Yelp lays off 1000, furloughs 1100(blog.yelp.com) |
Yelp lays off 1000, furloughs 1100(blog.yelp.com) |
An example might be complying with food and alcohol law in a single region, which you would never see unless you lived there. Another example might be a complete experimentally gated refactor that shaves 1 second off loading time. A lot of effort would go into simply making sure the change can be turned off, and verifying with unit tests, which takes time and effort.
These projects might be pointless on a small app, but in a large business might be worth millions to the company.
Another aspect is your changes often have to be approved by a lot of people, which is not the case on small projects. Your projects are also analyzed by data scientists, to make sure they're not harming the business - and if they are, your work might be thrown out, which contributes to even less visible change to outsiders.
All of these in concert slow things down, and necessitate staff.
Why that is the case in every business, I haven't been able to figure out. I suspect it's because when businesses reach that size, the efficient market effects become greatly overstated in the short term, so these businesses naturally acquire a lot of fat.
One piece of evidence for this is that private equity exists. You can buy a business, fire a quarter of the people, then sell it and make a lot of money without hurting the operations at all.
Corona spoke up and pointed out the Emperor had no clothes.
So you need more engineers because you hired more middle managers?
That's a little absurd in my opinion but I am likely wrong in this assumption.
It just seems like the reaction to "We have lots of approvals" should be figuring out how to reduce the amount of approvals needed, not hiring more engineers to increase velocity.
Surprisingly, or hopefully not, the vast majority of the company is more directly revenue generating; sales and customer acquisition. Its spread very globally; at least as of a few years ago, the SF HQ didn't house any sales people, though I think they had an office in Oakland which did.
Point being, I always got the impression that their engineering team was very "right sized" given their revenue and product scope.
http://d18rn0p25nwr6d.cloudfront.net/CIK-0001345016/360caaf2...
Page 5: "Our sales force consisted of 3,844 employees as of December 31, 2019..."
Page 12: "As of December 31, 2019, we had 5,950 employees globally."
For example, just one marketing VP with a salary of $120,000 could have an advertising spend budget of a few million.
But in Yelp's specific case, they do have a ton of sales/customer service people who most definitely are among the first to go, along with engineers who are working on projects that are not related to keeping the website from 404ing
Even most programmers -- who are well aware of the hidden complexity of the products they themselves work on -- usually seem to believe that this must not hold true for the products of other companies.
For every feature you're aware of on a random consumer tech product or service, there are probably ten or twenty more that don't concern you, that you haven't seen, or that you don't care about.
It begins innocuously enough. It takes just one or two mid-level manager empire-builders to join the company. Thanks to the funding, the product and business want growth at all cost which means everything needs to be built and launched yesterday. The engineering-managers say well sure, I need 100 engineers. And so the game begins; the early empire-builders get promoted to dizzy heights.
It doesn't take much time for others to take notice that they need to build an empire to get promoted and every mid-level manager is hiring like there's no tomorrow. In no time you have an incredibly bloated org. In this environment not building an empire is not an option; teams with fewer than 10 members don't get new-shiny projects and are brutally sidelined.
[1] I've been on both sides. The start-up I was working in got acquired by a behemoth that had skilled empire-builders. My team got massacred. In my next gig I had learned my lessons so hired like crazy and in no time had 40 engineers reporting (direct/indirectly) to me 15 of whom had any real work to do. The rest were building random CRUD apps. In the end, realized that empire-building is not for me; I enjoy running a small tight knight team producing high throughput and impactful work.
More generally, it's kind of amazing that any company with 178 million unique "customers" only has a few thousand people working there. I know this is the norm nowadays due to the power of computers and the Internet, but I imagine how many people would have been employed to perform the same tasks fifty years ago and suspect it would have been three orders of magnitude higher (and completely uneconomical to do).
Progress is a pretty impressive thing.
I know you're not saying this, but I'd caution anyone against saying things like "<company>'s product is just a glorified <something simple>". It's very hard for people not working directly on a product to truly understand its complexity and everything that goes into it.
EDIT: here's where I read that https://danluu.com/sounds-easy/
I'm sure the Owner of Botto Bistro [1] is having a proper side-splitting laugh right about now hearing this news given all he [2] has gone through.
In short: they have 6000 because that's what leadership thought they could afford. Obviously a 10-year bull market leading up to the current lockdown situation puts them in a rough spot.
There is this canon dogma about 'market efficiency keeping things lean and fit', which is so obviously false and disproven by every single Corp out there, and yet is allowed to stand. Curious.
Yelp's business model requires a lot of cold calls to small businesses.
Honest question - is it normal to announce layoffs publicly before telling the affected employees? I guess I can understand it from a PR perspective, but it must be awful to read that and sit around waiting to find out if you're affected.
