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The thing that bothers me most about layoffs due to “financial difficulties” is when you observe management wasting absurd amounts of money on something in one

The thing that bothers me most about layoffs due to “financial difficulties” is when you observe management wasting absurd amounts of money on something in one year, then announcing the following year that they have to make cuts to baseline, “low level” employees that don’t cost much at all. This kind of managerial behavior seriously kills employee motivation, because it both communicates that 1) no one has job security and 2) that management is apparently incapable of managing money responsibly. “Sorry, we spent $200k on consultants and conferences that accomplished nothing, so now we have to cut an employee making $40k” really erodes morale in ways that merely firing people doesn’t.

mclau156 2y ago
not a single comment about overpopulation?
mk89 2y ago
That's because they have a budget which is planned ahead (e.g., 2024 for 2025) for everything. Typically if the company is really in financial trouble, they will also NOT use the pre-allocated budget which was not yet spent (=200k for company events, although the budget for such things was planned and approved last year). I have seen companies actually taking care of finances (both firing people AND blocking useless events) and I have seen companies doing what you said, which creates pure hatred.
- keiferski 2y ago
  Right, which is more indicative of how yearly budgets which don’t factor in continual employment of staff lead to the morale decline I mentioned. Perhaps the manager isn’t actually capable of doing much about it, and can only spend or not spend their budget. But that indicates a failure in the company as a whole; at least if keeping employee morale high is a goal (which it definitely isn’t at many companies.) Even then, the mismanagement of funds just communicates a level of incompetence that is more demotivating than cuts from an actual lack of funds, IMO. “Sorry, the market has shifted and we can’t afford this,” is at least somewhat understandable when you have trust in management’s ability. When you don’t, it comes unpredictable and chaotic - never a recipe for getting good work done.
  - mk89 2y ago
    I agree. Mismanagement of funds is one of the worst things. Is it pure incompetence? Or is that they don't give a damn and that "let's get together 500+ people for a fully paid weekend" is too cool to cancel? ...like better an egg today than a hen tomorrow. I mean, they don't get affected anyways, they do get the egg and hen...!
    - number6 2y ago
      Playing devil's advocate: Firing people has a huge financial impact - around $100,000 per person per year. The event only cost $50,000 once. So it might not be that significant, and at least the staff gets to enjoy a nice event. Why eliminate both when the event's cost is equivalent to just half a position?
      - mk89 2y ago
        I think it has more to do with the psychological effect than with money itself. We're used to think that in difficult situations you cut the useless "fun" expenses. When that doesn't happen in a company, people blame it on management that already "moved on". It has to do with how people perceive a company and with all that culture that has been pushed down our throats for years, with "We're a family" and things like that. It has also to do somehow with showing some respect...
      - IggleSniggle 2y ago
        This one's easy. Because you value your people more than the parties they can throw. The cost/benefit are not just monetary. If they were, the event would have no reason to happen under any circumstance. You fire someone because they are hurting the company? That feels like a company that cares about doing well. Event seems more okay, and there's no reason to question the financial cost if the org seems to be doing well. You layoff someone off because you're tight on cash? Tell everyone you only hire top performers but had to let a top performer go because of budgetary reasons? Feels gross to throw more money away when you're already making "hard" decisions about letting quality people go.
- codr7 2y ago
  Let's hope the budget includes success then...
vasco 2y ago
Also mostly it's speculation of an accepted kind. Executives can say, listen we have these initiatives, I think they will print money next year, so based on this prediction I will raise the budget for the FY. Then when the prediction of revenue fails, you do cuts, oh well you were wrong. But next year you can do the same thing. Game theory wise this works because if you're right, you bet big, hire big, are ahead next year vs your competitors that invested less. If it goes wrong you are seen as a serious executive that has the courage to have layoffs when needed, and if your market is ebbing your competitors will also be suffering somewhat. It's also easy to make the next year prediction be whatever you want since in a small company it's just you saying a number that the board doesn't think is too outrageous and in a large company involves you asking an analyst to increase the word of mouth factor of their model or whatever.
- bodegajed 2y ago
  This happened to a friend of mine. Executive made far-fetched PowerPoint slides and tried to raise a budget, the board loved the powerpoint. They restructured, the company laid-off dozens, and hired new foreign contractors. Because past engineers got the blame, and the legacy code. They rewrite from scratch using X this time. Massive failure because of poor morale, brain drain and over-ambitious features. So what now? well let's do another round of layoffs, make new powerpoint slides and repeat the same process.
- marcosdumay 2y ago
  Oh, those hyperspecialized employees that can only work in one project and could never do the exact same thing if the thing's goal changed... And yeah, those quick to materialize gains, where the manager can easily discover if a project worked within the same fiscal year... Also dragons and unicorns, I guess... what a world those people live in!
