Tell HN: Confluent laying off 8% of staff It hasn't been posted publicly but staff recieved an email from the CEO this morning announcing that 8% of staff have been cut in a "restructuring". This is especially surprising because staff have repeatedly been told that the company has strong cash reserves and is on a trajectory to profitability, even with market headwinds. No word on the breakdown by department or role. |
Today we’re announcing a very hard change we have to make. We are rolling out a set of adjustments to our 2023 plan oriented around driving additional efficiency. As part of this we are reducing our workforce by about 8%. If you are one of the individuals whose role is impacted, you will receive a calendar invite for a conversation with a senior leader today. If you are outside of the U.S. there may be slightly different timelines based on local laws. If you are one of the individuals whose role is not impacted, you will receive a follow-up email letting you know you are not impacted.
Why we are doing this
This decision was not made lightly. However, I believe this is a necessary change to set us up for success in the year ahead.
To many, I’m sure this news comes as a shock, though those following the broader tech ecosystem closely may be less surprised. In this challenging economic environment, sales cycles are taking longer and many of our deals are more scrutinized by customers. This puts pressure on growth. Meanwhile there has also been a significant shift in the market, resetting expectations for the tech sector. This rapid change in the world around us, left our plans for the year increasingly squeezed between downward pressure on growth from a slowing economy and upwards pressure on efficiency from the rapid change in the market. Ultimately, we had optimized some aspects of our operations for a very different world than we found ourselves operating in. The responsibility for that falls squarely on me.
In light of this we reevaluated our plans for the year, and have made the decision to accelerate our path to profitability, while still delivering high growth. In our new plan, we expect to grow revenue by approximately 30% in 2023 and exit Q4 2023 with breakeven non-GAAP operating margin.
At my request, everyone on the executive team took a step back to look at our existing expenses and headcount. We wanted to ensure we had fully funded every essential aspect of our near term execution and longer term plans. But we knew that in the rapid growth over the last 8 years, there was room for improvements in efficiency without compromising our longer term plans. With this in mind we made a set of targeted cuts that enable a more rapid path to profitability while maintaining high growth. We’ll talk through these changes in the days ahead.
Our plan for departures
Unfortunately, we are saying goodbye to many friends and colleagues across the company. We want to do this in a way that ensures we are doing right by our departing team members.
In the U.S., impacted employees will be offered severance, healthcare coverage, outplacement services, immigration support as needed and some forward vesting of RSUs. Those outside the U.S. will receive a broadly similar package but with variations based on the requirements of local laws.
What’s next?
To those who are leaving, I want to say thank you. You have made important contributions to Confluent and I have the utmost respect for all of you.
To those who remain, I know a change like this is jarring and disruptive. We’ll be adjusting some team structures and our plans for the year in light of this change. We’ll be discussing this plan in greater detail at our company kick off next week.
Despite the difficult environment, I remain very optimistic about our future. We are a leader in a massive, highly strategic space. We have a huge opportunity to build a major new data platform that can be the central nervous system of every company.
I want to personally thank all of you for being here, showing up, and helping build Confluent into the enduring company we all know it can be.
-Jay
to soften the blow?
because they're speaking to investors, often institutional for whom it's more useful to know the rates and who don't particularly care about the lives of the employees joining the job-seekers?
Perhaps it is a disconnect about the audience. The people getting fired are not the audience of the message which communicates their termination. This is inhuman, but what else would one expect from capitalism.
I’ve fired people, for cause and in person, for generic layoffs, and for attrition targets. It is hard, and personal. I never talk about responsibility or blame, or how hard it was for me. I have bad news for you. No need to be flowery about it. I owe them a straightforward conversation.
This is highly personal for me since I was part of the early Confluent growth story, having seen the company grow from about 150 folks to 1600+ headcount. I was amazed to see the quality of people who joined the company as each person was highly skilled, motivated and talented in their trades across all the functions of the organization.
I treasured the time the team spent at the happy hour every friday and no pay thursday lunch in Palo Alto, as we bonded and built friendships for life.
I understand that this is a difficult time for everyone involved, and I want to express my deepest compassion for those who have been affected by the layoffs, including everyone in the technology sector as a whole. Losing a job can be a traumatic experience, and my heart goes out to all of those who are facing this challenge.
I hope that you can find new opportunities quickly and that this difficult period in your life is as short as possible. Please know that you are in my thoughts and that I wish you all the best during this difficult time.
If you need to speak to someone about how to navigate this cycle, feel free to hit me up. I want to chat with everyone.
I have seen market cycles both good times and bad times. I still remember back in the day when my graduation ceremony coincided with the 2008 market crash. As a new graduate, it felt like the end of the world, however once I refocused my energies to dissect the situation, I found an abundance of opportunities in the downcycle. I realized there is an opportunity in every change and that each opportunity is different and unique in perspective.
I also wanted to add that we need to capture this energy, across the technology sector in general, to reconnect, chat, share ideas and be there for each other, be part of this giant pack, be part of the confluent mafia, that everyone who is still wearing the golden handcuff will be one day regretful. I hope you do realize that this is a pivotal moment that we get to be a part of, that is to re-evaluate our strenghts and re-align expectations to explore new opportunities and position ourselves for the next stage of growth story.
As per the reports, Venture capitalists are burdened with hundreds of billions of dollars that they can't invest in later-stage companies due to economic conditions. There has probably literally never been a better time in history to work on solving real-world problems.
The acceleration of these highly competent people hitting the labor market at the same time is going to create an burst of innovation. This will create an opportunity that will certainly be a prominent pillar in the next economic recovery.
For example, here is a recent post on what others who have left Confluent have been upto: https://www.linkedin.com/feed/update/urn:li:activity:6953693...