Companies like this always start with a noble purpose, before the pressure to monetize causes them to ruin what was once a valuable service.
I know a few friends that work for a major retail company that have been furloughed. Those will definitely turn to layoffs if this keeps going too much longer.
They will prominently display ads containing positive reviews for competitors on a business's page unless that business pays Yelp.
Take SEO for example, it's not just putting H1 and title tags on every page. You most likely have dedicated services that are generating millions of sitemaps, daily. You probably have separate infrastructure dedicated to serving the crawlers so that you can optimize the content and aren't serving your users and bots from the same pool of resources. You have analytics dedicated to monitoring the crawlers and running tests / adjustments as you see results. You likely have services that generate the SEO data for every page (meta tags, titles, canonical links, headings, etc). And in addition to this you have AB testing, legacy systems, and technical debt to deal with.
My point is, it's easy to brush these things off as unnecessary and large company waste (and some of it might be) but to say things like "It's just a CRUD app, why do they need a 1000 engineers. I could do it with 10" is ignoring the vast complexity involved in running at scale.
https://tech.slashdot.org/story/18/01/10/1728222/yelp-accuse...
Why do people do this? What do they get out of it? They don't pay for tip-offs do they? Seems unethical anyway.
For other commenters asking about the workforce: Yelp has an army of salespeople because they have to sell to so many small businesses. What they do is frankly amazing to me. I used to sit on the sales floor sometimes to experience the excitement. It seems like they'd be the most affected, and I hope they fare well. [Source: used to work there in engineering]
Compare to the way things were done in the early 80's when the same industry was new at this, they did it as a "surprise" all at once, hustling people out the door and people don't have any time to exchange email addresses with coworkers, etc.
Of course, if you're not offering any severance package, then you have more of an incentive to do things the wrong way...
There is zero physical evidence that Yelp does or ever did this. The only thing that Yelp ever did was move one positive review to the top of the page for advertisers, and I'm pretty sure they abandoned that practice a long time ago.
It's pretty obvious to me that unsophisticated business owners are simply drawing false inferences when they receive a sales call and then receive a negative review. Confirmation bias at work.
Here's an old Hacker News comment that seems to me to probably be close to reality: https://news.ycombinator.com/item?id=1149078
If they're doing that, then you know that the end goal is ads, ads, ads.
I agree that no one is entitled to positive promotion, but to argue that a massive platform that's established itself as the go-to place for consumer business reviews absolutely should be held to fair promotion.
I can't believe that this an argument on HN. You're saying that if you had a small business with a Yelp profile and I found your identity and started posting false negative reviews on your business profile, you'd have no problem being called by a Yelp rep to pay money to make them go away?
If Yelp is in trouble, maybe their quality should get another look.
Google, Facebook, Amazon, etc.
Hell, maybe you can argue Netflix's algorithms have taken a turn for the worse, but to their credit Netflix is the only FAANG+ company (not that Yelp is in this bucket) which really hasn't "gotten evil" over time
Now that uncertainty is going down as we understand it all better, have more data, have plans in place, the economy is recovering to a more accurate, "this is actually what this whole ordeal will cost us"
When there's so much stupid money being pumped into the system, why would the fundamentals, like unemployment, lack of consumer demand, gdp contraction, expected dividends, etc, etc, matter?
We could all be out of work, trading bottlecaps for packets of ramen for the next year, but as long as the fed keeps printing a million dollars for every 3 unemployment claims, the markets will be soaring.
(I should point out that because the USD is a world reserve currency, and has very large amounts of it in circulation, this won't even result in hyperinflation.)
Spot price does nothing to measure uncertainty. Volatility is still very high which means, by definition, we are in an uncertain market.
A much better explanation for the dow rising is the opposite of what you propose: we don't really know how this will impact things so it's very hard to price all of this in. Investors already known that unemployment claims this week would be awful so that information is already priced in, but we're still really waiting on information about how all of these impacts will impact businesses as a whole.
I mean, one very straightforward interpretation of the headline of this linked article is that Yelp will be seeing a 30-40% shortfall in revenue for the medium term future (i.e. long enough to make the firing and hiring process worthwhile). At its worst, the market was guessing at a 38% drop in valuation, and it's now recovered significantly from that.
My guess, and no I'm not buying puts to test it, is that we're going to see another series of shocks to the market when the revenue numbers start being reported and the big employers start running out of money and shutting things down.
Right now the immediate job losses are all in the service sector and small employers, and those jobs are basically invisible to your typical trader bro.
I don't think anyone really understands how bad things are, and the only reason fears have abated is because everyone is operating under the assumption that the country will "open back up" later this month or next month, and things will largely go back to normal in the summer. Once that sentiment erodes and reality sinks in, we can expect the stock market to sink with it.