- bluGill 2y ago
  That is the problem with presentations of all sides - doesn't matter if it is power point, a blog post, a NYC article, government report, a documentary, or something else. Whoever writes it gets to choose what arguments and facts to bring out. However listens to it is generally primed to think it is correct and not ask hard questions - often they don't even know what the hard questions would be. And so garbage gets approved all the time because it looks good.
wisty 2y ago
Managers have a budget. They can't save it, and may spend big on consultants to create a buffer for their team when cuts hit. This is especially true in government, and big companies are similar. There is only one person who really can stop cycles hitting budgets and that is the CEO. IIRC Warren Buffett lamented the fact that the CEO is more of an investor than a manager and that spending budgets as a senior manager gives them almost no experience in setting those budgets.
- iovrthoughtthis 2y ago
  budget based economics may be the worst thing to happen to large organisations
  - IggleSniggle 2y ago
    Suddenly I'm connecting the relationship between "budget based economics" and "agile" as commonly implemented. It's trying to fit creativity into a budget. In the places that do it well, it's like "We're supposed to make some really great art, here's the crayons we can afford, sorry if it's not exactly right but it's what we could manage, do whatever you can, we will take it!" In places that do it poorly, it's like "we need you to make the Uber of the Mona Lisa, I'm gonna need you to find a way to make that work, but we can totally be flexible on this, which crayons do you need." The key differences being that in one case there's well defined constraints on resources but open ended results, and in the other the resource constraints are poorly defined but the end result is much more fixed.
    - codr7 2y ago
      Worse is trying to fit creativity into a tight schedule. Everything gets corrupted, today's agile is way worse than what came before in practice.
  - bmitc 2y ago
    I have never even understood the approach. The sub-budgets within an organization seem so arbitrary and become games in and of themselves, often leading to frivolous purchases just to use up the budget and not get your budget slashed. Does anyone know when this came into favor? What was used before? What are the alternatives?
cies 2y ago
Everybody makes mistakes. Higher up in the company (or goverment) mistakes are usually more expensive. Painful, but I see no way around this.
gherkinnn 2y ago
Surely this is a question of having skin in the game, where management is all game and employees all skin. If the clowns making decisions would get hit by bad ones, things would look differently. You now, actually "taking full responsibility".
- deleted 2y ago
  [deleted]
jojobas 2y ago
They don't spend $200k on consultants just because it's fun. They do it when there are already difficulties in figuring out how to productively use the employees who make $40k (say 20 of them). This is not to say managers don't make stupid decisions, but they are more like bets. Somewhere between the fall of Nokia and the hit of iphone are thousands of decisions that lead to hiring or firing some 10-100 people.
mrweasel 2y ago
> Sorry, we spent $200k on consultants A former employer decided to freeze pay for a few years and later later start laying off people. During the pay freeze a colleague suggested that we might save a significant amount of money by hiring staff, rather than paying the large number of consultants we had hired. I think the ration was something like getting rid of two consultants would free enough money to hire three developers. Managements take was that we should keep the consultants, because they where much easier to fire, two weeks notice, compared to four. So it was "better" to have consultants. My colleague pointed out that the majority of our consultants had been with us for 5+ years at that point and any cancelling of their contracts was probably more than 4 weeks out anyway. The subject was then promptly changed. In fairness to management large scale layoffs did start 18 months later.
- jddj 2y ago
  Outside of the US this optionality does have some value to deserve at least some premium. Hire an extra dev for the same money looks good on paper, but employment being the trapdoor function that it is in some jurisdictions does muddy the water. (I do understand that there's a historical context to keep in mind, and that the relationship is often asymmetric in the other direction as well)
  - mrweasel 2y ago
    > but employment being the trapdoor function that it is in some jurisdictions does muddy the water. Absolutely, I should have clarified, this was in Denmark. Laying off someone is pretty easy, unless they happen to be pregnant, a union representative or work-place-safety representative. And I should know, I was laid off from a job after two months because they decided that they didn't have the budget anyway.
    - varjag 2y ago
      Two months in much of Europe is within 6-month trial period, it's easy to let anyone go.
  - yobbo 2y ago
jorvi 2y ago
One that is functionally different but causes the same type of morale hit is managers and upward equipping themselves with fully loaded MacBooks and iPhones, but equipping rank-and-file employees with shitty Dell laptops and budget tier Android phones. That happens more at traditional companies than tech companies, but it immediately signals that it's a crappy company steeped in "rules for thee but not for me" culture.
TikTikFook 2y ago
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skirge 2y ago
"low level" do count in stats if need to show "savings" and can be easily replaced when needed. Also they do not generate profits but need resources (mentoring etc.). On the other side costs are tax deductible.
markus_zhang 2y ago
It's just normal late Capitalism syndrome - no one takes responsibilities, and everyone, at least everyone that is close to the trough tries to get his/her head into it. From politicians to corporation managers to civil servants, it's everywhere. That's it.