I know some of us got more severance than others, and I know some of us are in more delicate circumstances than others, but let's take a minute to consider the possibilities with each other and at least have a little fun thinking out of the box about what the future could bring.
I hope the following verse from Bhagvad Gita will bring peace and strength to you in the current situation: "The friction between our desire for the predictable and the mutability of life makes us feel a bit lost. Rather than rail against change, which the Gita says is inherent in all things, the key is to broaden our view by becoming less self-focused, less ruled by our ego. Change the inputs and you change the story. That shift occurs when we deepen our level of consciousness. The only place of unchanging truth, says the Gita, is internal, where we come into alignment with the Self."
Use all your power to free the senses from attachment and aversion alike, and live in the full wisdom of the Self. —Bhagavad Gita, 2.68
> Ultimately, we had optimized some aspects of our operations for a very different world than we found ourselves operating in. The responsibility for that falls squarely on me.
[1]: https://www.publicnow.com/view/CEA41F7D5BB5C6CFF1144A3A9C462...
/s
[1]: https://www.mcsweeneys.net/articles/macroeconomic-changes-ha...
Interesting plan, too bad operating margin doesn't mean profitable.
In 2022 Q3 the 9month cumulative sums show a revenue of 417M with net loss of 346M. Growing 417M by 30% to say 550M still would be a loss of 204M. If they also cut operating expenses by 33% then they could become profitable though.
They will have marketing folks, lawyers, they will almost certainly do more testing than you, they are going to have to support many many more configurations than you, they have people all over the world, they have a support staff, they have upstream contributors, they have backoffice people, ...
Nothing against you or your team but what you're doing does in no way compare to building a fully fledget product for on-prem and as a SaaS.
Companies hire tech workers to stifle their competition; whilst keeping their workers 'sedated' on fake projects (i.e. projects that are paraded as important, but the 'inner-circle' knows well its just to keep the nerds happy). During tough times, its not unreasonable for a company to trim their fat. Personally, tech and academia has been bloated for over a decade now. So no foul here.
And sadly the easiest answer is "we ARE jumping off the bridge, see?"
It's up to companies to push back against market pressure to maintain long term progress, but it's a tough balancing act to do that while avoiding being punished by investors.
When sales drop, revenue also falls. When revenue falls, models get re-evaluated and numbers get re-calculated. Reducing expenses becomes a priority.
When reducing expenses becomes a priority, SaaS contracts get evaluated very closely. Unnecessary seats are removed. Contracts are re-negotiated. Income for SaaS companies like Confluent drop rapidly, and they may continue to drop more. So I don't think this is blind trend-following, I think this is a rational response to a rapidly changing market.
A company can be profitable and it can still make sense to lay off certain employees. In-house recruiter positions are some of the first to be cut right now because companies are pulling back on hiring. If you have a hiring freeze and very low hiring forecasts for the next year, why would you continue to employee a lot of recruiters?
Market conditions change. Companies adapt to the change. When you have people in positions that are seeing less demand for the coming year, it doesn't make sense to keep them on the payroll and have them sit idle. It's rational to readjust the workforce.
Nobody likes getting laid off, but no position is truly permanent.
This has been a long time coming. Some of the numbers I have been seeing for these contracts are truly mindblowing for the value delivered. The days of gouging enterprise on these random non-critical SaaS integrations is probably over.
The one that still really gets me is Slack. Even medium sized companies are paying millions per year for a glorified IRC client. It just doesn't add up.
A social contagion if you will. It doesn’t seem rational at all at this point.
Hopefully some of the more naive people in the industry learn something from this. Your employer would happily kill your if it were legal and they made a cent more doing so, let alone something less like fire you.
Layoffs are rational and are common in downward cycles.
I get the feeling that a lot of the shock and awe here is due to age and a lot of people starting their careers during an extended boom period, particularly in tech which was getting absurd. The last few years in particular were far from rational.
Now the Fed is raising interest rates, housing is cooling, cheap money is no more ... and as a result you get a downward business cycle resulting in layoffs.
I don't see anything new here that hasn't happened over and over again ... but I've been in the industry for decades with multiple companies and sectors.
These companies aren't charities, they aren't meant to retain jobs just because they are profitable, and they definetly aren't your friend. Many of them are publically traded, which at the end of the day are beholden to one and one thing only, the shareholders.
All these companies have no vision, and are run by people only interested in saving their jobs and/or preparing for their next one.
https://news.stanford.edu/2022/12/05/explains-recent-tech-la...
Whether the storm actually hits, what gets wrecked, what doesn’t. That is a completely separate issue to these people.
Inflation is almost down to normal, employment is still high and will remain so as long as the construction sector avoids layoffs due to the coming cash infusion from federal spending bills.
Seems to me the only storm coming is the one created by these same execs, though I understand each of them is incentivized to follow the crowd.
> Not surprising. Every company is going to take the opportunity to trim costs when it doesn't affect their PR as much as it would any other time.
I'm pretty sure this is really what's going on here. These CEO's are killing all of these jobs while they can (seemingly without any repercussions).
I was talking with my dad about these layoffs and one of the interesting things we talked about is how different the loyalty formula is nowadays. My dad grew up during a time when folks happily worked for, and were loyal to, one company sometimes for decades. Nowadays, sadly, it's not smart to trust any of these companies for more than a few years. These layoffs prove that. Whether it's companies laying off folks who've been at the company for 20 years (see: Google) or companies laying off new hires, any loyalty seems to be one-sided.
"Activist investor TCI Fund Management is calling on Google's parent Alphabet to pursue aggressive cost cutting on the back of a hiring spree during the pandemic, claiming the business could be more efficiently run."