It happens all the time during sell out (1929, 2008). At some point shorts close their positions en masse. It doesn't stop the market from falling further later...
https://www.marketwatch.com/story/heres-how-big-of-a-bear-ma...
1) pricing in the return of US manufacturing. In a pandemic, it's every country for themselves. We've outsourced items critical for national sovereignty and the ability to respond to crises. I think left and right agrees now, that's a risk which needs to be mitigated.
2) govt has unprecedented support, in terms of small business loans and benefits
3) bonds and stocks are usually inversely correlated, they are not because the fed is buying up a significant portion of the debt, at low rates. Meaning your not getting much return if you hold bonds.
4) Capital flight from foreign markets. If you can't trust China, and emerging markets are going to get hit worse, then the US is where you want your money.
5) Less uncertainty.
6) More speculation that this virus is not as bad as we think. We're well below the expected deaths on the models, which means the models are wrong, by a factor of multiples.
The divide between big and small business in this scenario is stark. For companies that have access to bond markets and the stock market massive amounts of cash are being deployed to prop things up.
Small businesses are in complete free fall, with a non-functional short term confusing payroll assistance loan plan that has yet to lend to anyone in effect.
The writing is very clearly on the wall. Hundreds of thousands of small businesses will fail, and that will further tip market share towards larger companies, conglomerates, chains, and similar.
When you invest in the stock market you are investing in those larger businesses.
So, despite what you may naturally think, the market crash wasn't reflecting the fact many people aren't working right now, it was reflecting the fear that we could be knocked out for months. Now fears about the worst-case scenario are receding, so the time-averaged result rises as the result of the worst bottom elements lifting, even if the overall assessment is still problematic.
I'm also surprised because I'd expect stocks to tank because that's what would make economic sense to me. People at home, not spending money, unemployment soaring. So far I'd assume this situation has more of an impact on the actual economy than the financial crisis but the market seems to disagree.
I guess the lesson here is that FED meddling/cheap money trumps all other factors. But that would mean eventually things should crash really fast.
The best lesson from "The Alchemy of Finance" (my favorite investment book) is that the market just represents the current bias, not the true situation but eventually converges to the true situation. That's subtle but hard to grasp. At least it was for me. Or in other words...what makes economic sense isn't necessarily reflected in the current market prices (as the efficient market hypothesis would suggest).
1.) The gov has shown they aren't willing to let the market tank.
2.) Many businesses are actually thriving right now via online orders. This means every part of their associated supply chains are thriving as well.
3.) This is a temporary revenue setback but will make it socially acceptable to layoff employees by the thousands...which will trim payrolls without losing an equivalent amount of production.
4.) Non-retired people wouldn't dare touch their 401k before they are 59 1/2, which are primarily comprised of stocks.
5.) The market is predicting a surge of activity once this is all over.
6.) This situation shook out any major bubbles that were forming (e.g. stock buybacks), and made the market more anti-fragile.
7.) People now see the value of having more goods on hand in their homes, which will probably mean increased initial spending when this is over.
Governments all over the world have implemented financial relief to these companies by promising to shoulder the cost of wages through the normal unemployment benefit system. Companies taking advantage of that during this extraordinary period doesn't say much about what their profitability will look like after the lockdowns are over.
In fact, in some cases this could be evidence of a flexible company that is able to scale down quickly and is more likely to survive this and future demand shocks.
Meaning it's not as bad as we all thought in previous weeks when millions were predicted to die
This often seems counter-intuitive but is pretty simple to understand if you keep in mind that markets are always forward looking. For instance, if Company A typically makes $1m in profits each year, you can ascribe a value to it. However, if at some point, you suspect that their profit is going to drop 80%, you are going to devalue their stock accordingly. However, if the company announces that their profit "only" dropped by 60%, you have likely undervalued them (since you thought it would be worse) and it makes sense for you to increase their price.
So to get back to your initial question, the answer is the market thinks, right now, that things will not be as bad as they initially assessed.
- Some of it is inflationary as others have pointed out. There's a lot of money entering the system right now, and markets tend to go up on that
- Some of it is short sellers realizing gains from the last month and exiting their trades (the effect of closing a short causes markets to rise)
- Some of it is psychological reactions to dropping death estimates, and concurrent optimism that things will go back to "normal" soon (or at least sooner than previously thought)
What the market did 12/21/18 is sort of irrelevant
Everybody realizes it should adjust to some new value to reflect the new reality. But nobody knows what that value is. So nobody is sure if the market has adjusted too far or not enough.
So any time any new information comes in, people grasp at straws trying to make sense of the situation (and/or decide they have to act despite very limited information), and the market goes up and down.