ClumsyPilot 2y ago
> management is apparently incapable of managing That’s frequently the fundamental issue really. Measuring a developer’s productivity as an IC is fairly easy. Measuring quality of manager’s decisions is tricky
- InDubioProRubio 2y ago
  Lets just add a metric (like loc or stockprice) - that will solve things. Gambling metrics will continue till lipservice improves.
EGreg 2y ago
Um, I have seen irrationality all across the board. Market participants shooting themselves in the foot. I have seen investors not invest even $10K into a project and then line up to invest far more for the SAME amount of shares. When you apply for jobs, you see recruiters (who get commission from placements) tell you that your background isnt a fit when it is a perfect fit, and prefer to not show candidates. I have even explained to recruiters that there is an opportunity to represent the candidates, like a Hollywood agent or like a seller agent i Real Estate. That the candidates would also pay a commission out of their salary, if placed in a job they actually like. And that all they have to do is call their counterpart recruiter and vouch for the candidate, which usually a quick call. But most are stuck in their ways and don’t want to tap new opportunities, no matter how easy. To their credit, some are not. And so, it is no surprise to me that businesses waste money and then cut their task force. Many of them don’t care about you, but expect you to care about them. They’ll even expect you to stay late and demonstrate commitment, but they won’t pay you overtime.
TeMPOraL 2y ago
One thing I learned the other day is to never believe the internal corporate newsletters. For an entire year, pretty much every single day would bring in an e-mail from Company BU A, or Cross-Company Initiative X, or Podcast with CEO, or such. Every single one of them would talk about the great successes in recovering from the economic crisis, the amazing results this quarter, the great product release here, another successful merger there, new perspectives on Bitcoin or AI or such from CEO, whatnot - all giving you the picture of the enterprise being like literal USS Enterprise hitting warp speed. And then a layoff wave finally reaches your department, and you learn that apparently the whole BU is deep in the red and they're forced to cut staff across the board, and it's been like this forever, and that's why there was an emergency meeting last Thursday (called "Financial Update Q3 for BU Y" or something, non-obligatory and otherwise not announced or discussed), and "don't you ever attend town halls?". (Yeah, no one at PM level or above does, there's nothing relevant in them. Until one day there is.) Newsletters, meanwhile, continue coming and announcing even greater growth due to digital transformation in the age of blockchain or AI or stuff. Lesson learned: the first impression was correct - it's all internal marketing, and it's about as truthful and helpful to the recipient as regular marketing, i.e. not at all.
- pclmulqdq 2y ago
  For most execs/people, there's a big difference between what people will say in a meeting and what they will write down. They feel the permanance of the writing or recording.
  - svilen_dobrev 2y ago
    one of lessons i learned hard way: do not trust - or avoid - managers/higher-ups who do not want their things in written - even e-mails. While still have you sign all kind of stuff.
- nthingtohide 2y ago
  When narratives fail, to casual observers the failure seems sudden and out of the blue, but there are usually unmistakable signs of "narrative breakdown" that often become obvious to most observers only in hindsight. One of the most dramatic stories of a "failed narrative" we have ever read comes from Barton Biggs, in his book "Wealth, War and Wisdom": >> "...the Japanese official battle reports and the Japanese press reported the Battle of the Coral Sea as a great triumph, and Midway was portrayed as a victory, not a defeat, although some loss of aircraft and ships were admitted. Although casualties must have been noted and grieved, Japanese society at the time was so united behind the war policy and believed so totally in the invincibility of the Japanese military, that defeat and economic failure were virtually inconceivable. It would have been unpatriotic to sell stocks..." >> "Not every investor in Japan misread the battles at Coral Sea and Midway. Food was in short supply, and railings in the parks around the Imperial Palace were being dismantled for their iron. The Nomura family and Nomura Securities in mid-1942 began to suspect the eventual defeat of Japan. Although the newspapers and radio broadcast only good news about the course of the war, the Nomuras apparently picked up information in the elite tea houses of the upper class. Many of the naval officers and aviators involved in the battles at Midway and the Coral Sea had geishas, and when the officers failed to return, rumors began to circulate." >> "The Nomura family, sensing something was amiss, began to gradually sell its equity holdings, and even sold short. Later they purchased real assets, probably reasoning that land and real businesses would be the best stores of value in a conquered country. These protected assets allowed the family to have the capital to finance the rapid expansion of Nomura Securities & Research in the immediate postwar years and eventually emerge as the dominant securities firm in Japan." When did the narrative above "officially" fail? Many date it to August 15, 1945, six days after the 2nd atomic bomb was dropped on Nagasaki, when Emperor Hirohito addressed Japan on the radio to announce Japan's surrender, noting "...the war situation has developed not necessarily to Japan's advantage..."
nradov 2y ago
If it makes you feel any better, there is usually little connection between management wasting money last year and laying off employees this year. Downsizing targets are based on predicted future needs so if business is trending down they'll cut just as many employees even if they have an enormous amount of cash saved.