- https://www.theregister.com/2022/11/16/tci_fund_google_cut_c...
I would assume Google was no the only one to receive such a letter, nor were TCI Fund Management the only investment fund sending out such letters
I don't want to give reactionary CEOs too much credit, but I dont think it's fair to describe it as blind.
If Confluent was building out new product features and "investing in growth" hoping to sell those features to expand customer uptake, should they just blindly keep going?
Sure, there are probably some 20 something CEOs right now running startups that are like OMG I guess we should lay off too, but it's such a naive take.
CEOs can't just will the market to bear whatever their vision is, they have to "make something people want". And if there are less people to sell to, well, you're gonna make less money...
The 4Q22 numbers are out. US GDP increased nearly 3%. The job market remains super tight for many classes of workers. There's simply no evidence of a broader recession.
Are there headwinds? Sure! Household debt is up, consumer spending is down as a consequence--but this is relative to a previous year when we were still feeling the effects of the COVID stimulus--and interest rates are up which will drive down debt-funded investment.
But, companies are cutting because 1) some got bloated during the COVID hiring surge and now need to cut back, 2) some always wanted to cut headcount but they didn't want to do it without air cover, and 3) some just follow the leader.
Say you've been wanting to close down an unproductive division and let go of low-performing employees in other divisions for a few years now. You sure as hell weren't going to do that in early 2022, when you'd risk a lot of other employees jumping ship at the first signs of cracks in the house. But in 2023, you can do layoffs and get away with it.
PS. No one employee was complaining when these companies were in a hiring spree and could see it was not sustainable. Startup had a hard time competing with the salaries offered by these orgs.
It seems much more likely to me that many companies over hired and/or have 2-4% of their staff they were planning on letting go anyway and now that so many other companies are doing layoffs it allowed them to cut other low performers without being the only company in the news.
We talk all the time about large company bloat. This just seems like normal annual pruning + a little extra from over hiring during covid + a chance to cut xyz projects that havent worked out or someone doesnt like or whatever without catching as much bad pr as they normally would.
This is absolutely happening, and if not from the C Suite then from the board and other investors.
Yes, virtually all companies have plenty of bloat that can be trimmed, but trimming it a year ago would be a negative signal to investors. Now it's a positive signal, so layoffs are happening. They will continue to happen until companies are punished for it rather than being rewarded for it.
that would be illegal.
Apple stands out as the contrarian that didn't panic hire. They will probably come out ahead at the end of all this as their reward.
The thing is, in a lot of the cases, the companies preserving cash by laying off workers aren't really saving a significant amount of cash, compared to the amount they have on hand. So, it turns into some sort of lemming behavior.
1) we just came out of a very long period of "easy money" that inflated valuations and gave founders/boards a sense that money would always be there
2) when your customers are laying off / reducing spend, your revenues usually go down
3) the future is very uncertain
Take all of these things together and boards are asking teams to be as prudent as possible which unfortunately means, bringing costs down.
These companies dont know more than you and I. They are acting in panic and in a bad faith towards their employees.
Alternatively, we are in a unique window where cutting underperforming projects whole-cloth can be done with almost no signaling risk (had this happened in 2021, people would assume the worst), so CEO's are cutting everything they don't like now, assuming they won't be able to do it as easily later.
They’d all have had to collude in December for this to happen. Laying off people in large companies takes a sufficient amount of planning, and isn’t accomplished in days. They need to hire external consultants to help, even.
The reality however,could be somewhere in the middle as always, IMO.
You are correct. And for some reason they call themselves "leadership."
You're not on your own with that idea. It's the blind leading the blind.
- FAANG started to offer free drinks in the office? Every startup begins to do the same
- Agile coaches are hired at FAANG? Every damn startup needs their own Agile coaches as well
- "Think customer first" was coined by... and then every startup made it its core value
- Staff, Principal, VP engineer levels are introduced at FAANG... you know the drill
- Microservices...
Every tech company out there dies to be Google or Facebook or Apple. They will copy every single thing from them.
As someone who lived through the .COM crash and implosion and then 2008, any company with "strong cash reserves" and "trajectory to profitability" is not making more money than they are spending. They are, to use the SV term - losing runway. This is catastrophic because it's infeasible to raise money right now to extend the runway. If the plane is not airborne (making significantly more money than they are consuming) by the end of the runway, they crash and burn, taking themselves and the company's investors with them.
My experience has been highly capitalized, but running way in the red are the worst possible place to hide when a significant economic event occurs. Confluent has raised capital 11 times (from a quick crunchbase article) and has a product that is open source core, giving its customers an escape path.
I'd also point out that this is a bit snowflake. The average annual corporate turnover rate is way higher then this number. If not for the immediacy of the headwinds, almost every company could handle this by simply not rehiring after attrition.
https://hbr.org/2022/12/what-companies-still-get-wrong-about...
We need to circulate this information as wide and far as possible. Perhaps at least some well meaning CEOs will grow a backbone to at least challenge the board.
That essentially rules out any VC-related startup. VC's basically are a huge force-multiplier during up markets and black holes in recessionary periods due to the growth expectations (and the willingness to blank-check funding until the revenue goals are met).
Start ups are 2 out of 3.
The thesis is that with layoffs the outcome is worse than without. So we can make all kinds of rhetorical debates, but the data seems to suggest for some causal reason companies that do layoff do worse off in the subsequent years.
When you're looking for a job, keep the companies previous layoffs in mind. Are they stable, or do they acquire and jettison?
Alas, money-printing machines emit strong reality-distortion fields. As long as it's working, they'll have no issue finding people to hire.
[1]: https://goomics.net
[2]: https://goomics.net/240/, 2018Q1
[3]: https://goomics.net/155/ 2012Q
Was this an "open-source folks will do it for free anyhow" or someone wanting to save their work from obsolence?
