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TIL that nobody knows what they're doing. Jokes aside, how do you end up having more than 500 excess people than what you need? What is management exactly doin

• bhouston 2y ago
  Dropbox is public and has actual profits. I think your comment is not accurate. Instead I think the company has plateaued in growth and thus they need to cut back spending otherwise they will have falling profits and no growth - which is worse than just no growth.
  • toomuchtodo 2y ago
    Are their targets reasonable? Or are they reaching for fundamentals that don't exist as a storage utility? (Dropbox customer, pls just sync and store my data reliably) Edit: Reply was as I expected, thanks bhouston, agree they are potentially at the mature stage
    • bhouston 2y ago
      If you don’t have growth you have to treat this as a PE firm would. You cut spending to a minimum while ensuring you keep your customers, thus maximizing profit to assets ratio. A lot of companies do not have growth but are great money machines. It may be that this is the mature stage for Dropbox.
  • osigurdson 2y ago
    Yeah, I just had a look at dropbox stock. I would have expected permanent cash hemorrhaging, but no they have a P/E of 15.
    • avgDev 2y ago
      That is actually quite good. I am surprised.
      • voisin 2y ago
        A P/E on its own is not good or bad. If the company’s earnings are in decline you would expect a low P/E, and if they were growing aggressively then you would expect a high P/E. It is only when there is a mismatch when the ratio becomes interesting. I am not saying it isn’t interesting in this case but the comment you are replying to does not tell any information that would lead to the conclusion it is “quite good.”
        • bhouston 2y ago
          Yeah if there is no growth but a lot of earnings the stock should probably start to pay dividends no? Otherwise what is it doing with all that cash it is generating?
          • voisin 2y ago
            100%. Doesn’t even have to be zero growth - just growth less than investors want to see, as implied in the P/E ratio (since investors control the P).
• aprilthird2021 2y ago
  > how do you end up having more than 500 excess people than what you need? Not sure if you are serious or not, but understanding the output of knowledge workers is a famously difficult task.
  • FirmwareBurner 2y ago
    >understanding the output of knowledge workers is a famously difficult task That's why large companies don't look at individual worker output (performance reviews are mostly performative and subjective) and just look at stock prices and profits. If "line goes up", it means workers as a whole must be doing a good job , even if individually many might not be good at their jobs, but as long as line goes up, nobody cares to look too deep into the hows and whys. If line stops going up, then they start laying them off more or less randomly or forcing RTO, or such things regardless of individual performance.
  • jumping_frog 2y ago
    I have a offtopic but related question. Why are our taxes still calculated in stepwise bracket manner. Why not a smooth curve? We have the mathematical and technical knowhow to implement it. Coming back to the Dropbox layoffs, why was this decision a drastic stepwise reduction. Not a smooth curve over a period of say 1 year.
• colechristensen 2y ago
  If you're running a SaaS that isn't customer-interaction heavy, you can usually get away with dropping about 80% of your technical staff (if, of course, you pick the correct 20%, which is not easy). Having worked in several startups through the early growth stage, it's just surprising how much you don't get more done with, say, a 500 employee company than a 50 employee company. There is a ton of room to grow less and maintain more, and it's a real struggle for a business to decide its product is done with major growth and the associated need for a large staff.
  • ToucanLoucan 2y ago
    Staffing your business (or even team) with the right number of people to accomplish a job is a real challenge that the majority of managers don't engage with, instead simply trying to grow their little kingdom to the largest size they can, both for intrinsic power reasons, and also to foster greater jobs for themselves later on. If I see a manager put "led a team of 40" on their resume, in the interview, I ask "did you need 40 people? Did you need more, did you need less, and how would you have found out?" and the number of times this completely catches them off guard is staggering. It's like... did you choose that number for a reason? Or was that just the most you could fit in your budget? And sure many hands make light work, but there's an inflection point where the sheer weight of your organization becomes a liability, where getting anything done or changed requires the involvement of so many people that most just don't bother unless it's an emergency. That's how you get corporate rot, and that's how you get all the massive companies we rag on here about all the time who have been making like, 5 products since before most of us were born that everyone fucking hates but everyone uses because everyone else does.
