
Buffer Layoffs - aarondf
https://open.buffer.com/layoffs-and-moving-forward/
======
compiler-guy
This may be a little cynical but:

"With our culture of bringing our whole selves to work and seeing team as
family, with shared values we live by,..."

In the American business world, you are an employee until you aren't.
Confusing being an employee with being "family" is a mistake, both for the
company and the employee.

When times get bad, companies do what it takes to survive, including throwing
employees overboard. That's just a fact.

Buffer may have thought it was different, but that flow-chart of how they
decided who to layoff was entirely about how an employee can help the company,
not how the layoff would affect the employee. That's not how normal families
make decisions.

I have no problem with any of that, but anyone who thinks that way has another
thing coming.

All of this isn't to say that Buffer was thoughtless or callous in how they
handled it. From the outside, it looks like one of the better handled layoffs
I've seen.

But still. Don't confuse your job with your family. It's a business
relationship that is only maintained as long as it is in both side's interest
to do so.

~~~
jes
I'd say no relationships, including family relationships, should be maintained
if they aren't in the long-term self-interest of all parties.

In other words, every relationship is a trading relationship, and the currency
of the realm isn't always, or even often, monetary in nature.

~~~
prebrov
I really appreciate your further comments. I agree for most part that humans
and other living things ultimately act out of self-interest.

However, there are circumstances when rationale breaks, like when member of
your family develops a terminal decease. A purely rational decision would be
to cut emotional and financial losses and abandon them, wouldn't it? Yet,
luckily, we don't see that happen.

The length to which we go to keep family relationships is irrational, yet I
suspect it's a huge component of how we managed to ensure reliance of a system
and develop huge societies.

~~~
jes
I'm glad you're enjoying this discussion. I'm enjoying it as well.

My view is a little different.

I don't think abandoning someone who has been a great value to me because they
have developed a terminal disease would be consistent with acting in my self-
interest. To do such a thing would be to betray the virtues that I hold dear,
such as honesty, integrity, justice, pride, etc.

For example, consider honesty. If this person was a great value to me, we
would have some kind of understanding that we don't just toss each other
overboard in tough times. If they get sick and I do toss them overboard, I
would be a liar, and that brings a ton of other negatives with it, such as
undercutting my personal integrity.

There's also the issue of justice. If this person has treated me well, if we
have fallen in love, would it be just to abandon them when they are in the
fight of their life? That sounds like injustice to me, unless there was some
kind of (weird) agreement covering this situation.

This reply is getting a bit long, so I'll stop here.

If I haven't explained this very well, please say so and I'll try to be
clearer.

~~~
ajb
The thing is, once you find that the logic of how you decide what to do
includes good actions being conditional on being virtuous, it becomes clear
that the part about self interest is not essential, and your logic would be
clearer if you refactored it to remove that.

------
hkmurakami
_> In short, this was all caused by the fact that we grew the team too big,
too fast. We thought we were being mindful about balancing the pace of our
hiring with our revenue growth. We weren’t.

>Reflecting on it now, I see a lot of ego and pride reflected in that team
size number.

> In many areas, we grew the team more than was truly necessary for the time,
> more than was clearly validated._

I feel like we all experience this pull by vanity metrics, ego, etc. The level
of honestly we've seen in this post will hopefully serve as a reality check
for many of us.

 _> Both Leo and I have taken a salary cut of 40% until at least the end of
the year. Savings: $94,000.

>Leo and I are committing $100k each in the form of a loan at the lowest
possible interest rate, with repayment only when Buffer reaches a healthy
financial position. Savings: $200,000._

This is an attitude and decision I saw made by the C-level during the
financial crisis at a company with hundreds of employees. The C level took
home $0 in pay and the staff took at 40% until they made it back to
profitability, in order to avoid laying anyone off (this is Japan where
reemployment would be incredibly difficult).