(Earlier flagged post) https://news.ycombinator.com/item?id=34527670
I doubt it. Open-sourcing anything is a lot of work. Managing open-source projects is a lot of work. There are no guarantees that that project will even get any external development traction or mindshare, and if this is still an important component to you, you'll be paying developers to build it out anyway.
Honestly, the tech industry was due for some churn from an employer perspective, and all this talent circulating is going to up the competition for company's products.
The US Federal Reserve literally says they are committed to bringing the US to a recession to curb inflation (if it is what it takes to do so). So while strong economic numbers are a "good thing", it just means the current numbers will keep getting worse until it's a recession. (Or the Fed will change course. Who knows.)
There's an increasing atmosphere of bacchanalia in the markets - buy every dip, long every thing because they don't believe that the money can be unprinted and inflation thwarted. Might as well pump it up and make some money and hopefully, swing into some meaningful assets before it all comes crashing down.
Personally, I believe American capitalism is in the ICU right now. There's too much money in the system, and there's too much concern over the long-term viability of the USD as the reserve currency. All that money printing coupled with the war in Ukraine, American sanctions, and increasing refusal of the non-Nato countries to play ball with America (espcially China) means that the demand for all the USD printed is never going to be the same.
It's going to get very, very interesting in the coming couple of years.
"Our products are better than ever" "Our revenue per employee is better than ever"
Why does cutting costs have to be the only way to please investors?
You don't cut costs if they aren't costs.
If you hired employees to do something and they're making you money hand over fist, you don't fire them. They're not an expense. They're a profit center.
[1]: https://www.technologyreview.com/2022/11/08/1062886/heres-ho...
Goal is to cut costs, projections are likely decreasing / stagnant revenue.
I think it's silly when companies present the nonsensical rationale of "due to prevailing economic conditions" without qualification. As if these conditions (everyone else is doing it for some reason, so let's ride the stock boost) is obvious, decided, and not worth talking about.
I think it's gotten to be a game of macro economic manipulation to get to fed to flood the market with lush money again.
I feel like that the statement that you are on a path to breakeven, means absolutely nothing. And that you should ALWAYS consider yourself to be in a high risk situation if your company is losing money.
Of course often the appropriate 5-10% aren't actually the target of layoffs, but that's an orthogonal problem.
This period is just giving us a chance to shed those people without cultural ramifications.
Layoffs suck-they hurt everyone involved (except maybe for the shareholders?) and are a big big deal for each individual that it affects.
That being said, it doesn't take a genius to see that they are very useful from a company perspective. Given how difficult it is to fire underperformers, layoffs allow them to cut a huge swathe of underperformers (and, realistically, people they don't like) without opening themselves up to endless litigation. Yes, the justification can be as simple as "the economy looks like there is an economic downturn and see? the other companies in our industry are doing it too."
Smart companies treat it as a tool and use it sparingly, dumb companies over use it and kneecap themselves for the future.
The problem is that there's a selection bias for attrition. It's possible that your worst employees are the ones who stick around the longest.
That's another failure of management, rather than the line employees.
Keep a eye on linkedIn for connections who are hiring and make sure to stay connected.
Sunday - Stack | Queue | Priority Queue (Heap)
Monday - String | Math
Tuesday - Tree | Dynamic Programming
Wednesday - BFS | DFS
Thursday - Graph
Friday - Linked List
Saturday - SabbathAlso most importantly don't read the news. I had just started working in 2008 and honestly didn't really pay attention to the recession and luckily it never affected me materially or mentally.
If things get bad be prepared to make significant changes, like moving to an area with more opportunity, etc.
-or-
b) We are in trouble, so we are going to address this now by a sizeable layoff, but with generous layoff terms. We will also kill anything that doesn't have a clear trajectory to be sucessfull at runway length * 0.75.
Where you want to avoid is in a company that does sequential waves of 5-10% layoff. That means that that they didn't focus enough and are now past V1, without enough velocity to takeoff (https://en.wikipedia.org/wiki/V_speeds). That's when the company suddeny laysoff the vast majority of their workers with crappy layoff terms.
If you're making money and don't owe money, you can't go bankrupt.
Of course, profitable companies can become unprofitable, especially in a negative environment, so the more profitable it is, the safer it is.
The only thing that stops the timer on the bomb is taking in more money than you spend.
Someone watches GOT ;)
It's entirely possible to believe your job is transactional while expecting accountability for all underperforming colleagues, at all levels. Rather than just the rank-and-file.
In practice, accountability only seems to go up so far. I shortly did consulting for a company that did large layoffs in early COVID days. The board played the "we take responsibility" card, cut in their own salaries, but scratch a little bit under the fresh coat of paint and most of the board's income isn't that mostly symbolic salary. The ones effectively paying the price were the file and rank, as usual.
https://www.marketscreener.com/quote/stock/CONFLUENT-INC-124...
A company I consult for is decidedly guilty of this. Not one month ago it was blue skys and calm waters. This week? “Full responsibility.”
Did they get their end of 2022 bonuses? Absolutely. I fail to see how the first two weeks of 2023 could be so different from the last two of 2022. That’s because they had this in the planning stage for a while.
The second point, a job is always transactional, you exchange labor for money and at any given time, either party can stop that transaction
Also, if you are a tech person in any major city in the US, you are more than likely making at least twice the median wage in that city. If others can survive making half of what you’re making, you should be able to save enough to weather a brief storm.
Of course I understand things are different if you are here on H1B.
It's also worth noting many places enshrine in law protections for layoffs because of the power imbalance between employees and employers.