It doesn't just move smoothly in one direction and then gradually come to a stop once it finally reaches the new "correct"(-ish) value. It jerks back and forth as it gets there. So even when down is the inevitable direction, it's going to have a few ups mixed in.
So apparently the fed announced more financial measures. Which might cause some optimism. Also rumour has it there is a chance that the oil 'crisis' will be solved.
Also investors might be short sighted and think this will only take a few months. Who knows.
To me it feels totally incorrect, reading all the other news would mean stocks should go down. This crisis is a bit different though, it is not a financial crisis, which takes a while until it hits the real economy. I think nobody is entirely sure what is happening.
...and the stocks are green.
Most the bottom hunters are only following the Covid news. Oil prices are adding to the stock market swings big time.
Virtual meeting started around 10am EST.
But yeah tbh no one really knows
market effects of the underlying securities themselves. Supply and demand of actual stocks can affect price
The biggest one is a short squeeze
That's easy: the market is betting the "help" is another mass wealth transfer from the bottom half of the population to the top half of the population. This happened every time we had a crisis. Why would a rational investor thing it would be different this time?
Trump is desperate to not let the markets drop as part of his legacy, and the fed is doing everything in their power to not let the markets drop... Regardless of the long-term consequences. This is, of course, purely a coincidence.
That's why you can have 16 million unemployed in two weeks, another two months of shutdown on the horizon, nobody buying anything, everyone sitting at home, landlords not getting paid, and yet have the market partying like it's 999.
You measure one with the other.
Here's a long term graph of the Feds balance sheet: https://www.ft.com/content/ec10b41a-84af-4e44-ad3f-5bb86b6e1...
Here's the Australian Central Bank's current balance sheet: https://i.redd.it/h7bdffj8gqr41.png
This is playing out across the planet and will likely have the same market distorting effects as a decade ago.
Anecdotally, retail investors also appear to be buying the dip in volume, though we need more recent fund flows data to see if reality reflects anecdotes.
Engineering was mostly based in SF but with satellite offices in London and Hamburg. It looks like they were expanding in a large way into a Toronto office too.
Infrastructure was around a fifth of that total but included verticals like search and machine learning infrastructure.
Yelp turned off their last datacentre in early 2018 (IIRC) - and is entirely on AWS.
Logically, that would extend to people whose job revolves around signing up restaurants to marketing portals. The restaurants that have an online business are already there. Those that don't have an online business are already closed.
Programmers arent as easy to replace because they already understand the system. Training takes time, and if there's not enough documentation then you'll end up contacting the previous programmers for help (I've seen it happen) anyway.
So if you’re designing your own CTA, just copy Wal-Mart’s or Amazon’s or Airbnb’s and voila.
In a way, I wish I got to work at Wal-Mart or McDonalds just to get a 1st-Hand view of their processes. Would beat any “LEAN” course.
When I was contracting I was always surprised how outwardly similar businesses could have vastly different IT functions. Sometimes an order of magnitude larger for no apparent gain.
There's not really even a choice here.
Yelp is in a similar situation; they're simply not profitable enough to have been able to sock away 6+ months of expenses to be able to weather a black swan pandemic event. The FANGs are profitable enough and they do have that much money saved up, but Yelp isn't and doesn't. Their business model was already a little creaky before this started and all their customers shuttered.
This isn't just some "rainy day" to save for. This is unprecedented, and it's only necessary because the government did not take steps to contain the outbreak sooner.
Money given to companies after this is not a bailout in the 2008 sense. It should be viewed as compensation for damages caused by the government's bungled response to the virus.
One example: https://www.youtube.com/watch?v=8CIGKxLcoso
That's evidence that Yelp practices extortion?
However, this video very clearly shows a family who incorrectly blames the business owner for one of their members losing a job. Yelp fired them, as they should have.
https://youtu.be/BHEbVh3Yhrw?t=442 may be better, as he talks with two of the people behind the movie Billion Dollar Bully. (I didn't re-watch it completely, as I don't want to get myself wrapped back up in his world.)
As it notes in https://slate.com/technology/2019/06/billion-dollar-bully-do... and the above, if Yelp's culture means that employees are getting away with it, and sharing that, and tend to work with people who aren't web-savvy, there's certainly the opportunity for certain individuals within the company to give the company a bad name.
For-profit businesses, especially ones that want everyone to use them, generally don't like to talk about the fact that some part of why they exist is for the money and/or they have stakeholders that want to see a return on their investment.
It's also possible that Yelp has since gotten better, and they're still fighting off the old perspectives. Not OP so not sure where their evidence came from.
(I personally rarely use Yelp, don't have an account, and prefer the reviews built into Google Maps since that's my navigation app of choice. I didn't know about issues with Yelp until I was subscribed about the above, and after unsubscribing numerous months ago haven't heard anything else about Yelp until now.)
i don't see what yelp had to do with it.