It shows maturity and commitment to the organization (i.e. your people) that
is rarely seen these days in startup land. Much respect.

~~~
vegabook
Was just going to post at a higher level, but your comment nails it. These
guys are feeling the pain. It's clear. There is honesty going on here - I feel
a lack of cynicism from the post, real soul searching, and for that, I can
mitigate the otherwise knee-jerk negativity to the managers that I usually
feel on layoff justification posts. Reality is hitting people. The market is
slowing. Tough choices. No forgiveness for not having seen it, and for hurting
the laid off people, but at least I see a genuine search for reasons and
genuine empathy. Good post, under the circumstances.

Here's hoping that the wisdom on display will serve this company well.

------
sulam
Two things jumped out at me.

1) They planned to spend 1/3 of their remaining cash on flying people around
the world to meet f2f. Whoah! They need a CFO with some real power, because
that is absurd.

2) Speaking of needing a CFO, one of the first things a CFO will probably
point out to them is that their cash target is off by 100%. They're targeting
hitting 50% of today's ARR sometime next year, yet they plan to grow ARR in
12-18 months by double. If they truly want 50% ARR on hand, they need to
target $10M, not $4-5M.

I also have some questions about the graph -- I'm sure it's well-meaning but
it looks fishy. The slope of the curve is noticeably better in the go-forward
plan vs the status-quo plan, but there's no logic to support that in the post.
I imagine there's a breakdown that makes this make sense, but it's not at all
obvious, and the naive conclusion is that these people who were fired were
actually slowing down sales somehow. Secondly, every time I see a graph where
the next month is negative and then ... magic... and the slope goes positive,
my spidey sense tingles pretty damn hard. That said, there are some obvious
reasons this might happen, including the cost of the layoff being recognized
next month, so that's less of an obvious red flag.

~~~
tomaskafka
AFAIK the graph shows difference between monthly revenue and expenditure.
Reduce the costs, and it will turn up (if the revenue stays).

------
danso
FWIW, here's their public spreadsheet of salaries and calculations. Not sure
if it's been recently updated (on closer look, seems to reflect the founders'
stated pay cuts, and new hires as recent as last month):

[https://docs.google.com/spreadsheets/d/1l3bXAv8JE5RB9siMq36-...](https://docs.google.com/spreadsheets/d/1l3bXAv8JE5RB9siMq36-Ogngks2MT6yQ5gt8YXhUyAg/edit#gid=1533208969)

edit: Adding links to their blog posts:

[https://open.buffer.com/transparent-
salaries/](https://open.buffer.com/transparent-salaries/)

[https://open.buffer.com/introducing-open-salaries-at-
buffer-...](https://open.buffer.com/introducing-open-salaries-at-buffer-
including-our-transparent-formula-and-all-individual-salaries/)

~~~
dsacco
I admire Buffer for being so transparent with their salaries, but I don't
think I would ever decide to work for a company that mandated it.

In my (admittedly limited) experience, mandating salary transparency tends to
increase the salaries of low performers and reduce the salaries of high
performers. It usually eliminates the potential for negotiating raises and
poses difficult questions about paying some employees more than others in the
same band.

Case in point: according to Buffer's salary calculator[1], a "master" (their
highest rank) backend developer living in San Francisco and optimizing for
salary over equity would earn about $155,000/year. I can't think of any
definition of "master" developer that could be competitive for. Friends of
mine at AmaGooBookSoft and even other startups have earned nearly double that
for being merely "senior" (L5).

[1]:
[https://buffer.com/salary?r=1&l=10&e=3&q=1](https://buffer.com/salary?r=1&l=10&e=3&q=1)

~~~
nilkn
The $155k salary might be due to the transparency, but could it also be due to
a simple inability to pay developers $300k+? That's well over double the CEO's
salary. I think it's clear they simply don't have the revenue and cash
reserves to pay developers that kind of money. I suspect you'll find this to
be true at a lot of smaller startups that rely on actually making money
instead of fundraising.

~~~
bambax
Also, Buffer is entirely remote. I bet many people are willing to take a big
pay cut if they don't have to commute to an office building every day (and of
course, other people like office life -- but remote positions are rare, so
it's normal that they're more "expensive" for employees who really want them).

