5 ms·

It is not the individual layoff which is the issue for the people. It is the general feeling that the little man get squeezed under the argument of cost savings

by oaiey 3y ago

It is not the individual layoff which is the issue for the people. It is the general feeling that the little man get squeezed under the argument of cost savings and the rich man takes out even more than the year before, independent of the market and company performance. In the past the entrepreneur took the yearly risks and was rewarded or not for it. The variation / risk on the (unrealistic) return is now managed on the backs of the employees. These layoffs are often bound to the goal to have a return like Apple and not like General Electric (company examples are educated guesses). In the end, the employees have a miserable life and products of the company are a shit show.

happytiger 3y ago
It’s one metric: revenue per employee. In a more capital expensive market, such as our current one, this metric is the one corporate managers are focusing on. For example, Google: https://fourweekmba.com/google-revenue-per-employee/ https://fourweekmba.com/google-revenue-per-employee/ Ultimately it’s about something called austerity, which is taught in mba-jargon filled economic theory as a way to keep the working classes inline. Since the 1920s, western countries have used a cycle of expansion and contraction to crush the working people’s power in the interest of controlling inflation (which is really largely the direct result of excess government money printing as a result of imbalanced spending), all the while consolidating more-and-more wealth in smaller and smaller circles of people. It’s an absolutely psychotic way to run a business cycle, and it kills a great many people directly: https://archive-yaleglobal.yale.edu/content/how-austerity-kills https://archive-yaleglobal.yale.edu/content/how-austerity-ki... The latest deleveraging of worker cries and demands for better conditions and pay comes as workers are asking for more work-at-home and flexibility, a more balanced work/life balance, and focus on similar health and wellness goals, as well as demands for salary raises to keep up with the ongoing inflation. For three decades worker pay has been dropping. The gap between the growth of productivity and that of a typical worker’s pay has grown quite extreme, and continues to grow through the application of austerity principle: https://www.epi.org/publication/charting-wage-stagnation/ https://www.epi.org/publication/charting-wage-stagnation/ While it looks like “inflation and interest rates are causing the problems,” it remains easily predictable economic theory that we would find ourselves here. People may not realize it, but since 2020, the US has printed nearly 80% of ALL US Dollars in circulation. To put that in perspective, at the start of 2020 we had ~$4 trillion in circulation. Now, there is nearly $19 TRILLION in circulation, a 375% jump in 3 years. This of course causes “inflation,” which is in no small part what the news likes to call “excess corporate profits.” Basically inflation benefits those that hold real assets and are closest to the money printers, while crushing those who don’t and are the furthest (often the most marginalized). And again, austerity is applauded: https://fortune.com/2023/03/02/marc-benioff-salesforce-earnings-analysts-outlook-layoffs-profitability/amp/ https://fortune.com/2023/03/02/marc-benioff-salesforce-earni... Consider that the market rewards these companies handsomely for their layoffs: - Amazon had $2.8 million in earnings (before interest, taxes, depreciation, and amortization – or EBITDA) for every staff member they laid off in January. - Meta had $3.9 million in earnings for each of the 11,000 staff members they laid off in November. In response to Meta’s cost-cutting strategy, its stock price increased by 19 percent. - Tech giant Microsoft had an EBITDA of $98.8 billion in 2022. This means they earned $9.8 million for each person they laid off in January 2023. - Other companies’ layoffs weren’t as difficult to understand: WeWork ended 2022 with an EBITDA of -$824 million, and Spotify ended its fiscal year with an EBITDA of -$290 million. https://www.business.com/finance/big-tech-earnings-and-layoffs-compared/ https://www.business.com/finance/big-tech-earnings-and-layof... So it’s unfortunately financially rewarding to lay people off, and it’s a measurable economic impact you can show the board and your investors… Meanwhile there are some CEOs who have figured out how to keep everyone employed, and it points to the fact that this model isn’t the only possible way for businesses to operate: https://www.benefitnews.com/news/a-tech-ceo-avoided-mass-layoffs-by-implementing-a-4-day-workweek https://www.benefitnews.com/news/a-tech-ceo-avoided-mass-lay... There will come a day when the current management ethos becomes unfashionable and mass layoffs become a sign of failure and poor executive management, but unfortunately the market rewards it right now, and ultimately products and employee quality of life are secondary concerns to our rather sociopathic business cycle. Forgive my diatribe. I have developed quite a passion for this issue over the years, as my training taught me all about layoffs and how to do them, but after running companies for a long while, I’ve become quite unhappy with “business as usual.” This system sucks, and it’s causing massive breakdowns in trust between employees and employers that ultimately cause irreversible harm to actual global competitiveness. The system people live and work in has to be in those people’s best interests to proliferate and ultimately needs to align profit with the best interests of society. In my mind, the long term concequences of the current system’s breakdown of trust is devastating to everyone involved and counterproductive to lasting global competitiveness (which requires cooperation, teamwork and a growth mindset these adversarial conditions cannot foster), and yet we happily pedal along as if everything is fine. It’s not.