The company can also initiate a vote of all employees to remove this cut of CXO compensations, so that if CXO is really doing well overall I'm sure he will be recognized and his compensation defended by the whole company.
CEO makes a mistake, I get laid off. CEO takes full responsibility.
Precisely. Corporations made jobs always transactional. Now the employees and the public are making corporations transactional by affording them no sympathy or loyalty whatsoever.
If your comment ("CEO takes full responsibility") is suggesting s/he should be fired or compensation reduced because of their misread of the future, that would be quite silly.
Companies don't fire people for making mistakes (in fact if you make no mistakes you probably should be let go because you're not pushing the boundaries enough or taking sufficient risk). Reducing comp as punishment would also not make sense, for obvious reasons.
If leadership is financially incentivized for positive outcomes, why shouldn't they carry downside financial risk as well?
In your hyper-financialized viewpoint, the CEO's job should be to make as much money for him/herself as possible.
If he suffers no negative consequences then in what way is he taking responsibility? This is just meaningless psychobabble. He could not say it and it would be no different.
Then again outside of visa holders they are naive.
I’ve been working professionally for 25+ years and there isn’t a day after my first year after I built up savings that I depended on my employer instead of my employability to support my addiction to food and shelter.
In the case of Confluent, who depends on a non profitable company to be a sustainable place of unemployment? You go in knowing that any given day that you are going to be laid off and save accordingly.
And no when I graduated from college I wasn’t making an above average salary. I started out making $30K and found the cheapest apartment I could until I saved money.
Plus either way you're cutting expenses and maybe getting rid of some under performers.
Being wrong in a crowd means you have no thought process at all.
All the big companies doing layoffs are in the stagnation phase. "minimise disaster instead of maximising being the winner" is exactly that.
They can be told that products are great, or employees are producing a lot, but the only thing that matters to investors is the money. And so, when you're underperforming compared to others in your market, you have to do what appeases the shareholders, and that involves culling employees.
https://hbr.org/2018/05/layoffs-that-dont-break-your-company
https://hbr.org/2022/12/what-companies-still-get-wrong-about...
What downward cycle?
All I'm hearing is panic and hand-wringing about the economy, but I don't see what the problem is.
We had a "recession" in Q1 and Q2 of 2022. GDP dropped from 20,006 to a low of 19,895, then it went right back to its previous growth path.
Inflation is high, but it's dropping. It maxed out at 9.1% in June of 2022. Now it's down to 6.5% and expected to drop in the upcoming update (Feb 14).
We weathered a global pandemic, subsequent supply chain issues, and a war on the other side of the world that disrupted the energy economy. We're doing great, but people are fretting like it's 2008.
I don't have access to the data, but it's quite possible with interest rates rising, high inflation, and tightening monetary policy that they are seeing slowing growth/sales. Companies want to get out ahead of that, especially with the massive (and frankly absurd) hiring that these companies did over the last 2 years.
I'm not buying that Microsoft laid of people because Google laid off people, and Spotify laid off people because Microsoft laid off people. Somewhat unfortunately, these public companies are expected to show constant revenue growth, and they will "trim the fat" at a moments notice.
Such as? This seems super hand-wavy.
The pandemic already happened. Inflation peaked last summer, after the Fed responded. The supply chain crunch is resolved or resolving.
They had the bad news months or years ago. What are these forward-looking metrics that are worse than what we already experienced in the last few years, and why isn't the entire market panicking over them?
I’m just stating a hypothesis on the perspective of, say such CEO’s. To them it’s not pack behavior based on hearsay.
Huh? Normal inflation in the US is 2% - that's the Fed's target.
Last month, inflation was 6.5%.
Being 250% above target is not "normal".
Instantaneous inflation in December 2022 annualizes to 2%.
Food inflation increased over November. Shelter index increased at an annualized rate of nearly 10%.
Sometimes, you have to dig deeper than the headline.
I think it has more to do with cheap money not being cheap anymore.
[1] https://www.fxempire.com/macro/united-states/interest-rate
Replacing slack with a comparable like Teams or Gchat is at least a step back in user-friendliness that will be grumbled about by engineers and others, and if you use a lot of integrations there might be significant switching costs.
Moving away from instant messaging as a communication pattern sounds great to me, but good luck convincing folks to change company culture that significantly.
I'd hope there's lots of things higher on the list of effective cost savings before trying to migrate that many users, and integrations, and history.
Such migrations are happening and will continue to happen, but I expect most will go about as well as the one discussed in a sibling comment.
This is going to sound stupid because I didn't put any real thought into it but: shouldn't open source advocates also be against calling the GPL open source? It doesn't just constrain what you are permitted to do it also obligates you to take certain actions. I like the GPL personally and it's obviously different from these anti-SaaS licenses but isn't all of this really about freedom?
Words have defined meanings and are important for conveying information and communicating. If you just make up definitions to commonly understood terms, it leads to confusion.
>To me something is open source if ...
So you took a precisely defined phrase[1] that many people put a lot of thought and negotiation into (working with various stakeholders), has been in wide use for decades by thousands of companies and organizations, and hundreds of thousands (or millions) of developers, threw that definition out, and created your own definition because of reasons - how does help anything?
>This is going to sound stupid because I didn't put any real thought into it
Hmmm.
Ultimately, the comp for the CEO is set by the board and that is determined by supply/demand (which inputes performance of the CEO). Penalizing someone for one mistake in anticipating the future would make a company so risk averse that returns would be very low - not a good outcome for the owners.
Don't just plan - implement that plan now. You won't be any worse off, and will be much better prepared if the hammer actually falls.
If the hammer does NOT fall, then the money you saved while in this mode is just a nice little problem to have - pay down other debt, save it, etc...