~~~
s_kilk
Also, if you're working remotely from a more affordable location you may not
need as much salary in order to live a very comfortable life.

I think our expectations are skewed by the crippling cost of living in SF, New
York, London, etc.

~~~
RussianCow
Buffer actually adjusts the salary based on location, so this is (at least
partially) taken into account.

------
rwhitman
As much as I want to dive into armchair management here, I greatly respect the
fact that the buffer folks remained committed to the total open transparency
thing, even when it didn't paint the business in a positive light. That takes
a lot of balls

In a world where business failures are rarely documented, people ought to
celebrate the fact that these guys are giving the world a recorded history of
the lifecycle of their company, their thoughts when making business decisions
etc. There is immense value to be gained for anyone in this industry

------
ctvo
>> We canceled our upcoming team retreat to Berlin. Savings: $400,000.

Compared to all their other costs that one stood out the most. 500k savings
laying off 10% of your workforce compared to 400k for a team retreat in
Berlin.

Is this typical?

~~~
ndiscussion
That does seem astronomical. $4,000 per employee if they have ~100 employees
like they say.

Anyone think their salaries are absurdly high for some locations and
positions?

They've got Adnan working as an "Advanced Backend/Frontend Developer" in Sri
Lanka, making only $65,104. This actually makes sense to me because Sri
Lanka's cost of living is pretty low.

But they've got an Advanced "Happiness Hero" which I presume is an email
support role making $77,397 in Kentucky. Last time I checked, $77,000 is an
extraordinarily high salary in KY, especially for someone doing email support.

~~~
hammock
$4,000 would barely cover business-class airfare between SF<->Berlin for one
employee. Not to mention accommodations, event space, meals and entertainment.

~~~
jpna66dd
Are you saying it is customary to fly people business class in the Valley,
rather than coach? Especially for a team retreat?

~~~
hammock
I cannot speak for Valley customs. But all of the (non-Valley) companies I'm
familiar with extend business class to employees for international travel as a
matter of policy.

~~~
jly
I must work at the wrong places (non-Valley). Maybe that used to be common,
but in recent years I don't see that for regular employees at all. Maybe for
some layers of management.

------
minimaxir
While Buffer's transparency is incredible, the financial calculations in the
article fail to account for the possibility of an _employee exodus_ domino
effect, especially after both knowing the financial state of the company, and
relevant perks being cut.

~~~
hguant
I would actually think the opposite: if you're a buffer employee right now,
you know a) the company will continue to exist b) that you're a valuable asset
to the company and c) that your founders walk the walk when it comes to
transparency and information sharing.

I'd assume a few people will leave for better offers in the next few weeks,
but this seems to prove that the founders are dedicated to the company and can
learn from mistakes - hardly the prompt for a mass exodus.

~~~
bovermyer
Not only that, but the founders themselves took a 40% pay cut each for the
next year. That says to me that they value their employees enough that they
chose that route rather than lay off an additional person. It's a strong
gesture.

~~~
abglassman
And the founders each loaned the company $100k out of their own pockets at
"the lowest possible interest rate."

There's a lot of laudable humility and self-accountability in this post and
the actions they've taken.

~~~
qmr
I read that as weasel word bullshit. The lowest possible rate would be 0.

------
hobo_mark
I certainly appreciate their openness, and like to follow their progress,
but...