Honestly, I thought this was long since debunked. There is no physical evidence of Yelp sales execs extorting small businesses.
Their algorithm rules all, sales has zero say in it.
The thing that truly influences "hard to hire" is supply and demand. With the influx of bootcamps Software engineering supply has increased and with COVID-19 decreasing demand Engineers may no longer have the luxury of picking and choosing like they used to.
I'm an engineer btw. Just viewing the situation from a realistic lens.
While the supply has increased, the number of senior engineers hasn't grown at the same pace. I know of companies who've fired even their senior engineers, but they've been hit particularly hard by this crisis (think 'business model is literally rendered invalid' level of affected). Most people who think they'll be able to weather at least the next six months will be reluctant to fire more experienced engineers, because they know how hard it was to hire them to begin with.
While some of the options might be gone, chances are people who get laid off or are still in the market will look for companies with better chances of surviving this (think Google, Apple, Facebook, etc.), so the pool of experienced talent might actually be reduced for startups.
In other words: people with 5 years of industry experience are playing in a completely different arena than more junior engineers, who are unfortunately in a more precarious situation.
As an example: a retail transaction database. Or a calendar booking system. That should be really simple, right? Just record who ordered what, when they received it, who sold it, etc. Who reserved the room, who to send invites out to, simple?
No, it turns out that you have to also take into account people whose orders got delayed by the human-based shipment system, people who got coupons and they expired/want to extend the coupon, people who returned the merchandise and never got any confirmation that it was received back. Or what if someone modifies the meeting location after people accepted -- does a minor change to the meeting description trigger a re-invite or update, or not? Can meeting rooms be held by more than one person at a time? Or what if you want to tie it to the email marketing system that wasn't properly integrated or planned to be integrated -- that's another couple of engineers who have the thankless task of maintaining ETLs that constantly break whenever a change comes along.
Or in the case of Yelp, I'm sure there's small teams who are responsible for the mundane tasks of how to keep track of when a business closes, or reopens, or temporarily shut down due to virus situation -- how are the entries for those businesses supposed to be updated? We never had a field for "closed by mandatory government order" -- that's gonna take a refactor of xyz to implement, etc. etc. We have users who review things, and then those users someday die/go idle/get banned. What happens to the ranking of their reviews? It goes on and on.
(and usually, the people who take the time to think about these things in advance set themselves up for much less pain, and far fewer people needed to fix it, later)
I am not sure people downvoting me understand what all goes into an EHR/practice management software. Calendar booking? Yep. Billing. Oh hell. Don't get me started on the byzantine mess that medical billing is! Then there's charts with icd-9/10 hell. And then everyone you sell it to wants their own charts a little different. Patient records, insurance, I mean, it goes on. The database had several thousand tables. It was insane.
Maybe it's not a good thing that only 50 engineers were working on that system.
An old EHR system from years ago does none of those things, doesn't do engineering heavy things like live updates with thousands of A/B/C/D tests running simultaneously with multiple clients for multiple operating systems and so on.
Mind you the situation is different now so what you say could be right in a certain way.
- Things truly requiring management handling (like raises, big expenses, hiring, etc.) took FOREVER in the best case because of the bottleneck at the top. More commonly, they got lost/dropped without explanation.
- Flow of sensitive information was slow and inconsistent because the only way to communicate with a flat org is all-or-nothing.
- Specialist engineers found themselves trying to track too many projects before they realized the overload was a problem (this was me)
- The president (and effective sole owner) was still deeply involved in all projects and regularly exercised veto rights. As the project load increased, the vetos landed later and later - some times after we'd already spent 50% of the budget! This left our customers up a creek and our reputation suffered.
Also, UX wants to see the final result on their screen before they approve your build, so before deploy you have to push into a test cluster, but there are only 10 of those, and you need to wait until one of them is free.
And of course your Jenkins server takes 2h to build and fails sometimes, so pushing small changes takes 2h because you have to babysit the build. The testing cluster above also takes 2h to build. CTO believes in engineers taking care of their code, so SRE is not allowed to handle the builds.
And then there's an average of 2h of meetings per day (I'm not including the 40 minute daily scrum because your squad has 15 people). Half of them to discuss the production incident you had because you didn't see the Slack alerts when you were in another meeting. The other half is chapter and guild meetings where you don't talk, but participation is mandatory. On Mondays you have sprint planning, so forget about coding.
Engineering fact: A 300 watt amplifier is only twice as loud (+10 dB) as a 30 watt amplifier. The same math works for engineering teams.