- deleted 3y ago
  [deleted]
- xdavidliu 3y ago
  what do you mean by “earnings per staff member laid off”? are you dividing their total earnings by number of staff laid off? if so, then Apple earning 100 billion while laying off 10 employees would be “earning 10 billion per staff laid off”, or am i misunderstanding?
- deelowe 3y ago
  Wow... This all seems a bit cherry-picked... - The google metric doesn't make sense. In fact, the graph tells sort of the opposite story. Revenue per employee shot up and then they did layoffs in response... huh? My guess is that this graph is missing the forecasts that are being used to make these decisions. Google likely has a similar chart, but one that goes out 5-10 years and is showing a concerning trend (that was certainly the case when I worked there). - Austerity is a government thing. I'm not connecting the dots between deficit reduction and corporate layoffs... - I thought the money supply calculations changed recently which is why the metric shot up in recent years. - How are you getting Microsoft was rewarded with 9.8M per employee for their "layoffs?" They cut 10k people, so wouldn't this mean if they had laid off 1 person, they would have earned 98B per layoff? This metric doesn't make sense. - The "other CEO" you link to runs a company with 200 employees. I'm not sure this is comparable to a company the size of Google.
- matwood 3y ago
  Companies aren't charities. Just because they can afford to hire or keep an employee doesn't mean they should or have to. You're also forgetting that raw dollars are not how companies are viewed. Every company is viewed on how it performs agains the risk free return rate. The rate going from 0 -> 5+ means companies must now generate returns in excess of the RFR in line with their generally accepted risk. This is the ultimate outcome of raising rates to reduce inflation - across the board layoffs lowering averages salaries.
  - ParetoOptimal 3y ago
    Companies aren't charities, but if they don't act charitably towards employees it's a bad deal for employers and employees. I think that was their point. To not be taken advantage of employees are incentivized to do as little work as possible.
somedude895 3y ago
> and products of the company are a shit show I guess we'll see if this turns out to be true. If it does, they'll realize their mistakes, and the competitors that didn't let people go should outperform them. If it doesn't, then it'll show that many tech companies simply overhired, which I think we all know they did over the past few years. I myself work at a telco where business has stagnated over the past decade, due to market saturation and new, cheaper competition. We've had layoffs each year since I started since that's the only way to keep increasing profits. One day it'll probably hit me, but oh well. I know our company has fat to trim and if I'm actually not making any real impact, then I'm fine with looking for a job where I do. Efficient companies are important for a healthy economy.
- pyrale 3y ago
  > I guess we'll see if this turns out to be true. https://killedbygoogle.com/ https://killedbygoogle.com/
  - asadalt 3y ago
    surely you don’t want google to maintain 100s of experiments indefinitely.
    - x86x87 3y ago
      It's not about killing experiments. It's about things that were advertised as the next big thing with fanfare to not be properly maintained and eventually killed even though they had a lot of users. That's the problem.
closeparen 3y ago
By any reasonable metric, Google SWEs are "the rich man" in American society.
- rvrs 3y ago
  This isn't the right way to view it -- it's not necessarily about a dollar amount. People making 6 figures and people making 5 figures are not enemies. The segmentation is between those tho provide work and those who perform it, with the former profiting off the surplus value provided by the latter
  - closeparen 3y ago
    Who do you think owns public companies?
    - rvrs 3y ago
      Are you insinuating that the workers (or the public) have the ability to self-determine through share ownership? You are aware that Alphabet stock is split, with the class B shares being owned by the founders, right?
      - closeparen 3y ago
        Public company stocks need to go up because that's how millions of people with economic profiles not dissimilar to Google SWEs fund their retirement.
    - lancesells 3y ago
      The top 10% of americans own ~90% of stocks. I think the top 1% owns somewhere around 45% of those stocks.
      - closeparen 3y ago
        Do you think FAANG SWEs aren't in the top 10% of Americans? Investors aren't some distinct class, we're mainly talking about pension funds and the 401ks of similarly well-compensated professional-managerial workers.