gonzo41 2y ago
I think that the honorable thing in those companies is for a CEO to demand seppuku from a significant portion of the c-suite. At least as a form of solidarity with the workers put to the sword.
iugtmkbdfil834 2y ago
We are apparently going through a "year of efficiency" and most of us know what it means. After "more with less" round come layoffs so one might as well do some basic prep work, dust off resume, reach out to your support network.. just saying.
donatj 2y ago
In my experience, the consultants likely recommend the layoffs, probably even helping select who to let go. If they cut more than five $40k employees, they've made their $200k back.
DrScientist 2y ago
I'm not disagreeing - but I think it's worth pointing out that an employee on $40K actually costs the company a lot more ( can be as much as > 2x ) - not just employers tax, pensions contributions etc, but also the cost of factory/lab/office space and equipment and consumables[1]. [1] Assuming the consultants aren't also in the office with a desk etc
- pclmulqdq 2y ago
  $40k is a tiny salary, too. Taxes, facilities, and benefits are going to be more than 2x that. A contractor paid $200k/year is likely cheaper in total cost than an employee paid $100k/year.
- moduspol 2y ago
  Employee headcount is also evaluated less favorably when potential investors evaluate the company's health. They're implicitly seen as a promise to continue paying them in the future, whether that's materially different from what the company does with contractors or not. And some of that is probably fair. As an employee, a layoff of a bunch of employees is a lot more troubling than a bunch of contractors not having their contracts renewed.
nrclark 2y ago
I was laid off once. The reason on paper was budgetary, times are tough, etc. But the real reason was that I was a bad fit for the role - for a variety of reasons. I got pipped, and foolish me tried hard to work on the items in the pip (to no effect). The layoff came right on schedule. A few years later, I was chatting with an old coworker and I came to find out that the director of engineering had demanded it. It was in direct response to me refusing to participate in building a knowingly DMCA-violating product. The pip was theater. The "times are tough" bit was theater. The reality is that the director wanted me gone, and that is how they did it for legal coverage reasons. I don't really blame the company - I was a bad fit, and I can see that clearly in hindsight. But it did teach me never to accept budgetary layoffs at face value.
- ergocoder 2y ago
  I don't see the theater as bad or good. If anything, it's slightly good. It gives people an out; a soft landing. Being fired because you suck is going to destroy your confidence and tarnish your work reputation (because layoff is public).
- cultureswitch 2y ago
  Imagine getting fired because you wanted to respect the DMCA of all things. I'd be curious for details, though you probably shouldn't tell.
  - nrclark 2y ago
    I was never really concerned about the ethics, but was more worried that I'd be personally liable for it. I kept thinking about the VW emissions scandal, where the engineer that implemented it was given prison time. In hindsight, it was probably a stupid thing for me to worry about. I also never should have expected that I'd be able to change the director's mind by refusing to do what he said.
    - horrible-hilde 2y ago
      you absolutely did the right thing. Are you doing well now?
snozolli 2y ago
when you observe management wasting absurd amounts of money Working in corporate America has caused me to view layoffs as proof of managerial incompetence. I understand that the market doesn't see it that way, but that's the conclusion I've come to.
malfist 2y ago
What's even more absurd than cost cutting after mismanagement is a layoff and cost cutting while having record profits. Look at most of the big tech layoffs last year and the year before. Every one of them was reporting more profit and revenue than ever before and still doing layoffs
jarsin 2y ago
It's not just overspending it's over hiring too. IME they always go hand in hand. Then those who spent years working hard with minimal staff are the ones to be laid off.
johnvanommen 2y ago
> “Sorry, we spent $200k on consultants and conferences that accomplished nothing, so now we have to cut an employee making $40k” really erodes morale in ways that merely firing people doesn’t. One time I was tasked with auditing what my team spent, at a tech startup. During my audit, I found that we'd spent a million dollars to make a single phone call. Basically: * We were spending money like it was going out of style * We were getting the highest level of support contracts on EVERY piece of hardware and software that we bought. This mean that we would routinely purchase hardware, stick it in the corner of our data center, and it would have an expensive support contract, before it had even been installed in a rack and plugged in. In some cases, we bought stuff that never got installed. * The software support contract from one of our vendors was a million dollars a year. The software was quite reliable. In a single year, we'd made a single support call.
- brailsafe 2y ago
  This is why I recommend to everyone, both in and out of tech, that you need to try and get as much money out of your initial negotiation and down the line as possible from your prospective employer; if you don't get it, it'll be fucked away on like one single meal or evaporate some other way.
lezojeda 2y ago
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creer 2y ago
It doesn't matter what the reason is. The reason is whatever will look least bad in the news (if it ever makes it in the news) - and is legal. Ignore the reason, it has nothing to do with you, it's not about you, it's a technical detail. But yes, it would be nice if the manager was helping their employees understand that. Even for an investor keeping an eye on their holdings, give minimal weight to the reasons for a detail level layoff.