    • higeorge13 2y ago
      Yeah but usually these people are top candidates and occupy the other engineering manager positions, and you, managing a super productive team of 5 or 10 instead, don't even get into a single interview there. And that applies to every single company I have applied to.
    • colechristensen 2y ago
• voisin 2y ago
  > Didn't they at some point see that they have more people than valuable work Product roadmap probably had some ambitious ideas that got scrapped when earlier steps proved to not be marginal revenue generators. Jobs said it best: Dropbox is a feature not a product. All their efforts to make it a product (let alone a platform!) have worked against usability and alienated a lot of users. I am hopeful these layoffs signify a return to sanity in a company that seems to be leading the charge in racking up unforced errors.
  • tootie 2y ago
    They were (I think) first to market with fast, cheap cloud storage but at this point there's just too much competition and not enough differentiation. I have only the vaguest awareness of them trying to build some value adds to make Dropbox more of a collaboration tool, but I've never seen it get any adoption. I'm guessing those are the LOBs getting cut with this announcement.
    • voisin 2y ago
      I switched to OneDrive when it started getting bundled in free with Office 365. I also tried iCloud when it came in the Apple One subscription. Both are total shit compared to Dropbox. The sharing in iCloud is nothing short of laughable and OneDrive is just buggy Microsoft garbage (on my Mac - might be better on Windows). I am planning to move back to Dropbox which says something - I’d rather pay than use competitors’ products that come to me for “free”. That said, I’d rather the company stick to its fundamentals with no further feature creep and focus on lower subscription cost rather than features to justify higher costs.
• throwaway313373 2y ago
  I mean, imagine that you are leading a team of 4 people. Are you sure that you will always be able to accurately tell if you need a fifth person or not? Or you have a team of 5 people. Can you tell if you have a one too many?
  • tyingq 2y ago
    Maybe not. But typically natural attrition rates would let a hiring freeze take care of most of this. Layoffs are kind of normal current day, but a 20% layoff is not.
    • oldpersonintx 2y ago
      [dead]
    • throwaway313373 2y ago
      The common argument against relying on natural turnover rate is that the most competent workers are also those who are the most likely to leave because it is easier for them to find a new/better job. So if a company just freezes hiring instead of doing layoffs it will experience a reduction in the competence of their workers. I don't know if this is empirically true or not, I haven't seen any statistics. But I don't see any obvious logical errors in this reasoning.
• spamizbad 2y ago
  People are hired to deliver what's on product and/or engineering roadmaps. If the roadmaps are less ambitious, it becomes pretty easy to justify headcount reductions. It's also less labor intensive to focus on a few core areas, making smaller incremental improvements than doing that PLUS launching big ambitious greenfield projects. Also, remember how people used to say "Startup X is a bad idea because <established tech company> could just clone you in 6 months"? Well, those ideas are now back on the menu for entrepreneurs because bigger tech firms are now running too lean for quixotic defensive plays like that.
• cj 2y ago
  > Jokes aside, how do you end up having more than 500 excess people than what you need? It's actually a pretty simple risk/reward equation. The risk of understaffing a company is greater than the risk of overstaffing a company. If you overstaff a company, the solution is quick and easy. If you understaff a company, the solution is extremely painful and takes a very long time to fix. E.g. it takes 1 day to fire someone, but 9 months to hire/onboard someone. So to ensure the staffing isn't a bottleneck for growth, the obvious answer is to err on the side of overstaffing. TLDR: You need to hire and onboard people before you actually need them. If hiring and onboarding someone takes 9 months, you need to guess how many resources you'll need a year from now, and hope that your estimation is accurate. (And obviously a lot of companies over-estimated how many people they would need, hence lay offs)
• wakamoleguy 2y ago
  It has been even more than 500 excess employees. 300 were laid off in January 2021, and another 500 in April 2023. The percentages imply that headcount bounced around from 2800 down to 2500, up to 3100, down to 2500, up to 2600, and now down to 2100. These same macroeconomic headwinds have existed for some time now, and the fundamentals of Dropbox’s core business commoditization haven’t changed for the better.
  • tonyedgecombe 2y ago
    I wonder how many staff they need just to keep the lights on. I bet it's not more than a tenth of what they have now.