I went through the 2000 .com bust and learned this lesson in time for the 2008 slowdown. It really helped and also allowed me to trim some unwanted expenses long term.
For example, you might analyze your spending and realize that you’d save a lot of money by cutting daily Starbucks and avocado toast and that it’s trivial to make that at home. So you do that now to get some extra savings with no pain. You might also realize that moving back in with your parents is the single biggest thing you could do for your budget, but not a thing you would do unless you were laid off. But you could still have the conversation and be ready to pull that ripcord fast instead of waiting till you were out of money after a layoff.
I have no idea if Confluent overstaffed. I admit I'm surprised to hear they aren't profitable though.
That is irrelevant, since they are taking full responsibility anyway, right?
Just kidding.
NB: I'm just playing along for fun, never been involved in any way with sex work or sex workers.
I'm uncertain if the data has a survivorship bias or not (did not review the actual academic papers). Your and I's conjecture needn't assume it.
None the less we're not talking about seed/Series A companies here. We're talking about late stage and large publics w/ 100s Millions to Billions of cash.
That said, when someone says they're taking full responsibility there's an implication that they're going to take on pain or consequences. I don't say I'm taking full responsibility for washing my car when it gets dirty. Not saying he should be fired or take a pay cut, just that he said something dumb and did a terrible job of reading the room.
In fact, and this may be unpopular, I think they will be greatly beneficial long term.
Consider:
- These companies grew at greatly-expanded rates over the past few years. Google notoriously added 20% per year for 7 years straight, doubling their staff from 2017-2023. After layoffs, Google will still be right near ALL-TIME-HIGHS in staffing. Same with most of these firms. Small layoffs following the fastest growth period in their history isn't some catastrophe for their business
- Most roles being reduced at most companies are not product-creating but administrative. Lots of HR, hiring, marketing, middle managers, getting axed. If companies predict less hiring or lower ad budgets... then reducing those divisions makes sense. If you doubled your hiring team while you were hiring 20% per year, but now you expect to stay steady and only replace attrition ... what would you do with all that hiring staff?
The real damage to their long term prospects was over-hiring the past 3 years and saddling their businesses with a major problem.
So, the real damage was the people who ordered to over hire (usually top-level executives). If any, they should be lay off to actually mitigate long-term damage.
No, the CEO is meant to optimize not for themselves, but for the owners of the company. If the CEO didn't do that, the board should fire them.
Underperformance is not a single mistake. It's a pattern of behaviors that compound.
Now if these CEOs don't manage to turn the ship around in the next couple years it probably is in fact time to look for a replacement.
I've been laid off. At the time, I had plenty of savings and nobody depending on me besides my dog. I took some time off and was later able to find a new job. The company didn't have any H-1Bs at the time, but if it did they certainly would've been in a much worse situation than I was and clearly more deserving of empathy.
Did you feel any empathy when the Disney CEO was fired with a multi million dollar severance package? Things are different for different people.
"Last month, inflation was 6.5%" is not correct by any reading of this data! Your link makes it clear that was inflation over the course of 2022, as I said in clunkier language. The graph on that same first page shows most of that inflation happened in the first 6 months of 2022.
The average of the last 6 months in that graph is 0.15, or ~1.8% annualized. That's an arbitrary cutoff (including July's 1.3 shoots up to 3.9% annualized!), but it seems clear we're on the right track. If the next 6 months look similar to the last 6, we will look back and say inflation was already under control before 2022 ended.
If "being on the right track" means that an increase in one category can't be offset by a decrease in another, that seems like an impossible bar to clear.
It's not obvious to me why inflation there has increased even as mortgage rates have skyrocketed due to the fed; people/institutions feel safer betting on housing prices than on stocks, lately?
maybe the CEO didn't predict the future however many months or years ago to get to a point where no layoffs would've been necessary, but maybe this would've been at the cost of less growth, possibly having worse consequences
the idea of "humanity" is completely opaque, it's not that hard to look at the reality instead
Humanity is not opaque unless you make it so, like this particular system does. It's just people.
please explain how "humanity" solves this
Hah. Suggesting an unworkable solution is of course trivial, never mind the centuries of debate of all the shades of economic systems like cutthroat capitalism, democratic socialism, dictatorship of the proletariat and everything in between.
I mean, this is like saying Robin Hood was a serious philosopher of social economics instead of a folktale, and "robbing the rich to feed the poor" is a legit strategy that can and should be implemented under the current capitalist system.
And somehow you'd think I was the arrogant one around here for saying there's a lot we don't understand (especially about humanity, i.e. ourselves!).
Also I think the scale of the company you work at has an impact on this. The larger the company, the less personal treatment I would expect.
You get COBRA through your former employer. Been there done that. I had a pre-existing condition that I couldn’t get health insurance individually (pre-ACA)
> What happens if you have a personal emergency during your job search? What do you do if you have existing debt from a previous emergency, medical crisis, etc?
You talk to the people and make arrangements or you just don’t pay them until you can afford to. Your priority becomes house, food, shelter, car.
How do you think people making much less than tech workers handle it?
They don't. That doesn't make being laid off not worth sympathy, though! You don't know someone's personal life circumstances. It's not helpful to just presume they'll be okay and therefore it isn't worth advocating for better treatment.
a) how board members are compensated
b) what type of people are appointed to boards
A good start is https://www.investopedia.com/articles/wealth-management/0404...
The rest is you going on a tangent.
This is also why the Fed has been trying to engineer a soft recession. As long as labor markets are tight, there will be sustained wage inflation. And as long as there is wage inflation, there will be people willing to pay higher rates for longer.
The dominant unspoken narrative in the financial markets is that the Fed will overplay its hand and cause a hard recession, at which point they’ll reverse their rate hikes. And when that happens, all the money sitting on the sidelines will reenter the market, leading to sustained inflation. No one really thinks that this beast can be tamed so easily.