mclau156 2y ago

not a single comment about overpopulation?

mk89 2y ago

That's because they have a budget which is planned ahead (e.g., 2024 for 2025) for everything. Typically if the company is really in financial trouble, they will also NOT use the pre-allocated budget which was not yet spent (=200k for company events, although the budget for such things was planned and approved last year). I have seen companies actually taking care of finances (both firing people AND blocking useless events) and I have seen companies doing what you said, which creates pure hatred.

keiferski 2y ago
Right, which is more indicative of how yearly budgets which don’t factor in continual employment of staff lead to the morale decline I mentioned. Perhaps the manager isn’t actually capable of doing much about it, and can only spend or not spend their budget. But that indicates a failure in the company as a whole; at least if keeping employee morale high is a goal (which it definitely isn’t at many companies.) Even then, the mismanagement of funds just communicates a level of incompetence that is more demotivating than cuts from an actual lack of funds, IMO. “Sorry, the market has shifted and we can’t afford this,” is at least somewhat understandable when you have trust in management’s ability. When you don’t, it comes unpredictable and chaotic - never a recipe for getting good work done.
- mk89 2y ago
  I agree. Mismanagement of funds is one of the worst things. Is it pure incompetence? Or is that they don't give a damn and that "let's get together 500+ people for a fully paid weekend" is too cool to cancel? ...like better an egg today than a hen tomorrow. I mean, they don't get affected anyways, they do get the egg and hen...!
  - number6 2y ago
    Playing devil's advocate: Firing people has a huge financial impact - around $100,000 per person per year. The event only cost $50,000 once. So it might not be that significant, and at least the staff gets to enjoy a nice event. Why eliminate both when the event's cost is equivalent to just half a position?
    - mk89 2y ago
      I think it has more to do with the psychological effect than with money itself. We're used to think that in difficult situations you cut the useless "fun" expenses. When that doesn't happen in a company, people blame it on management that already "moved on". It has to do with how people perceive a company and with all that culture that has been pushed down our throats for years, with "We're a family" and things like that. It has also to do somehow with showing some respect...
    - IggleSniggle 2y ago
      This one's easy. Because you value your people more than the parties they can throw. The cost/benefit are not just monetary. If they were, the event would have no reason to happen under any circumstance. You fire someone because they are hurting the company? That feels like a company that cares about doing well. Event seems more okay, and there's no reason to question the financial cost if the org seems to be doing well. You layoff someone off because you're tight on cash? Tell everyone you only hire top performers but had to let a top performer go because of budgetary reasons? Feels gross to throw more money away when you're already making "hard" decisions about letting quality people go.
codr7 2y ago
Let's hope the budget includes success then...

vasco 2y ago

Also mostly it's speculation of an accepted kind. Executives can say, listen we have these initiatives, I think they will print money next year, so based on this prediction I will raise the budget for the FY. Then when the prediction of revenue fails, you do cuts, oh well you were wrong. But next year you can do the same thing. Game theory wise this works because if you're right, you bet big, hire big, are ahead next year vs your competitors that invested less. If it goes wrong you are seen as a serious executive that has the courage to have layoffs when needed, and if your market is ebbing your competitors will also be suffering somewhat. It's also easy to make the next year prediction be whatever you want since in a small company it's just you saying a number that the board doesn't think is too outrageous and in a large company involves you asking an analyst to increase the word of mouth factor of their model or whatever.

bodegajed 2y ago
This happened to a friend of mine. Executive made far-fetched PowerPoint slides and tried to raise a budget, the board loved the powerpoint. They restructured, the company laid-off dozens, and hired new foreign contractors. Because past engineers got the blame, and the legacy code. They rewrite from scratch using X this time. Massive failure because of poor morale, brain drain and over-ambitious features. So what now? well let's do another round of layoffs, make new powerpoint slides and repeat the same process.
marcosdumay 2y ago
Oh, those hyperspecialized employees that can only work in one project and could never do the exact same thing if the thing's goal changed... And yeah, those quick to materialize gains, where the manager can easily discover if a project worked within the same fiscal year... Also dragons and unicorns, I guess... what a world those people live in!
bluGill 2y ago
That is the problem with presentations of all sides - doesn't matter if it is power point, a blog post, a NYC article, government report, a documentary, or something else. Whoever writes it gets to choose what arguments and facts to bring out. However listens to it is generally primed to think it is correct and not ask hard questions - often they don't even know what the hard questions would be. And so garbage gets approved all the time because it looks good.