...could anyone explain to this naive commenter how it takes 90 (80 for that
matter) people to run essentially a 'cronjob as a service' business?

~~~
Arcsech
Let's do some simple estimation! I haven't really looked at their spreadsheet,
so this is just guesswork.

The product is fairly simple technologically yes, but the value is provided by
making it easy to use so the customer saves time (= money). To do that you
need a few UX people plus some developers (especially with web and mobile
apps), call that 15 engineers/designers total, plus another 5 for ops. Now you
need a sales team since your real money will be in selling to enterprises -
call that 15 people. And on top of that you need customer support, and call
that another 20 people. Now that we're up to 55 people, we need another 10
people worth of HR and 5 bean counters, that takes us to 70. Now cap it off
with 10 managers/executives and we're up to 80, and I'm sure there's some
things I was off about or forgot.

It's easy to forget about all the non-engineering resources you need for a
medium-sized business.

~~~
arctor
>Now that we're up to 55 people, we need another 10 people worth of HR

1 HR person per 5.5 employees? This is insanely high. A company that size need
2-3, tops.

~~~
robbiemitchell
You need more in HR (or more accurately, HR/finance) if you have lots of
remote employees, especially international. That's a ton of extra
administration to deal with.

------
eropple
_> Reflecting on it now, I see a lot of ego and pride reflected in that team
size number._

This is one of the worse diseases I see in the tech world. I have friends who,
when asked how their company is doing, respond with something like "great! We
just hired a dozen more engineers."

I'm pretty sure a better answer is "great! We just got X customers," or
"great! We're profitable now!". Not how big your fief is. (But, mentioning
fiefs, I'm struck by the notion that a startup is just a business unit of a
loosely-organized corporation and CxOs thereof just middle managers for an
investor-class executive group.)

------
k-mcgrady
I'm curious as to why they had 94 employees. That seems like an insanely high
number for a company that does something pretty basic (not dumping on the
product, I like it and have used it in the past). What are all of those people
doing?

~~~
BenoitEssiambre
As part of a company of less than 30 in a rural region, I get that feeling a
lot. I'm sure I'm wrong but what do 57000 google employees do!? Am I really
hitting an immense mechanical turk when I use google? Yet they can't spare a
single person to spend a few weeks to convert the flash off of google finance?

~~~
jpm_sd
Kind of, yes! You would not believe how much manual labor goes into
maintaining and load balancing data centers and keeping deceptively simple-
looking services up and running... There has been some recent press on the
work done by legions of SREs that gets into a few of the details.

~~~
BenoitEssiambre
I dunno we are 3 software devs, 2 network admins (also playing the role of top
tier level, on call support) and run our own bare metal servers in two
geographically separated collocation data centers. We also have 2 device
hardware/firmware guys and the CEO also does a bit of coding sometimes.

Our solutions are sometimes a bit clunky but our infrastructure is audited
yearly by an outside firm and certified to carry banking data through the
wireless device we designed and through our network. There is another 15-20
people doing financials, payroll, hr, tech support, sales, marketing,
assembly, hardware testing, shipping etc..

We maintain multiple backend interfaces to a bunch of (sometimes old and
archaic) bank networks and to our wireless devices as well as multiple front
end portals for our users.

It's hard to imagine ever being able to make use of 57000 bodies, but I
suppose that's a totally different context. We could use a few more.

------
AndrewKemendo
They laid of 10 people, 11% of their workforce - which means they had ~90
employees.

Crunchbase tells me they have had almost 4M in investment since 2011 and
Baremetrics puts them at 45M in lifetime revenues. So, call it a round $50M in
capital.

50M/90 employees all in is around $135k/employee each year for the last two
years. Subtract all the perks and those numbers get hard fast.

Just goes to show that, even with a lot of cash, a lot of people cost a lot.
It ends up doing a disservice to each existing employee, with each new person
your company brings on, if you can't scale revenue with the pace of hiring.

