terminated represents an immediate financial hazard for the employee; when an employee quits then the employer can absorb that shock more easily by distributing outstanding work between remaining employees. When an employee quits for a new job, that's a speed bump for the employer; when the employer lays someone off, that's life changing for the employee. Employees have many fewer protections than do corporations so layoffs should be done with caution and the cost of layoffs should absolutely be shared with leadership. > In reality, being laid off is a return to stasis. Not even close, my dude. Being laid off starts a timer for when that person's finances run out. If that person is, let's say, badly burned out from a months-long crunch period then good luck getting a job. Being laid off is deeply disruptive; if you don't believe me then try it out for yourself sometime. And going back to the original discussion of the CEO getting a payout as a result of layoffs, that represents leadership financially benefiting at the expensive of the laid off employees. Layoffs indicate a failure of leadership to grow and plan accordingly and leadership should be sharing in the pain rather than cashing in. Productive, healthy societies survive and thrive when members of that society can afford to take risks can tolerate shocks, and aren't destroyed when they're unable to work. Systems like social security allow elderly people to retire which frees up other productive workers to have careers rather than be caretakers. Systems like unemployment benefits give people time to reorient after a layoff and search for a career where they can be more productive rather than having to reach for the first job that they can find. These systems are paid for by redistributing income, either temporally with things like employment taxes, or along the income spectrum via progressive taxes. The case of a CEO financially benefiting from layoffs is the exact opposite of this pattern - extracting stock gains from the financial deprivation of employees. I'm not arguing that we should redistribute all income and it shouldn't be possible to get rich, but I am arguing that we should, shall we say, have a little fucking empathy for people that have been disadvantaged and attempt to support them rather than celebrating the active progression of income inequality. Edit: typo fixes and a minor clarification.
- 303uru 3y ago
  The argument that businesses should never 'harm' their employees by laying them off is a straw man. No one is suggesting that companies be legally bound to keep all employees indefinitely. However, there is a vast difference between making strategic adjustments and engaging in practices that unduly harm employees for the sake of short-term financial gains. Moreover, the U.S. government provides ample protections for companies, allowing them to restructure, refinance, or ironically even declare bankruptcy (a process I don't think you understand based on your comment) in an orderly manner to either save the business or ensure that creditors and employees are treated as fairly as possible in the event of a closure. The implication that government intervention is 'magical thinking' is a misrepresentation. Government policies are not about preventing all harm but about providing a safety net that cushions the blow for individuals while allowing the economy to remain flexible and resilient. This dual approach helps maintain a stable economic environment where businesses can make tough decisions without causing undue distress to employees. I think it's a very easy argument to make that the lack of regulation in the realm of employment has made our economy quite unstable so that a small number of people can extract more wealth. The logical extension of the argument for employee protection is not to make businesses unviable but to ensure that the economic system is equitable and that the inevitable pains of market fluctuations are not borne disproportionately by the workforce. Capitalism, supported by thoughtful government regulation, provides a framework where both businesses and employees have rights and protections, allowing for a balanced and fair economic landscape.
  - brvsft 3y ago
    > The argument that businesses should never 'harm' their employees by laying them off is a straw man. No one is suggesting that companies be legally bound to keep all employees indefinitely. I believe it was implied in the comment I replied to. The focus on 'harm' would imply that they believe any harm should be minimized if not eliminated outright. > However, there is a vast difference between making strategic adjustments and engaging in practices that unduly harm employees for the sake of short-term financial gains. What evidence do you have to make this claim in the context of Spotify? Are you suggesting that because the CFO sold his stock, therefore the layoffs only occurred specifically with short-term financial gains in mind? > bankruptcy (a process I don't think you understand based on your comment) We both know what I'm talking about, details of exactly how bankruptcy affects employees, creditors, and shareholders are unimportant. I'll stop reading your comment here, given you wanted to use the old "you're doing a straw man" and then pull this out.
avs733 3y ago
> If you agree with the narrative of shareholder primacy I've really begun to notice that there is a large group of people who see this not as a narrative but as objective and external reality. I see it often on this topic, that capitalism (definitional arguments noted) is not just inherently good - it is in fact inherent. However it seems to increasingly apply to many people's perspectives on social and societal concepts. I love me some internet...have since I was a kid...but one externality of being able to find and interact with people who think similarly to you is increased coalescence around different realities as realities rather than narratives or perspectives.
- coldbrewed 3y ago
  I agree that many people perceive this as an absolute truth, and I have to reluctantly acknowledge Milton Friedman's success in completely changing the narrative around corporate responsibilities. I don't think that the adoption of this narrative is due to the Internet though; the original Supreme Court decision of Dodge v. Ford legally enshrined it and the narrative has been actively taught for a long time. I know that I took it at face value for a long time as a result of my education along with the overwhelming share of my peers so I'd say this has been pushed by a broad segment of society. At present we do rely on shareholders in different parts of society to fund new ventures -- most of us are here on HN because we worked at a VC-funded startup. Shareholders should get paid out. But workers have a stake in a company, the community has a stake in a company, and society at large has some small stake in a company. We shouldn't select shareholders as the main voting party in the operations of a company when the impacts of company operations are so much wider. For good examples of companies whose impact was much larger than the shareholders, see also: DuPont/Chemours with PFAS, the manufacturers of CFCs, oil companies, etc.
  - avs733 3y ago
    > I don't think that the adoption of this narrative is due to the Internet though; Clarifying…I meant the narratives in general, not this particular one. When your information sphere becomes narrowed, whatever narratives are within it tend to be reinforced and over time become inseparable from reality. Left and right, Russian and American, etc. it doesn’t matter it happens.