wisty 2y ago

Managers have a budget. They can't save it, and may spend big on consultants to create a buffer for their team when cuts hit. This is especially true in government, and big companies are similar. There is only one person who really can stop cycles hitting budgets and that is the CEO. IIRC Warren Buffett lamented the fact that the CEO is more of an investor than a manager and that spending budgets as a senior manager gives them almost no experience in setting those budgets.

iovrthoughtthis 2y ago
budget based economics may be the worst thing to happen to large organisations
- IggleSniggle 2y ago
  Suddenly I'm connecting the relationship between "budget based economics" and "agile" as commonly implemented. It's trying to fit creativity into a budget. In the places that do it well, it's like "We're supposed to make some really great art, here's the crayons we can afford, sorry if it's not exactly right but it's what we could manage, do whatever you can, we will take it!" In places that do it poorly, it's like "we need you to make the Uber of the Mona Lisa, I'm gonna need you to find a way to make that work, but we can totally be flexible on this, which crayons do you need." The key differences being that in one case there's well defined constraints on resources but open ended results, and in the other the resource constraints are poorly defined but the end result is much more fixed.
  - codr7 2y ago
    Worse is trying to fit creativity into a tight schedule. Everything gets corrupted, today's agile is way worse than what came before in practice.
- bmitc 2y ago
  I have never even understood the approach. The sub-budgets within an organization seem so arbitrary and become games in and of themselves, often leading to frivolous purchases just to use up the budget and not get your budget slashed. Does anyone know when this came into favor? What was used before? What are the alternatives?

cies 2y ago

Everybody makes mistakes. Higher up in the company (or goverment) mistakes are usually more expensive. Painful, but I see no way around this.

gherkinnn 2y ago

Surely this is a question of having skin in the game, where management is all game and employees all skin. If the clowns making decisions would get hit by bad ones, things would look differently. You now, actually "taking full responsibility".

deleted 2y ago
[deleted]

jojobas 2y ago

They don't spend $200k on consultants just because it's fun. They do it when there are already difficulties in figuring out how to productively use the employees who make $40k (say 20 of them). This is not to say managers don't make stupid decisions, but they are more like bets. Somewhere between the fall of Nokia and the hit of iphone are thousands of decisions that lead to hiring or firing some 10-100 people.

mrweasel 2y ago

> Sorry, we spent $200k on consultants A former employer decided to freeze pay for a few years and later later start laying off people. During the pay freeze a colleague suggested that we might save a significant amount of money by hiring staff, rather than paying the large number of consultants we had hired. I think the ration was something like getting rid of two consultants would free enough money to hire three developers. Managements take was that we should keep the consultants, because they where much easier to fire, two weeks notice, compared to four. So it was "better" to have consultants. My colleague pointed out that the majority of our consultants had been with us for 5+ years at that point and any cancelling of their contracts was probably more than 4 weeks out anyway. The subject was then promptly changed. In fairness to management large scale layoffs did start 18 months later.

jddj 2y ago
Outside of the US this optionality does have some value to deserve at least some premium. Hire an extra dev for the same money looks good on paper, but employment being the trapdoor function that it is in some jurisdictions does muddy the water. (I do understand that there's a historical context to keep in mind, and that the relationship is often asymmetric in the other direction as well)
- mrweasel 2y ago
  > but employment being the trapdoor function that it is in some jurisdictions does muddy the water. Absolutely, I should have clarified, this was in Denmark. Laying off someone is pretty easy, unless they happen to be pregnant, a union representative or work-place-safety representative. And I should know, I was laid off from a job after two months because they decided that they didn't have the budget anyway.
  - varjag 2y ago
    Two months in much of Europe is within 6-month trial period, it's easy to let anyone go.
- yobbo 2y ago

jorvi 2y ago

One that is functionally different but causes the same type of morale hit is managers and upward equipping themselves with fully loaded MacBooks and iPhones, but equipping rank-and-file employees with shitty Dell laptops and budget tier Android phones. That happens more at traditional companies than tech companies, but it immediately signals that it's a crappy company steeped in "rules for thee but not for me" culture.

TikTikFook 2y ago

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skirge 2y ago

"low level" do count in stats if need to show "savings" and can be easily replaced when needed. Also they do not generate profits but need resources (mentoring etc.). On the other side costs are tax deductible.

markus_zhang 2y ago

It's just normal late Capitalism syndrome - no one takes responsibilities, and everyone, at least everyone that is close to the trough tries to get his/her head into it. From politicians to corporation managers to civil servants, it's everywhere. That's it.

ClumsyPilot 2y ago

> management is apparently incapable of managing That’s frequently the fundamental issue really. Measuring a developer’s productivity as an IC is fairly easy. Measuring quality of manager’s decisions is tricky

InDubioProRubio 2y ago
Lets just add a metric (like loc or stockprice) - that will solve things. Gambling metrics will continue till lipservice improves.