------
joosters
_" We had just come out of a long experiment with self-management, where we
fully leaned in to ..."_

What on earth does 'fully leaned in' mean? It's not the greatest of metaphors,
I pictured someone falling on their face.

~~~
mildbow
Love this comment. Because that's what happened. Maybe it's a cautionary tale
supported by another meme -- never go full retard.

But they got up and seem to be dusting themselves off. So kudos for showing
transparency when they mess up (which is when commitment to transparency
actually means something).

------
ryanmarsh
Company lays off 10,000 people: "restructuring"

This guy lays off 10: heart felt apologies and deep moment of reflection

Criticize away HN, while he still has his humanity.

------
pbreit
I have mixed emotions with Buffer's shtick. On the one hand there's something
fresh and unique about it. On the other, I think: just put your heads down and
get to work serving customers!

I'm guessing the main benefit of the open-ness is marketing. I doubt it helps
the company much beyond that.

~~~
spitfire
Well, except for hiring. When they get to that again.

Sometimes just vocalizing things came lead to new insight. I like their
approach, minus the salary transparancy.

~~~
imron
> When they get to that again.

Looks like they're still hiring: [https://buffer.com/journey/full-stack-
developer](https://buffer.com/journey/full-stack-developer)

~~~
simonswords82
> Looks like they're still hiring: [https://buffer.com/journey/full-stack-
> developer](https://buffer.com/journey/full-stack-developer)

Yeah that's what I was going to say, there's a link to the we're hiring page
on the new salary formula spreadsheet:

[https://docs.google.com/spreadsheets/d/1l3bXAv8JE5RB9siMq36-...](https://docs.google.com/spreadsheets/d/1l3bXAv8JE5RB9siMq36-Ogngks2MT6yQ5gt8YXhUyAg/edit#gid=1533208969)

------
odbol_
What is with capitalism's obsession with constant growth? Buffer is a great
app, I use it every day, but how in the f*ck do they need 100 employees to
maintain it?

My company is writing an entire smartwatch OS, including companion apps for
iOS and Android, and we're less than 10 people. Buffer needs 100 people just
to write one multiplatform app? What is going on here?

------
byset
I guess I'm nitpicking, and the guy probably just needs an editor, but the
whole tone of this post seemed tiresomely self-congratulatory to me. "Look at
how frank and empathetic and open I am! Look at me ruthlessly dissect my own
mistakes! Isn't that refreshing?"

It also all seems a bit maudlin — being laid off is a terrible thing, but
mistakes happen and employees are aware of risks going in (although as others
have noted, this type of situation underscores how inappropriate the whole
"we're a big family" idea is). It would seem more respectful to the laid-off
employees not to go on and on in this manner.

------
selectron
Good for them for being transparent even when the company is struggling, but
if I was an employee at the company I would be worried. The chart they provide
of Buffer bank balance over time seems overly optimistic. It looks like they
assume that the employees they fire added no value to the company - they
assume the company will generate the same revenue even after cutting 10% of
their employees. This is wrong, and would worry me greatly that the founders
don't seem to recognize this. Of course I would be worried anyway because
laying people off at a start-up is a really bad sign, anyway you try to spin
it.

------
nickgrosvenor
Damn, only Buffer could exploit the firing of 10 percent of their staff with a
promotional post.

I don't know whether to be impressed or offended.

------
nodesocket
This is a bit surprising. Buffers revenue has been solidly growing (up 23% in
the last 6 months) with around 840K in MRR. I suppose having that many
employees adds up quickly though. It's hard letting people go... But
ultimately you have to do what is required to keep the company going.

Source of financials:
[http://i.imgur.com/i3W5KC7.png](http://i.imgur.com/i3W5KC7.png)

------
smuss77
I really like the transparency and accountability.

Two questions: Why are the two loans necessary? And, how does a loan get
counted as savings?

> Leo and I are committing $100k each in the form of a loan at the lowest
> possible interest rate, with repayment only when Buffer reaches a healthy
> financial position. Savings: $200,000.

~~~
beambot
It shows founder commitment -- a willingness to put their own personal savings
at risk to help the company survive.

It's "savings" in the penny-saved, penny-earned sense.