brvsft 3y ago

> But this means that we're ignoring the harm that was done to the people that lost their income and the disruptions that the rest of the org will experience. As opposed to the 'benefit' that was done while they were granted income? I'm unsure what your point is. Is a business never supposed to 'harm' its employees? They're never allowed to fire people? What is the logical conclusion of your statement? A business ought to be liable to keep their employees employed forever even if it means the business becomes unprofitable and eventually has to declare bankruptcy, resulting in the firing of all employees? Who prevents the harm then? Or is this where the magical thinking that government will make it all better using the taxes from the other companies and employees that have yet to go bankrupt despite being unable to fire anyone ever?

aaomidi 3y ago
It should actually be very very expensive for a company to fire people. Why do stock markets have an automated forced "PAUSE" when stocks seem like they are crashing? It's because companies, investors, people, or even computers don't always act rationally. That pause has prevented a lot of hiccups from turning into full-blown crashes. Right now, when a company lays people off, the town, state, and federal government are the ones who have to end up picking up the downstream effects of that in the macro sense. And local businesses, families, loved ones have to pick them up in the micro sense. This trade doesn't actually make sense if you think about it, a company _should not_ be able to cause that level of a disruption, without a penalty to itself. This is why I actually don't mind some specifics of European companies, where firing people is _genuinely really hard_. This also means that when hiring, you simply have to plan better. It is okay to expect a large company to "plan better" than an individual with a single income stream. It is okay to push the burden of the pain of bad markets onto companies, rather than individuals.
- landemva 3y ago
  > when a company lays people off, the town, state, and federal government are the ones who have to end up picking up the downstream effects If the existing unemployment _insurance_ (forced payroll contributions to each State) are not sufficient, then change that insurance system. There could be a business opportunity for supplemental market-priced contributions which pay on job loss. That wouldn't be worse than the 'legal assist' ripoff plans HR pimps at employee hiring.
  - aaomidi 3y ago
    Unemployment insurance can't, and shouldn't be designed around market acting irrationally. That's not a reasonable insurance plan. > then change that insurance system. Also, more about this, why? We have a ton of levers and controls we can utilize here. Why does it need to be that the insurance system needs to change? That seems like we're closing off a lot of levers _just because_
    - landemva 3y ago
      Forced unemployment insurance is a supposed safety net, so should be open to discussion as part of solution. Let me opt out, or take premiums to a non-State provider.
  - dragonwriter 3y ago
    > There could be a business opportunity for supplemental market-priced contributions which pay on job loss. Private job loss insurance exists already, its not an non-addressed potential market.
    - landemva 3y ago
      Wow, I might be interested. Do you have any recommendations in USA?
- educaysean 3y ago
  The employment laws in many Asian countries make it very difficult to lay people off or fire them. This sounds great on paper, but comes its own host of problems. One knock on effect is that the job market for anyone that isn't a new grad is tough and extremely hostile. Having been laid off or fired carries such a stigma because it is a rare thing that most people don't encounter. If you're past your 30s and laid off? Good luck landing a new gig anywhere near the level you were at before. This can devastate many families in ways unimaginable to many Americans. Another secondary effect is that workplace politics become dominant. Many incompetent workers that should've been fired long time ago are allowed to linger on, gaining seniority and accumulating more power. This translates into a workplace where your value isn't tied to the work you output, but which "line" you stand behind. There is no panacea. Pick your poison.
superhumanuser 3y ago
The OC's perspective is that one is entitled to income and being laid off is a regression. In reality, being laid off is a return to stasis. They consume more than they can individually produce and feel an entitlement to have this lifestyle perpetually maintained.
- coldbrewed 3y ago
  The OC's perspective (that's me) is that there's a massive power asymmetry between the employed and employer. An employee can (typically) only work for one company at a time whereas an employer typically has many employees. The cost for an employee being terminated represents an immediate financial hazard for the employee; when an employee quits then the employer can absorb that shock more easily by distributing outstanding work between remaining employees. When an employee quits for a new job, that's a speed bump for the employer; when the employer lays someone off, that's life changing for the employee. Employees have many fewer protections than do corporations so layoffs should be done with caution and the cost of layoffs should absolutely be shared with leadership. > In reality, being laid off is a return to stasis. Not even close, my dude. Being laid off starts a timer for when that person's finances run out. If that person is, let's say, badly burned out from a months-long crunch period then good luck getting a job. Being laid off is deeply disruptive; if you don't believe me then try it out for yourself sometime. And going back to the original discussion of the CEO getting a payout as a result of layoffs, that represents leadership financially benefiting at the expensive of the laid off employees. Layoffs indicate a failure of leadership to grow and plan accordingly and leadership should be sharing in the pain rather than cashing in. Productive, healthy societies survive and thrive when members of that society can afford to take risks can tolerate shocks, and aren't destroyed when they're unable to work. Systems like social security allow elderly people to retire which frees up other productive workers to have careers rather than be caretakers. Systems like unemployment benefits give people time to reorient after a layoff and search for a career where they can be more productive rather than having to reach for the first job that they can find. These systems are paid for by redistributing income, either temporally with things like employment taxes, or along the income spectrum via progressive taxes. The case of a CEO financially benefiting from layoffs is the exact opposite of this pattern - extracting stock gains from the financial deprivation of employees. I'm not arguing that we should redistribute all income and it shouldn't be possible to get rich, but I am arguing that we should, shall we say, have a little fucking empathy for people that have been disadvantaged and attempt to support them rather than celebrating the active progression of income inequality. Edit: typo fixes and a minor clarification.
303uru 3y ago
The argument that businesses should never 'harm' their employees by laying them off is a straw man. No one is suggesting that companies be legally bound to keep all employees indefinitely. However, there is a vast difference between making strategic adjustments and engaging in practices that unduly harm employees for the sake of short-term financial gains. Moreover, the U.S. government provides ample protections for companies, allowing them to restructure, refinance, or ironically even declare bankruptcy (a process I don't think you understand based on your comment) in an orderly manner to either save the business or ensure that creditors and employees are treated as fairly as possible in the event of a closure. The implication that government intervention is 'magical thinking' is a misrepresentation. Government policies are not about preventing all harm but about providing a safety net that cushions the blow for individuals while allowing the economy to remain flexible and resilient. This dual approach helps maintain a stable economic environment where businesses can make tough decisions without causing undue distress to employees. I think it's a very easy argument to make that the lack of regulation in the realm of employment has made our economy quite unstable so that a small number of people can extract more wealth. The logical extension of the argument for employee protection is not to make businesses unviable but to ensure that the economic system is equitable and that the inevitable pains of market fluctuations are not borne disproportionately by the workforce. Capitalism, supported by thoughtful government regulation, provides a framework where both businesses and employees have rights and protections, allowing for a balanced and fair economic landscape.
- brvsft 3y ago
  > The argument that businesses should never 'harm' their employees by laying them off is a straw man. No one is suggesting that companies be legally bound to keep all employees indefinitely. I believe it was implied in the comment I replied to. The focus on 'harm' would imply that they believe any harm should be minimized if not eliminated outright. > However, there is a vast difference between making strategic adjustments and engaging in practices that unduly harm employees for the sake of short-term financial gains. What evidence do you have to make this claim in the context of Spotify? Are you suggesting that because the CFO sold his stock, therefore the layoffs only occurred specifically with short-term financial gains in mind? > bankruptcy (a process I don't think you understand based on your comment) We both know what I'm talking about, details of exactly how bankruptcy affects employees, creditors, and shareholders are unimportant. I'll stop reading your comment here, given you wanted to use the old "you're doing a straw man" and then pull this out.