EGreg 2y ago

Um, I have seen irrationality all across the board. Market participants shooting themselves in the foot. I have seen investors not invest even $10K into a project and then line up to invest far more for the SAME amount of shares. When you apply for jobs, you see recruiters (who get commission from placements) tell you that your background isnt a fit when it is a perfect fit, and prefer to not show candidates. I have even explained to recruiters that there is an opportunity to represent the candidates, like a Hollywood agent or like a seller agent i Real Estate. That the candidates would also pay a commission out of their salary, if placed in a job they actually like. And that all they have to do is call their counterpart recruiter and vouch for the candidate, which usually a quick call. But most are stuck in their ways and don’t want to tap new opportunities, no matter how easy. To their credit, some are not. And so, it is no surprise to me that businesses waste money and then cut their task force. Many of them don’t care about you, but expect you to care about them. They’ll even expect you to stay late and demonstrate commitment, but they won’t pay you overtime.

TeMPOraL 2y ago

One thing I learned the other day is to never believe the internal corporate newsletters. For an entire year, pretty much every single day would bring in an e-mail from Company BU A, or Cross-Company Initiative X, or Podcast with CEO, or such. Every single one of them would talk about the great successes in recovering from the economic crisis, the amazing results this quarter, the great product release here, another successful merger there, new perspectives on Bitcoin or AI or such from CEO, whatnot - all giving you the picture of the enterprise being like literal USS Enterprise hitting warp speed. And then a layoff wave finally reaches your department, and you learn that apparently the whole BU is deep in the red and they're forced to cut staff across the board, and it's been like this forever, and that's why there was an emergency meeting last Thursday (called "Financial Update Q3 for BU Y" or something, non-obligatory and otherwise not announced or discussed), and "don't you ever attend town halls?". (Yeah, no one at PM level or above does, there's nothing relevant in them. Until one day there is.) Newsletters, meanwhile, continue coming and announcing even greater growth due to digital transformation in the age of blockchain or AI or stuff. Lesson learned: the first impression was correct - it's all internal marketing, and it's about as truthful and helpful to the recipient as regular marketing, i.e. not at all.

pclmulqdq 2y ago
For most execs/people, there's a big difference between what people will say in a meeting and what they will write down. They feel the permanance of the writing or recording.
- svilen_dobrev 2y ago
  one of lessons i learned hard way: do not trust - or avoid - managers/higher-ups who do not want their things in written - even e-mails. While still have you sign all kind of stuff.
nthingtohide 2y ago
When narratives fail, to casual observers the failure seems sudden and out of the blue, but there are usually unmistakable signs of "narrative breakdown" that often become obvious to most observers only in hindsight. One of the most dramatic stories of a "failed narrative" we have ever read comes from Barton Biggs, in his book "Wealth, War and Wisdom": >> "...the Japanese official battle reports and the Japanese press reported the Battle of the Coral Sea as a great triumph, and Midway was portrayed as a victory, not a defeat, although some loss of aircraft and ships were admitted. Although casualties must have been noted and grieved, Japanese society at the time was so united behind the war policy and believed so totally in the invincibility of the Japanese military, that defeat and economic failure were virtually inconceivable. It would have been unpatriotic to sell stocks..." >> "Not every investor in Japan misread the battles at Coral Sea and Midway. Food was in short supply, and railings in the parks around the Imperial Palace were being dismantled for their iron. The Nomura family and Nomura Securities in mid-1942 began to suspect the eventual defeat of Japan. Although the newspapers and radio broadcast only good news about the course of the war, the Nomuras apparently picked up information in the elite tea houses of the upper class. Many of the naval officers and aviators involved in the battles at Midway and the Coral Sea had geishas, and when the officers failed to return, rumors began to circulate." >> "The Nomura family, sensing something was amiss, began to gradually sell its equity holdings, and even sold short. Later they purchased real assets, probably reasoning that land and real businesses would be the best stores of value in a conquered country. These protected assets allowed the family to have the capital to finance the rapid expansion of Nomura Securities & Research in the immediate postwar years and eventually emerge as the dominant securities firm in Japan." When did the narrative above "officially" fail? Many date it to August 15, 1945, six days after the 2nd atomic bomb was dropped on Nagasaki, when Emperor Hirohito addressed Japan on the radio to announce Japan's surrender, noting "...the war situation has developed not necessarily to Japan's advantage..."

nradov 2y ago

If it makes you feel any better, there is usually little connection between management wasting money last year and laying off employees this year. Downsizing targets are based on predicted future needs so if business is trending down they'll cut just as many employees even if they have an enormous amount of cash saved.

gonzo41 2y ago

I think that the honorable thing in those companies is for a CEO to demand seppuku from a significant portion of the c-suite. At least as a form of solidarity with the workers put to the sword.

iugtmkbdfil834 2y ago

We are apparently going through a "year of efficiency" and most of us know what it means. After "more with less" round come layoffs so one might as well do some basic prep work, dust off resume, reach out to your support network.. just saying.

donatj 2y ago

In my experience, the consultants likely recommend the layoffs, probably even helping select who to let go. If they cut more than five $40k employees, they've made their $200k back.