Facebook is about the only company attempting to do this at the size of the big tech companies with Oculus. I think because it’s viewed as an existential threat that they otherwise don’t have their own platform so temporary headwinds / market punishing them for investing so heavily is less a concern for the board and Mark. Ford had to outsource this with Cruise and it’s a delicate balance even then. Apple is interesting to watch because they make very few moves in public that it’s hard to see what’s going on even from the inside in terms of innovation. Toyota is an example of taking a bad “market risk” investing into hydrogen although I think that’s an example of either saving face until they fix their EV story, truly making a misstep, or the story being misreported (eg hydrogen for fleet vehicles and trucks but EV for individuals).
I disagree. Search was the original product, and since then, Google has launched the following other products/technologies that I would also describe as revolutionary: Gmail, Maps, Android, Chrome, Ads/AdSense, YouTube (depending on who you give credit to), MapReduce, Kubernetes, TPUs, TensorFlow, and I'm sure I'm missing some.
The trajectory of these revolutionary launches over time does seem to be decelerating though even as the company gets larger. And with these layoffs it'll likely get even worse, not better.
At the moment it's also the most reliable source of information for what happens across Google's PAs (Product Areas).
Why do you think you know what is in Google's best long-term interest? Do you think you could run the company?
Also if your strategy is to hire as many engineers as you can possibly afford so that you can keep up with or beat the competition, then if the competition starts downsizing it means you can do the same, and maybe you see an economic contraction as a bigger risk.
Conjecture of course, but plausible I think.
If you had a healthy business and do a mass layoff, you don't have a healthy business anymore.
Granted, getting into that situation was probably "executives making stupid mistakes" -- seems like it usually is -- and granted, they're probably not saying "we have to do these layoffs because I was an idiot last year", and they're probably not taking commensurate pay cuts. But still. It can certainly and obviously be good for the company's health to have fewer people on its payroll.
Well, the evidence is that mass layoffs aren't having the result of being very positive for companies that engage in them.
Given that what you say also feels true, in my experience, an explanation immediately suggests itself:
Big companies rarely if ever manage to mass lay off only unproductive staff, or net-drain internal orgs. Rather, they're almost always implemented as an across-board X% haircut for most departments with little targeting whatsoever. So in the end, they don't solve the problem you're identifying, and that's why the evidence says they end up doing nothing positive for the company.
It’s tough. Look at Amazon. They cull the bottom 5% every year. It has a negative affect on morale because everyone is continuously on edge and having a bad month or two can be dangerous. Look at a layoff, it craters morale and reduces productivity.
The best bet seems to be to grow slow, hire and retain the best, and fire the low performers only as needed.
After that, look at corporate giants like IBM. They are laying off, yes, but historically they just lurched along, providing a paycheck to everyone.
Something like each team is maintaining themselves at a proper rate, laying off inside the team as necessary. But even then you will at times have to fire entire teams, but those aren't really a "mass layoff" so much as "we're not doing X anymore".
And I'd also suggest that very few, if at all, employees has zero contribution. It's just that some of those contributions are invisible to you.
It may be unpopular to say this, but of course it does. Just hire more people if you need to and hope that you're making the right decision. Yes, it has a terrible effect on employee morale, but that's a tough thing to quantify so it won't show up on the balance sheet.
It's too soon to know if the impact of layoffs on most of the companies doing them is positive or not. twitter is an anomaly: that was driven by basic stupidity!
When the $BIGCO I worked for was acquired, instructions were to cut 8% headcount across the board. We were explicitly told that they expected that some valuable people would be cut accidentally, but that's unfortunate. No one should be unreplaceable and if they really are, this is a way to find out and change processes so it can't happen again.
All humans are not just FutureRedundantWetwareMeatsacks that the all knowing bean counters can move around on a board. In reality business is about relationship/small detail institutional knowledge silo'd in individuals/humans proactively getting done what needs doing, many details that get poorly caught by tribal documentation systems.
If your people are truly cogs you don't have a business, you have a franchise, and anyone else can do the cookie cutter things your business is doing, and most likely better/cheaper/flashier. But for some reason HK and all these companies doing layoffs either don't understand that, or they WANT to turn their company into a generic franchise where everyone is interchangeable and lose the flexibility/capability/competency that being a business of interconnected humans gives.
There were a couple of dubious episodes, though, where a bad manager tried to do something to people they didn't like. Sometimes it worked (aka, negatively affected people) and sometimes the manager got in trouble instead. So it's not like all good. But it was heavily dependent on the managers you ended up under.
I'm unfamiliar with this term and a quick search didn't produce any meaningful results.
What is it?
And to be clear. I’m not talking about technical infrastructure pieces (eg k8s was kept in house for forever as Borg and then an open source version was built when it was clear they could sell it). Google has a lot of good pieces there and whether or not you can scale is mostly (but not fully) question of being right. When it’s a question of being right on a binary question, these soft politics phenomena disappear because reality is immune to that.
However.
Search: yes. Their first product alongside ads. Today it still represents something like 80% of ALL Alphabet revenue (and probably a much larger share of the profit provided). Anyway, bad example because search and ads were developed when the company was a startup. By necessity that’s your high risk bet.
Gmail: yes. Still early enough in the company’s DNA to take a bold bet. They’ve totally failed that space though by failing to invest and take gambles. Back in the day this also captured almost all IM traffic because EVERYONE had gmail. Now you might get a fresh can of paint every once in a while but there’s nothing bold. The reason? You have billions of users: if you make any meaningful change you’ll lose the ones that aren’t early adopters, especially if a change in direction has instability or feature loss (see Inbox). See their total incoherence on what to do about messaging, a problem they wouldn’t even have if they continued to take risks and innovate a decade prior.