avs733 3y ago

> If you agree with the narrative of shareholder primacy I've really begun to notice that there is a large group of people who see this not as a narrative but as objective and external reality. I see it often on this topic, that capitalism (definitional arguments noted) is not just inherently good - it is in fact inherent. However it seems to increasingly apply to many people's perspectives on social and societal concepts. I love me some internet...have since I was a kid...but one externality of being able to find and interact with people who think similarly to you is increased coalescence around different realities as realities rather than narratives or perspectives.

coldbrewed 3y ago
I agree that many people perceive this as an absolute truth, and I have to reluctantly acknowledge Milton Friedman's success in completely changing the narrative around corporate responsibilities. I don't think that the adoption of this narrative is due to the Internet though; the original Supreme Court decision of Dodge v. Ford legally enshrined it and the narrative has been actively taught for a long time. I know that I took it at face value for a long time as a result of my education along with the overwhelming share of my peers so I'd say this has been pushed by a broad segment of society. At present we do rely on shareholders in different parts of society to fund new ventures -- most of us are here on HN because we worked at a VC-funded startup. Shareholders should get paid out. But workers have a stake in a company, the community has a stake in a company, and society at large has some small stake in a company. We shouldn't select shareholders as the main voting party in the operations of a company when the impacts of company operations are so much wider. For good examples of companies whose impact was much larger than the shareholders, see also: DuPont/Chemours with PFAS, the manufacturers of CFCs, oil companies, etc.
- avs733 3y ago
  > I don't think that the adoption of this narrative is due to the Internet though; Clarifying…I meant the narratives in general, not this particular one. When your information sphere becomes narrowed, whatever narratives are within it tend to be reinforced and over time become inseparable from reality. Left and right, Russian and American, etc. it doesn’t matter it happens.