Then, the machine gets bigger and the dependency graph gets more complicated. Suddenly, if you change one small part of your module, you run a very real chance of ruining something someone in a faraway department relies upon. So, the machine evolves to have things like coding standards and more formalized review processes. Unfortunately, the machine is composed of humans and humans aren’t as simple as just pulling it all apart, greasing it up and putting it back into service. So every single time you add a review step, there’s a chance it genuinely adds to quality (or removes risk). But, there’s also a chance that that change was about ego and organizational power. Then, in five to ten years, they hire MBAs to come in and lay people off.
Edit - Good heavens, this sounds bleak.
It is sometimes better to go slower than you could and be more confident that the product is acceptable. Approvals can but don't necessarily help with that.
And you can cycle through this a few times. And yes, people will also cycle through "we need to reduce bottlenecks" and such, but at this point, you've been successful, you've got a bunch of money coming in, and pissing off your clients is something to be avoided, since individual efficiency is not the end goal by itself.
Companies often implement more process for good reason.
The antithesis of old Facebook's Move Fast And Break Things is to have policies that ensure good security, stability, accessibility, privacy, internationalization, meeting legal requirements, etc. and that usually means processes to ensure that eager engineers and product managers actually meet those policies, instead of rushing to launch.
It's easy to scoff at process when you're a small company or startup whose mistakes will go largely unnoticed unless you suddenly go viral. If you're a Big Tech Company, accidentally messing up security or privacy somewhat means getting a front page article on The Verge detailing your crimes.
Working at Google now, there's plenty of process involves in developing and launching a thing, but I can't really say any of the pieces are without merit.
I've worked at companies were every line of code has to be reviewed and approved by a lawyer. Yes a lawyer (usually a former engineer that the company paid to go to law school) is reviewing some dumb little javascript or python script for license and legal compliance.
Jesus, what company was that? And how about libraries included... Will this lawyer now also need to go through that?
I think Q1 numbers will start to shake people out of their optimism. We'll see.
Most of this activity is driven by robotic trades by institutional investors. It's largely quantitative. Whether the quantitative priors are accurate, is debatable.
I'm not in the industry, but I have to believe the quants are doing what all of us are: they're throwing out the models, rewriting stuff where possible, but basically just guessing like the rest of us. And that process is a victim of their own subjectivity. And this is not just a demographic well-positioned to have a good, objective understanding of epidemiology.
Basically that's just a long winded way to say: wall street isn't looking at this correctly and is going to be surprised when quarterly results don't show the recovery they're expecting.
That's not necessarily true. First of all, 30% unemployment, while a big scary unprecedented number, represents the expected outcome of the official policy of all governments (Federal & State) , which is forced unemployment. The CARES stimulus includes a $600/week unemployment insurance _on top of_ the existing state UI. In every state, the unemployment benefit is actually higher than the median wage [1]. Businesses know this, and proactively lay off / furlough their employees so that they may collect this benefit, with the intention of having them be first-in-line for re-hiring once this all passes. The other half of the CARES stimulus includes forgivable loans to businesses with the hope that those loans can keep businesses afloat so that they may be in a position to re-hire once this all passes. Put simply, because half the stimulus is in the form of direct insurance payments to people, and unemployment is the means of receiving that, you will see high unemployment numbers. Not only is this expected, it is intended.
All this being said, it's still not certain that many of these businesses will be able to survive even with the loans/stimulus, nobody knows for sure. The market doesn't price in the scary 30% unemployment number, it prices in the expectation that this number will fall back to usual levels by next year.
The grandparent comment asked why the Dow increased today, and it's because the Fed announced $2.3T in new small-business loans, which slightly increases the percentage of businesses that may be able to weather this storm.
The logic is sound, you have a point. But I think it doesn't play out this way in reality. Maybe it's like this for your current company, but is that the general trend?
I know that during the dot com bubble bursting many years ago what you said was not the case. Could be different now but do you have any other supporting evidence?
Birx continued, "is how important behavioral change is, and how amazing Americans are at adapting to and following through on these behavioral changes." "That's what's changing the rate of new cases, and that's what will change the rate of mortality going forward," she said.
He tweeted today how Fauci and the mainstream media glossed over how the models already took into account the interventions:
https://twitter.com/michaeljburry/status/1248244146571116545
0: https://www.nbcnews.com/news/us-news/dr-deborah-birx-predict...
Sure, there are numerous accounts (read:hearsay) but there's zero physical or hard evidence.
After all this press, don't you think there'd be at least one recorded phone conversation or email that showed up in the numerous lawsuits' discovery processes?
There is literally zero physical evidence corroborating Yelp account execs' extortive practices.
- A Yelp account exec inappropriately shared another business's profile stats with Louis.
- Louis reported this privacy violation to Yelp, and Yelp decided to fire the account exec.