• elif 2y ago
  This is literally every startup I've ever worked for. Grow before you need to, constantly expand your market. This is like 101 stuff
• golol 2y ago
  I suppose it is the following: 1. Maybe they didn't over-hire but instead the economic conditions changed. 2. Maybe instead of gradually letting go of people it is best to wait and then strike once and hard.
• uhtred 2y ago
  The problem is we live in a society now where everyone has a public platform to promote themselves (linkedin etc) and there are a lot of ruthlessly ambitious narcisists who put self promotion and resume building ahead of everything else. So they muscle into a team lead or manager position and grow the team, because it looks good to post on linked in "hey I'm growing my team" and it doesn't matter if the team needs another person. And who cares if the company is then stuck with surplus employees, not the person who hired them because they have moved on and up at another company.
• coldpie 2y ago
  > Actually, I know why. It's because they have too much money Money was almost literally free for like a decade. I'm so glad that era is over, and I hope it never returns, but the period of adjustment as businesses discover that they have to actually have a business model again does suck a bit.
  • stevenAthompson 2y ago
    Forgive my ignorance, but why would very low interest rates ("almost free" money) be a bad thing we want to avoid? Isn't it for best if society keeps interest gathering, rent seeking, behavior to a minimum and instead encourages that more of the available capital is put to good use?
    • coldpie 2y ago
      Because having a functional business model is what defines whether the use of capital is good or not. Bad outcomes from low interest rates are all these layoffs from overstaffing, all the wasted human-years on blockchain & NFT garbage during 2021, VCs blowing money on obvious failures like Juicero, etc. These are not good uses of capital, and if they had to have a real business plan to get capital in the first place, it would not have been wasted.
      • stevenAthompson 2y ago
        > These are not good uses of capital I suppose it depends on what the alternative was for that capital. Sitting in an index fund wasn't really doing anything useful for society, but providing high paying tech jobs to dropbox employees was probably very useful to society. Especially when you consider all of the downstream impacts of those employees spending. Similarly, I would ask if society gets more good out of transferring the wealth to crypto-bro's or from it sitting in relatively low yield investment vehicles? I would wager that the crypto bro's buying lambo's acted as a better economic stimulus than non-productive interest gathering. Now if the choice had been between investing in "good" businesses vs "bad" businesses I would agree, but I don't think it was.
• mrthrowaway999 2y ago
  > Actually, I know why. It's because they have too much money and when you have too much cash, you start splurging without thinking and then one day the chickens come home to roost. This is an incredibly uncharitable and shallow take, on the level of that comment many years ago that said something along the lines of "what's so interesting about Dropbox? It's just rsync, I could build it in a weekend". We don't operate in a perfectly legible world, especially more so when it comes to people. It's all bets and risks and whatnot. If you or anyone has the power to create perfectly aligned and efficient organization, I'm waiting here to see you build large multi-trillion dollar companies. Let me know how it goes.
  • yojo 2y ago
    My understanding is DropBox was trying to transition from sync and share to being a multi-product document-centric company (look at acquisitions like HelloSign). One possibility is they staffed up a bunch of projects on bets that ultimately didn’t turn into viable products, and are now pulling the plug.
    • FirmwareBurner 2y ago
      More like the cloud sync functions out of the box on Google, Microsoft and Apple products caught up in features and already got good enough for the customer base of these to not bother paying extra for Dropbox no matter how much better they would have been. See Evernote. It's difficult to go against Apple, Google and Microsoft when they're vertically integrated and can squeeze you on all sides offering an OS, email, browser, cloud sync, document editing, etc with seamless integration between them, while you're just a cloud sync service on their OS. You don't have any moat, while they do. There's no way you can compete with them from that position unless the government were to break up their vertical integration for anti-competitive practices.
      • disgruntledphd2 2y ago
        For me, Dropbox's moat and USP is that they make all of their money from file storage, giving me some confidence that they'll ensure it keeps working. That's definitely not something one can say about their BigTech competitors.
• krisoft 2y ago
  > What is management exactly doing during the time they went from 1 excess person to 500? It is usually not the case that these people are standing around and doing nothing. It is more that they are working on initiatives and projects which the company is discontinuing now. When the company has a lot of money investors expect them to spend some of it in finding new directions and opportunities. It's not all just spent on keeping the lights on, and the servers humming. If they don't do this people in 3 years will be asking "What has Dropbox been doing all these years?" If they are doing it right you are just amazed by the steady trickle of new features and services, and improvements which keep the company relevant in the years to come.