by oaiey 3y ago

happytiger 3y ago

It’s one metric: revenue per employee. In a more capital expensive market, such as our current one, this metric is the one corporate managers are focusing on. For example, Google: https://fourweekmba.com/google-revenue-per-employee/ https://fourweekmba.com/google-revenue-per-employee/ Ultimately it’s about something called austerity, which is taught in mba-jargon filled economic theory as a way to keep the working classes inline. Since the 1920s, western countries have used a cycle of expansion and contraction to crush the working people’s power in the interest of controlling inflation (which is really largely the direct result of excess government money printing as a result of imbalanced spending), all the while consolidating more-and-more wealth in smaller and smaller circles of people. It’s an absolutely psychotic way to run a business cycle, and it kills a great many people directly: https://archive-yaleglobal.yale.edu/content/how-austerity-kills https://archive-yaleglobal.yale.edu/content/how-austerity-ki... The latest deleveraging of worker cries and demands for better conditions and pay comes as workers are asking for more work-at-home and flexibility, a more balanced work/life balance, and focus on similar health and wellness goals, as well as demands for salary raises to keep up with the ongoing inflation. For three decades worker pay has been dropping. The gap between the growth of productivity and that of a typical worker’s pay has grown quite extreme, and continues to grow through the application of austerity principle: https://www.epi.org/publication/charting-wage-stagnation/ https://www.epi.org/publication/charting-wage-stagnation/ While it looks like “inflation and interest rates are causing the problems,” it remains easily predictable economic theory that we would find ourselves here. People may not realize it, but since 2020, the US has printed nearly 80% of ALL US Dollars in circulation. To put that in perspective, at the start of 2020 we had ~$4 trillion in circulation. Now, there is nearly $19 TRILLION in circulation, a 375% jump in 3 years. This of course causes “inflation,” which is in no small part what the news likes to call “excess corporate profits.” Basically inflation benefits those that hold real assets and are closest to the money printers, while crushing those who don’t and are the furthest (often the most marginalized). And again, austerity is applauded: https://fortune.com/2023/03/02/marc-benioff-salesforce-earnings-analysts-outlook-layoffs-profitability/amp/ https://fortune.com/2023/03/02/marc-benioff-salesforce-earni... Consider that the market rewards these companies handsomely for their layoffs: - Amazon had $2.8 million in earnings (before interest, taxes, depreciation, and amortization – or EBITDA) for every staff member they laid off in January. - Meta had $3.9 million in earnings for each of the 11,000 staff members they laid off in November. In response to Meta’s cost-cutting strategy, its stock price increased by 19 percent. - Tech giant Microsoft had an EBITDA of $98.8 billion in 2022. This means they earned $9.8 million for each person they laid off in January 2023. - Other companies’ layoffs weren’t as difficult to understand: WeWork ended 2022 with an EBITDA of -$824 million, and Spotify ended its fiscal year with an EBITDA of -$290 million. https://www.business.com/finance/big-tech-earnings-and-layoffs-compared/ https://www.business.com/finance/big-tech-earnings-and-layof... So it’s unfortunately financially rewarding to lay people off, and it’s a measurable economic impact you can show the board and your investors… Meanwhile there are some CEOs who have figured out how to keep everyone employed, and it points to the fact that this model isn’t the only possible way for businesses to operate: https://www.benefitnews.com/news/a-tech-ceo-avoided-mass-layoffs-by-implementing-a-4-day-workweek https://www.benefitnews.com/news/a-tech-ceo-avoided-mass-lay... There will come a day when the current management ethos becomes unfashionable and mass layoffs become a sign of failure and poor executive management, but unfortunately the market rewards it right now, and ultimately products and employee quality of life are secondary concerns to our rather sociopathic business cycle. Forgive my diatribe. I have developed quite a passion for this issue over the years, as my training taught me all about layoffs and how to do them, but after running companies for a long while, I’ve become quite unhappy with “business as usual.” This system sucks, and it’s causing massive breakdowns in trust between employees and employers that ultimately cause irreversible harm to actual global competitiveness. The system people live and work in has to be in those people’s best interests to proliferate and ultimately needs to align profit with the best interests of society. In my mind, the long term concequences of the current system’s breakdown of trust is devastating to everyone involved and counterproductive to lasting global competitiveness (which requires cooperation, teamwork and a growth mindset these adversarial conditions cannot foster), and yet we happily pedal along as if everything is fine. It’s not.