DrScientist 2y ago

I'm not disagreeing - but I think it's worth pointing out that an employee on $40K actually costs the company a lot more ( can be as much as > 2x ) - not just employers tax, pensions contributions etc, but also the cost of factory/lab/office space and equipment and consumables[1]. [1] Assuming the consultants aren't also in the office with a desk etc

pclmulqdq 2y ago
$40k is a tiny salary, too. Taxes, facilities, and benefits are going to be more than 2x that. A contractor paid $200k/year is likely cheaper in total cost than an employee paid $100k/year.
moduspol 2y ago
Employee headcount is also evaluated less favorably when potential investors evaluate the company's health. They're implicitly seen as a promise to continue paying them in the future, whether that's materially different from what the company does with contractors or not. And some of that is probably fair. As an employee, a layoff of a bunch of employees is a lot more troubling than a bunch of contractors not having their contracts renewed.

nrclark 2y ago

I was laid off once. The reason on paper was budgetary, times are tough, etc. But the real reason was that I was a bad fit for the role - for a variety of reasons. I got pipped, and foolish me tried hard to work on the items in the pip (to no effect). The layoff came right on schedule. A few years later, I was chatting with an old coworker and I came to find out that the director of engineering had demanded it. It was in direct response to me refusing to participate in building a knowingly DMCA-violating product. The pip was theater. The "times are tough" bit was theater. The reality is that the director wanted me gone, and that is how they did it for legal coverage reasons. I don't really blame the company - I was a bad fit, and I can see that clearly in hindsight. But it did teach me never to accept budgetary layoffs at face value.

ergocoder 2y ago
I don't see the theater as bad or good. If anything, it's slightly good. It gives people an out; a soft landing. Being fired because you suck is going to destroy your confidence and tarnish your work reputation (because layoff is public).
cultureswitch 2y ago
Imagine getting fired because you wanted to respect the DMCA of all things. I'd be curious for details, though you probably shouldn't tell.
- nrclark 2y ago
  I was never really concerned about the ethics, but was more worried that I'd be personally liable for it. I kept thinking about the VW emissions scandal, where the engineer that implemented it was given prison time. In hindsight, it was probably a stupid thing for me to worry about. I also never should have expected that I'd be able to change the director's mind by refusing to do what he said.
  - horrible-hilde 2y ago
    you absolutely did the right thing. Are you doing well now?

snozolli 2y ago

when you observe management wasting absurd amounts of money Working in corporate America has caused me to view layoffs as proof of managerial incompetence. I understand that the market doesn't see it that way, but that's the conclusion I've come to.

malfist 2y ago

What's even more absurd than cost cutting after mismanagement is a layoff and cost cutting while having record profits. Look at most of the big tech layoffs last year and the year before. Every one of them was reporting more profit and revenue than ever before and still doing layoffs

jarsin 2y ago

It's not just overspending it's over hiring too. IME they always go hand in hand. Then those who spent years working hard with minimal staff are the ones to be laid off.

johnvanommen 2y ago

> “Sorry, we spent $200k on consultants and conferences that accomplished nothing, so now we have to cut an employee making $40k” really erodes morale in ways that merely firing people doesn’t. One time I was tasked with auditing what my team spent, at a tech startup. During my audit, I found that we'd spent a million dollars to make a single phone call. Basically: * We were spending money like it was going out of style * We were getting the highest level of support contracts on EVERY piece of hardware and software that we bought. This mean that we would routinely purchase hardware, stick it in the corner of our data center, and it would have an expensive support contract, before it had even been installed in a rack and plugged in. In some cases, we bought stuff that never got installed. * The software support contract from one of our vendors was a million dollars a year. The software was quite reliable. In a single year, we'd made a single support call.

brailsafe 2y ago
This is why I recommend to everyone, both in and out of tech, that you need to try and get as much money out of your initial negotiation and down the line as possible from your prospective employer; if you don't get it, it'll be fucked away on like one single meal or evaporate some other way.

lezojeda 2y ago

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creer 2y ago

It doesn't matter what the reason is. The reason is whatever will look least bad in the news (if it ever makes it in the news) - and is legal. Ignore the reason, it has nothing to do with you, it's not about you, it's a technical detail. But yes, it would be nice if the manager was helping their employees understand that. Even for an investor keeping an eye on their holdings, give minimal weight to the reasons for a detail level layoff.