  • lokar 2y ago
    Also, factors like quality, maintainability, performance, etc are open ended and hard to measure. So teams tend to just keep improving them. Some amount is critical, some is important, some is nice to have and some is just excess.
  • Ekaros 2y ago
    Sometimes I think that tech world has been after "growth" for too long. Instead accepting that at some point companies are reasonably mature. After which they can do more incremental development with lot less head count growth.
  • mateus1 2y ago
    That’s such a naive take. For the past 5 years at least these layoffs are not about particular projects being discontinued or even improving the bottom line. This is about how people are expendable and their priority is investors.
• a0123 2y ago
  > Jokes aside, how do you end up having more than 500 excess people than what you need? There never is an excess amount of workers (sure, there probably are 4-5 exceptions). What happens is that they need those employees, but instead are going to demand that the employees that are left pick up the slack. Which they will because they need a roof over their head. Those companies are merely cutting costs, they don't actually have any excess employee.
  • mikeweiss 2y ago
    It's not black and white like this. There is such a thing as having to many employees and such a thing as having too little. I think realistically, most of the time, it's a mix.
  • deleted 2y ago
    [deleted]
  • jumping_frog 2y ago
    Maybe they developed all the features they thought were necessary and now can manage the features with less workforce.
  • briandear 2y ago
    Or they hire Accenture.
• bottom999mottob 2y ago
  As a recent example, when you have "the great resignation" of 2021 turn into (in my view) "the great hiring" of 2021 followed by the Silicon Valley Bank collapse of 2023, it's obvious that hiring managers just follow what is trendy. Obviously past results do not guarantee future, but what the masses follow is generally a recipe to disaster. I think that's why we're seeing the return/visibility of stacked ranking. Management theorists see one successful company trive or a former successful company fall, and then everyone follows suite because they're "data driven," not driven by first principles
• artyom 2y ago
  In my experience a lot of hiring in those big or publicly traded companies is to "build the structure to get promoted". When you're big, investors and banks and auditors don't like flat structures with a lot of individual contributors. A vertical structure is a must to go public. The rest is people playing the game they're forced into.
  • FirmwareBurner 2y ago
    >In my experience a lot of hiring in those big or publicly traded companies is to "build the structure to get promoted". This comment should be at the top. Not just at the top of the thread, but at the top of HN homepage. It's how during the pandemic many companies just suddenly doubled their headcount without any extra output in products or quality, and now we're seeing somewhat of a correction to that with all the layoffs. It's how you see people in tech hubs climb to the top of some large companies despite never having worked longer than a year at any company. Nothing against job hopping but I ask myself what skills and value people like that actually bring, who have 10x 1-year of experience, as they're never in a place long enough get to see the end results of their work and decisions, if they're good or bad, they barely pass the onboarding stage. It's also how many of these large orgs end up failing long term. Look at Intel now, or german auto makers, as the goal of each worker there becomes gaming the system to getting yourself a promotion at the cost of the org as a whole, instead of adding value to get a promotion, since the org is very bad at setting the right goals and incentives for the workers. Google and the like who have a monopoly with an impossible moat or an infinite money cheat can resist this enshitification much much longer than the rest of the companies. I'm not even mad, in the end most people are just playing the game, they don't get to write the rules of the game, and the ones who do are out of touch with reality so they can't be mad when people try to game it for their personal advantage.
  • fakedang 2y ago
    > When you're big, investors and banks and auditors don't like flat structures with a lot of individual contributors. A vertical structure is a must to go public. The rest is people playing the game they're forced into. Might be the first time I've heard this hot take out. What makes you think banks care what the org structure is for a public company? Banks don't care for size as long as the company is fiscally prudent and can prove it. They do check silly metrics sometimes like revenue per employee, but they really don't give a damn how your company is structured. By that metric, 2012 frat club Facebook wouldn't have been touched - yet they had like 10 investment banks frontrunning their book. In fact, I'd say 2012 Facebook IPO was the trigger for a lot of banks not caring about such silly things. As a counterpoint to your argument, there are 200-500 employee biotechs not generating meaningful revenue that are trading publicly (and which went public without a SPAC play). The decision on who gets to go public falls on the exchange, not on the banks - they simply sell your stock to their investor list, and a flat structure with fewer than needed employees is actually a great selling point for a bank.