Orkut: they could have had a social network. Gave up on it before truly figuring out how to make it work. Then G+ as an emergency Hail Mary that went nowhere for many reasons, not least of which is that bold risks need to still start small and grow and they went immediately for the billion+ market (notice the copy of GMails rollout strategy that was a poor imitation and failed to realize why that worked - cache and buzz driving “must have this” demand instead of a product copy that was meh and invitations that were more just how far away you were from the elite).
Speaking of social. Google Wave. See: Slack eating their lunch here. Heck, even FB workplace is miles ahead of Google Chat which still can’t figure out scrolling, scheduling posts and reminders, and requesting messages to be silent.
Maps: yes, fantastic. They’ve failed to keep innovating and taking bets here though. Notice the acquisition of Waze. In the long run, expect Maps to falter. The only saving grace is that Maps is important to their ad strategy so as long as users and revenue are aligned they won’t let it get too bad.
Android: first, acquisition. 2. Bold bet that had leadership buy-in for same reason as Oculus at FB - you have to own the platform if you’re an advertising company as otherwise the owner of the platform has you by the balls. See Chrome.
Chrome: yup. Fantastic innovative bold product at launch. Since then, mediocre incremental value with no new bold risk-taking ideas (unless you count pissing off loyal users and enthusiasts).
Ads/Adsense: see above. Too early in the company’s life + it’s 80% of their revenue. They don’t take any bold bets with this cash cow.
YouTube: acquisition. See above - failure to capitalize on social graph, failure to take meaningful innovation risks instead of slowly and methodically growing the business.
MapReduce: neat technical idea that actually preexisted Google’s idea. Google has largely abandoned it anyway afaik as other techniques work better / have better modern tools.
Spanner: this one has some staying power and is innovative but it feels like they continue to fail to innovate here.
TPUs: not bold or revolutionary. Take existing embarrassingly parallel problem you’re running on GPUs and build an ASIC. They’ve done excellent innovation and technical work here. Don’t get me wrong. But it’s not been a huge risky bet leading the market (and they don’t even sell TPUs as standalone units you can buy which would be truly a risky bet to eat their own cloud offering).
So in essence, they’ve always been slowing down for a long time and most of the things you listed as big risky bets just aren’t that. Certainly none of the technical stuff - that’s driven by in-house demand / obvious market demand. I’m talking about changing the rules of the market. If you own the market you’re not going to change the rules because you might not end up on top. See Clayton Christensen. I do think we should limit the ability for a market leader to enter new spaces though and how much they can charge. Once you’re big your ability to manipulate the markets creates meaningful market inefficiencies. The common belief is that these get sorted out over time but I’m not so sure / I’m not sure that regulations can’t help shorten how long market inefficiencies promulgate.
I'm talking about the next category of innovation down, whatever you want to call it if you feel "revolutionary" needs to be reserved for generation-defining technologies. Because with your current definition, the vast majority of even large tech companies will never have a product that meets it.
1. There’s ML research that clearly shows that you can convert video streams into neural nets that only need to transmit a very small amount of bandwidth for a high quality construction on the remote. Why didn’t this research come out of Google which has gobs of people working on the space? Why hasn’t the Meet team figured out how to get this into customers hands? Certainly the hardware for it exists and it would drastically change what a video call experience looks like.
2. They abandoned Google glass (correctly - that was a terrible product) and their VR in favor of sitting back and watching what others accomplish to then copy cat what a successful product would look like. Why didn’t they wait for in-lens displays while continuing to invest in the R&D of the product itself?
3. Android is a know memory hog. Android phones require 2x the amount of RAM as an iPhone for the same performance. Why hasn’t Google figured out how to bridge this gap? This is also a big reason why they’re watches struggle.
4. I was advocating to an SVP that Google should release a wearable digital watch/fitness band that’s a very basic experience focused on actual value add instead of a smartwatch: an SE so that Google Pay works without needing internet connectivity, mDL integrated, BT phone calls for the cellular enabled version, basic fitness sensors. It was shot down because he didn’t think it could make his P&Ls only for the SVP to later publicly call out the Android SVP for “why did Apple get to mDL first” ignoring that I was the first Bay Area engineer on the ISO committee.
5. Google took a long time to materialize their in-house CPU and it’s largely been underwhelming I think compared to what Apple’s been doing. Of course they started not too long ago (very late) and are copying Apple’s playbook so not sure how innovative. But for a company that’s been making their own HW since forever…it took them a long time just to make the decision to copy. There’s a lot of cool buzzwords but hard to compare value. Disruptive play: compete with Qualcomm here.
6. Fiber: gave up instead of figuring out how to outcompete telco business practices only to resurrect it again.
7. Stadia: instead of going with a disruptive Netflix-like business model and eating the upfront costs to publishers, they tried and failed. There’s a theme here that Rick is not cut up for anything more innovative than managing mature P&L products.
Then there’s all the dead end projects that they refuse to can because they are unlikely to deliver on the vision. Most of their efforts around “health” are vanity efforts that don’t require the amount of man hours being invested (certainly not rolled up under the commercial health app product line). Or at least this was the case many years ago - not sure about now. They talked a huge game about all the things they were going to enable and have a proven track record of not being able to deliver on any of them. X is neat pie in the sky ideas that never materialize. Moonshot ideas actually require you to get to the moon once. Don’t think any of that has ever come out of X.
Deep mind is probably the best innovative jewel in Google’s arsenal. Most of their magic comes from keeping Google disease at arm’s length. It might be interesting to see a Google with Demis Hassabis at the helm and a mandate to bring back some innovation to Google.