deleted 3y ago
[deleted]
xdavidliu 3y ago
what do you mean by “earnings per staff member laid off”? are you dividing their total earnings by number of staff laid off? if so, then Apple earning 100 billion while laying off 10 employees would be “earning 10 billion per staff laid off”, or am i misunderstanding?
deelowe 3y ago
Wow... This all seems a bit cherry-picked... - The google metric doesn't make sense. In fact, the graph tells sort of the opposite story. Revenue per employee shot up and then they did layoffs in response... huh? My guess is that this graph is missing the forecasts that are being used to make these decisions. Google likely has a similar chart, but one that goes out 5-10 years and is showing a concerning trend (that was certainly the case when I worked there). - Austerity is a government thing. I'm not connecting the dots between deficit reduction and corporate layoffs... - I thought the money supply calculations changed recently which is why the metric shot up in recent years. - How are you getting Microsoft was rewarded with 9.8M per employee for their "layoffs?" They cut 10k people, so wouldn't this mean if they had laid off 1 person, they would have earned 98B per layoff? This metric doesn't make sense. - The "other CEO" you link to runs a company with 200 employees. I'm not sure this is comparable to a company the size of Google.
matwood 3y ago
Companies aren't charities. Just because they can afford to hire or keep an employee doesn't mean they should or have to. You're also forgetting that raw dollars are not how companies are viewed. Every company is viewed on how it performs agains the risk free return rate. The rate going from 0 -> 5+ means companies must now generate returns in excess of the RFR in line with their generally accepted risk. This is the ultimate outcome of raising rates to reduce inflation - across the board layoffs lowering averages salaries.
- ParetoOptimal 3y ago
  Companies aren't charities, but if they don't act charitably towards employees it's a bad deal for employers and employees. I think that was their point. To not be taken advantage of employees are incentivized to do as little work as possible.

somedude895 3y ago

> and products of the company are a shit show I guess we'll see if this turns out to be true. If it does, they'll realize their mistakes, and the competitors that didn't let people go should outperform them. If it doesn't, then it'll show that many tech companies simply overhired, which I think we all know they did over the past few years. I myself work at a telco where business has stagnated over the past decade, due to market saturation and new, cheaper competition. We've had layoffs each year since I started since that's the only way to keep increasing profits. One day it'll probably hit me, but oh well. I know our company has fat to trim and if I'm actually not making any real impact, then I'm fine with looking for a job where I do. Efficient companies are important for a healthy economy.

pyrale 3y ago
> I guess we'll see if this turns out to be true. https://killedbygoogle.com/ https://killedbygoogle.com/
- asadalt 3y ago
  surely you don’t want google to maintain 100s of experiments indefinitely.
  - x86x87 3y ago
    It's not about killing experiments. It's about things that were advertised as the next big thing with fanfare to not be properly maintained and eventually killed even though they had a lot of users. That's the problem.

closeparen 3y ago

By any reasonable metric, Google SWEs are "the rich man" in American society.

rvrs 3y ago
This isn't the right way to view it -- it's not necessarily about a dollar amount. People making 6 figures and people making 5 figures are not enemies. The segmentation is between those tho provide work and those who perform it, with the former profiting off the surplus value provided by the latter
- closeparen 3y ago
  Who do you think owns public companies?
  - rvrs 3y ago
    Are you insinuating that the workers (or the public) have the ability to self-determine through share ownership? You are aware that Alphabet stock is split, with the class B shares being owned by the founders, right?
    - closeparen 3y ago
      Public company stocks need to go up because that's how millions of people with economic profiles not dissimilar to Google SWEs fund their retirement.
  - lancesells 3y ago
    The top 10% of americans own ~90% of stocks. I think the top 1% owns somewhere around 45% of those stocks.
    - closeparen 3y ago
      Do you think FAANG SWEs aren't in the top 10% of Americans? Investors aren't some distinct class, we're mainly talking about pension funds and the 401ks of similarly well-compensated professional-managerial workers.