• bluedino 2y ago
  Most companies have a bunch of people who are literally doing nothing.
  • toomuchtodo 2y ago
    Conversely, I also know folks where everyone is redlining in the org because they cut deep and folks who can leave are able to leave for equivalent or better roles. The market isn't great, but it isn't 1999-2000 or 2007-2009 either. If you want another job, make it a job to find it, and you will eventually find it.
• jsbg 2y ago
  > Jokes aside, how do you end up having more than 500 excess people than what you need? If you bet on growth/new features but your current and future customer base are going out of business or downsizing and you have to switch to more of a survival strategy.
• mschuster91 2y ago
  > Didn't they at some point see that they have more people than valuable work, and maybe we should deal with that problem instead of hiring another team to place even more bets? Well, part of the overhire spree was to prevent other companies from hiring the talent. IMHO, that's both disgusting and abusive.
• TechDebtDevin 2y ago
  Labor = KPIs not People.
• flappyeagle 2y ago
  how about you estimate a software project to within 20% accuracy? I've never seen it happen once for anything beyond the most trivial thing. have some humility buddy
• wslh 2y ago
  > Actually, I know why. It's because they have too much money and when you have too much cash, you start splurging without thinking and then one day the chickens come home to roost. But that view might oversimplify things from a business perspective, especially beyond the case of Dropbox. When a company has ample cash reserves, a common strategy is to leverage the opportunity cost. This can mean growing the team or investing in ventures with both planned and unplanned outcomes. Take Microsoft or Google, for instance: both have a long history of projects and acquisitions that might be considered failures, but these bets were possible because they had the resources to try, even if some failed to pay off. This approach acknowledges that some investments will succeed, while others are simply part of exploring new growth avenues. Time is the resource that you cannot recover.
• jeswin 2y ago
  > Jokes aside, how do you end up having more than 500 excess people than what you need? Twitter fired 80% of their staff; and they've been releasing features faster than when they had 4x more people. I suppose work can expand to occupy whatever available headcount - nobody cares whether it's useful work or not.
• CharlieDigital 2y ago
  What is a fiefdom without serfs?
• danity 2y ago
  There is a tendency for managers at big tech companies to want to hire regardless of need and "build an empire", so they can then say on LinkedIn that they managed n number of people. Then they will move to another big tech company, rinse and repeat. At these companies, the more people you manage is translated by higher ups to responsibility and salary. There isn't much reward to keep a team small, focused, and efficient.
• ryandrake 2y ago
  > Jokes aside, how do you end up having more than 500 excess people than what you need? This question always gets posted to HN, and is always the top comment whenever an article talks about how many people Company XYZ has. It seems like a lot of people just have never worked for a company that's growing (in terms of both profit and the amount of _stuff_ they are trying to do). Companies' need for people grows quadratically in proportion to the amount they are trying to do, not linearly. If it takes a staff of 20 to deal with 2 "units of work", it's going to take many more than 40 to deal with 4 units, more like 80. For 10 units of work, we're talking a staff of 500. You need all of these people to manage all of the growing internal network of complexity and yes bureaucracy that forms whenever you need to get people to work together. For every N people you hire, you'll need a manager to manage them, and for every N of those managers, you'll need a second level manager, and so on. You also start needing to actually deal with legal and regulatory compliance (rather than the yolo approach most startups take), you need to deal with HR and payroll for all these new people, you need to deal with power-of-2-scaling training and internal documentation needs. And all of those people you hire to do these things need their own managers and on and on and on. I've never seen a company successfully scale what they are trying to do without needing a ton of people. Maybe every company I've ever worked at is just inefficient but I don't believe it.