- The fired account exec blamed Louis for getting fired and subsequently got her friends to write negative reviews on Louis's Yelp page.
That's not evidence that Yelp practices extortion.
Not sure angry human beings are the most rational actors in most cases.
If I got laid off I'd talk about it on Twitter too. That's a natural reaction for many people. You want to commiserate with others in the same situation and share useful unemployment and job-finding resources. Hell, a big layoff gets its own hashtag.
[1] 8 USC §1184 (c)(5)(A): In the case of an alien who is provided nonimmigrant status under section 1101(a)(15)(H)(i)(b) or 1101(a)(15)(H)(ii)(b) of this title and who is dismissed from employment by the employer before the end of the period of authorized admission, the employer shall be liable for the reasonable costs of return transportation of the alien abroad.If you got fired, you don't really own the company anything anymore.
Because what do you get out of it? They don't pay you for a tip. Why do free work for a media conglomerate, even if you didn't care about the ethics?
Because they felt like it?
I can definitely see how someone might think that it is cool to cause a news story.
> Why do free work
You are overestimating the amount of "work" that would go into something like this. I do stuff all the time, just because I felt like it.
The whole world is shut down over COVID. Even with borders closed as much as possible it has spread. There is no intervention by the US government that could have been done in January that would mean the country would be open for business today.
Sure there was. Other countries did it. The US and the EU were caught unprepared but several countries in Asia did the right thing, probably because they had previous experience with SARS.
A total societal lockdown is not the only viable response to a disease like COVID-19. It might be the only viable late-stage response, but early testing, tracing, and quarantining has worked in other countries and it could have worked here if our government had been on the ball.
The fact that people are repeating this lie is mind boggling and deserve to be called out because we literally saw this coming. We had months to prepare when we saw other countries dealing with the problem and did nothing.
There had to be tons of uncertainty in a) how well people comply with the guidelines and b) how effective that compliance is. It certainly doesn't seem crazy to me more data would lead to revised values for those factors.
They could be more effective than originally expected. It could also just narrow the prediction interval--I'd bet that a lot of the "millions dead" stuff is reporting the high end, rather than the most likely outcome.
Fwiw Michael Burry, someone who has earned the right to be listened to in the face of collective thinking, is strongly arguing for the "disease is not as severe as thought".
https://twitter.com/ASlavitt/status/1248362891201392640
He makes the point that a) the new model has some optimistic assumptions, like no interstate travel and b) due to the exponential growth, a small uncertainty in R0 leads to wildly variable outcomes.
I guess I am uneasy with the "disease is not as severe" hypothesis because it's essentially unknowable. There's no objective measure of severity: it depends on knowing how to treat/prevent the disease and whether the necessary resources are available to do so.
If you kept the model exactly the same, you'd nevertheless get tighter and tighter estimates (i.e., reduced uncertainty and a lower upper bound) as more data comes in. This is just how statistics works.
Moreover, we're presumably learning stuff as we go (e.g., putting patients prone seems to work better than on their backs), so the survival rate itself is (hopefully) not stationary.
Has anyone seriously suggested that the US’s measures are being carried out anywhere near “almost perfectly”? Quite the opposite, there’s been lots of concerns voiced that people aren’t taking this seriously.
> The revised model predicts up to ~127k deaths, which is certainly less, but not egregiously so
It’s a nearly 40% reduction!
2) Biological data is often a nightmare to work with. Estimates about behavior too. Getting something within an order of magnitude is often not too shabby.
3) Errors ('up to') are sensitive.
Here's a toy example. Suppose you think two numbers are each around 5, but the data are consistent with anywhere between 0-10. The sum of these numbers must be between 0-20 (low case: 0 + 0 = 0, high: 10 + 10 = 20), and their product between 0-100 (0 x 0 = 0; 10 x 10 = 100).
More data comes in and you can estimate each value more precisely: now you know they're somewhere between 4-6. You know the sum is actually between 8-12, and the product between 16-36. That's a massive decrease in the upper bound (64 percent for the product!) but literally nothing has changed except for the increased precision.
The COVID models have exactly this problem--none of the parameters are known exactly--and the outcome is some function of combining them. Moreoever, we're learning more about what factors matter AND how to fight the virus.
Basically, Louis got the rep fired, and the rep went haywire. This doesn't suggest Yelp has extortive sales practices. If anything, Yelp made the right decision to fire this sales rep who breached privacy protocol.
When hundreds of small business owners make accusations against one company like this, and people like Louis being tangible evidence forward, a full investigation of these practices is warranted, which hasn’t happened yet, to my knowledge.
This smells like a toxic sales culture that enables people to take advantage of small businesses as long as they don’t get caught. Many small business owners probably don’t have the energy or ability to do the research that Louis did, but his findings were pretty shocking.