  • faramarz 2y ago
    And not to mention acquisitions come with their engineers, sales staff, support and management crew. The leadership should have been rebalancing yearly and quarterly in small chunks so they’re not in a position like this. It’s also a strategic play, while they come out with their major AI move next. That’s my guess. Gotta satisfy that board somehow
  • Y_Y 2y ago
    > This question always gets posted to HN, and is always the top comment whenever an article talks about how many people Company XYZ has. Perhaps because there hasn't been a good answer yet. > For every N people you hire, you'll need a manager to manage them, and for every N of those managers, you'll need a second level manager, and so on. But clearly that's not absolutely necessary, because already we know that two uncoordinated companies can make 4 units with 20 staff each. If the second level manager isn't providing enough value in terms of eliminating duplicated work then they shouldn't be hired. Of course diminishing returns are going to set in, and bureaucratic inefficiency is a law of nature, but I see your answer as more shallow a dismissal than the question deserves.
• dragonwriter 2y ago
  > Jokes aside, how do you end up having more than 500 excess people than what you need? Because circumstances change and evaluation of projections and optimal employment numbers under them change, and it's never optimal to hire enough people to actually assess that with minute-to-minute updates. > There's something to be said about spending within your limits and not splurging on the next shiny object. There is something to be said for hiring and cutting slowly rather than rapidly in response to changing circumstances, and that is that, under the material incentives in a competitive capitalist economy, it is a poor strategy for a corporation. > Way back when it was called cost control and operating within a budget. Guess what happens quickly when you are good at operating within a budget and the projections on which the budget is based changed and so the budget changes going forward?
• alwayslikethis 2y ago
  > how do you end up having more than 500 excess people than what you need The Law of Multiplication of Subordinates: > we must picture a civil servant called A who finds himself overworked. Whether this overwork is real or imaginary is immaterial; but we should observe, in passing, that A’s sensation (or illusion) might easily result from his own decreasing energy—a normal symptom of middle-age. For this real or imagined overwork there are, broadly speaking, three possible remedies > (1) He may resign. > (2) He may ask to halve the work with a colleague called B. > (3) He may demand the assistance of two subordinates, to be called C and D. > There is probably no instance in civil service history of A choosing any but the third alternative. By resignation he would lose his pension rights. By having B appointed, on his own level in the hierarchy, he would merely bring in a rival for promotion to W’s vacancy when W (at long last) retires. So A would rather have C and D, junior men, below him. They will add to his consequence; and, by dividing the work into two categories, as between C and D, he will have the merit of being the only man who comprehends them both. source: https://www.economist.com/news/1955/11/19/parkinsons-law https://www.economist.com/news/1955/11/19/parkinsons-law
• corry 2y ago
  Huh? It's obvious to almost everyone that Dropbox is in a tough position in that it's largely failed to expand its offering beyond the very original product and value prop, which is also being eroded by the other major players. So they attempted to use DB's position to leap-frog into new product categories, which require big spend on R&D and related teams, as well as new heads for supportive teams (sales, marketing, support, etc). It's not working, so they are pulling back and re-trenching. That all seems pretty transparently NOT a "having too much money" problem.
• deleted 2y ago
  [deleted]
• ben_w 2y ago
  > Jokes aside, how do you end up having more than 500 excess people than what you need? One of my dad's anecdotes, back when he was alive, was when he was interviewing someone for a job. "Why did you leave your last position?" "After six months, management noticed my entire floor was doing the same thing as the next floor."
• rsynnott 2y ago
  > Jokes aside, how do you end up having more than 500 excess people than what you need? Often with this sort of thing, the company is essentially sacrificing future revenue to cut current costs; projects get delayed or cut, but, hey, the balance sheet looks better for a bit! The other reason it happens (and here the cuts would mostly be operational and sales) is if the company just isn't getting as many customers as it had expected.
• slightwinder 2y ago
  > Jokes aside, how do you end up having more than 500 excess people than what you need? What you need can change over time. As I remember, Dropbox acquired a bunch of companies of the years, so maybe some of them originated from there. They also had many new products and tried to move into new directions, which probably also brought many new people.
• anon291 2y ago
  As a former engineering manager this is obvious, in my opinion. Companies don't really like laying people off and PIPs are long and require work. If someone is underperforming, hiring a new person is easier. Alternatively, instead of retraining someone, hiring a new person is easier, and you just keep the old guys around doing whatever. Plus, once in a while they might actually offer something (they typically are very knowledgeable about past decisions) Given how much money there is in these industries this strategy works for a long time. The alternative is a harsher work environment that is common in other fields. Despite the popular belief on this forum, tech work has some of the most genteel management of all industries.