How many more small business owners need to take time away from revenue generating activity to discover this kind of coordination before you’re satisfied that there’s a real issue here?
While it varies with health care rationing, think CFR is still a useful measure of disease severity and allows us to situate COVID vs. the flu. Knowing the real CFR depends right now on how we calculate the denominator. Burry had analysis that 4% of the undiagnosed asymptomatic Danish population had COVID-19 per blood donation data, which suggests the CFR is 80x less severe than official figures in Denmark.
Anecdotally the disease entered countries weeks, arguably months before any cases were officially announced, making it likely that the denominator is an order of magnitude greater than official stats, and thus CFR an order of mag less severe.
I never moved the goalpost. My claim has always been that there is zero physical evidence of Yelp extorting small businesses.
The posted video is not evidence of Yelp extorting business. It's an example of a fired Yelp employee blaming a business owner for getting fired, and taking it out on the business owner's Yelp page. That is not extortion on behalf of Yelp.
> When hundreds of small business owners make accusations against one company like this, and people like Louis being tangible evidence forward, a full investigation of these practices is warranted, which hasn’t happened yet, to my knowledge.
There have been countless lawsuits filed against Yelp for extortion. All of them have been dismissed -- not settled; dismissed. Google is your friend.
> These projects might be pointless on a small app, but in a large business might be worth millions to the company.
With enough traffic and revenue, you'll get a positive return on hiring a bunch of engineers to optimize things that wouldn't be worth it for smaller sites. With enough engineers you'll get a positive return on hiring engineers to make engineering more efficient.
It's only natural in that case that as traffic and revenue drops, the ROI calculation changes and it suddenly becomes better to lay those people off.
And that's just engineering. I can imagine that in this downturn the sales department just isn't generating new revenue. What brick and mortar business is going to advertise right now? It only makes sense to lay off as much of the sales teams as possible. You can hire them back later.
Very insightful! As a corollary, you should not staff up until there is something to optimize.
The problem is that no modern tech company I know actually measures the ROI of this (positive or negative) so it's completely unrealistic to determine the IRR on it. In other words, there might be a scenario where it actually is more profitable NOT to do it.
On a sports team, coaches are rewarded for championships. There is no room for waste, and underperforming people get cut.
Most sports teams rosters are restricted by league rules. However coaching staffs are not, and they have grown tremendously in recent years, as have college athletic department staffs. When someone actually does take a hard look, these staffs seem exceptionally bloated and wasteful.
https://www.baltimoresun.com/news/bs-xpm-2006-10-31-06103101...
When Vince Lombardi began coaching the Green Bay Packers in 1959, he had four assistants. This year, Denver Broncos coach Mike Shanahan has 21.
http://www.espn.com/espn/page2/story/_/page/easterbrook%2F10...
Ohio State lists 458 people in its athletic department. There are 192 faculty members in Ohio State's English department, with a support staff of about 50.
https://www.newsobserver.com/sports/college/acc/article16325...
One assistant coach is called the recruiting coordinator, but he’s backed by a Director of Player Personnel, an Assistant Director of Player Personnel, a Coordinator of On-Campus Recruiting and a Recruiting Assistant. There are three video coordinators.
2019 Denver Broncos had 23 assistants, 24 total coaching staff including the head coach.
Another explanation lies in reputation mining. Think of it like doing something profitable but unsustainable.
Curious what kind of experience or data sources you base your first graph on — the Pareto principle piece makes sense. But isn’t it possible the very end of the tail is still profitable, albeit less so, than the head?
i think it's more likely that no business will know in advance who those 100 employees that create value are. It might even be that the combination of those 100 creates value beyond the sum of them individually (lets say, they are in one team).
There are also mundane work - fixing bugs or upgrading libraries, as well as keeping up the infrastructure running.
And then there's the middle management - that comes from the mis-trust that upper management generally have for the "grunts", and this happens all the way thru the organization.
> private equity exists...
and if you look at those companies that did this - very few of them becomes the next big thing. Very few of them actually innovate. Very few of them, even survive.
Private equity is really about taking risks with a failing business, e.g. buying it really cheap, and cut the fat and ride out the storm for hopefully a better future. I dont think any private equity will buy a company that isn't failing in some ways, and try to "make it better".
I'm not personally a fan of it, but I get why it works this way. The financial loss if you break something adds up in an excruciating fashion on a per hour basis.
That's half of my point--you'd expect the confidence interval to narrow with more data, regardless of what's going on. On top of that, you've got model error and non-stationarity (e.g., better care is discovered, driving the mortality rate down), which can't be reflected in the confidence interval.
Here's one of the modelling paper. The discussion of uncertainty starts on page 4: https://www.medrxiv.org/content/10.1101/2020.03.27.20043752v...