~~~
dhbanes
A penny saved is not a liability, it is an asset.

------
beat
This reminds me of Ben Horowitz' _The Hard Thing About Hard Things_ , where he
talked about implementing a plan to lay off 90% of his company in complete
secrecy, for fear of employee exodus and loss of customer confidence. But that
was a very different situation than Buffer is in now, as it happened during
the original dot-com era collapse.

Kudos to Buffer for their approach to transparency. I think it will actually
serve them well here.

------
pascalxus
It sounds like they handled this layoff both compassionately and
professionally, although the founders have a lot to learn about balancing
their spending.

But still, every company and employee needs to recognize that your coworkers
and company are not your family - this only leads to misplaced expectations.

One of things that makes America so competitive, is the concept of at will
employment - the company can fire or lay you off anytime and you can leave at
any time too. This is a reality we must accept for capitalism to work at
optimum efficiency. I realize this may seem heartless and cruel, but that's
why you need to have work/life balance. Ideally work should not account for
more than 10 to 20 hours of your life per week. Sadly, for most of us it's 40+
hours. It is outside of "work", where you can form relationships that mirror a
family like structure - in volunteer groups (unpaid), friendship circles,
hobby groups, book clubs, etc. More of our lives should be dedicated to such
organizations for us to remain better balanced.

~~~
jwebb99
> Ideally work should not account for more than 10 to 20 hours of your life
> per week.

Is this an opinion or is there some kind of rationale behind this? I don't
mean to sound antagonistic, I'm just genuinely asking a question.

~~~
pascalxus
It's just an opinion. 20 hours (25% of the discretionary week, discretionary
time is roughly 50% of 168 hours ~ 84 hours.) for me represents the maximum
amount of time that could be considered sufficiently diversified.

------
OoTheNigerian
I appreciate the forthrightness in this blogpost. Not only have they owned up
to mistakes, the thought process in dealing with it (whether you agree with it
or not or not) is well documented.

To be transparent is quite a difficult thing. You expose yourself to so much
scrutiny.

Godspeed Joel as you and your team bounce back from this slight setback. We
all fall. how we get up is what matters.

------
freestockoption
"We had just come out of a long experiment with self-management"

Why do startups do these huge management experiments? My company did the flat
thing too and they spent a few months trying to get people to understand it.
Probably burning up 5hr/wk for each person. Until they almost ran out of
money. By then people were really confused. I think it almost killed the
company due to the politics and red tape it created (strange, it was supposed
to eliminate it).

My opinion is that it's hard enough to run a startup, let alone trying to
invent a new management methodology. Best to go with what people already know.
It may not be perfect, but at least there's some prior experience with it.

Just like how most would advise using the programming language and platform
you know to build your initial product, rather than trying to to learn
something that you think might be better.

------
kumarski
They have some pretty tough competition now.

[https://www.socialchamp.io/](https://www.socialchamp.io/) for example is one
that is growing rapidly.

I can only imagine that it may become a commodotized space w/ little
differentiation.

------
AznHisoka
we always talk about 3rd party platform risk for startups and to me Buffer is
the prototypical example of one. If Twitter has a bad day they can cut off
their API access and they'd be dead (ok they support Facebook and others but
that's still 1/2 of your core)

So it seemed quite absurd they'd spend so much on things like retreats when
they have so much risk.

------
pc86
From a tweet cited in the article (not the author):

> _i think @dfjjosh 's rule of 50% of ARR to operate and invest without $$$
> stress is a really good one. use debt to hack it._

What's the point of taking on debt just to have more cash on hand? Is this a
startup-y "growth über alles" type of mentality or is it found in the larger
business world as well? I don't see how increasing your burn rate just to have
more cash in the bank is a good business decision, especially when you'll pay
a premium to have that cash in the form of interest or loan origination.

------
alexbrower
"Although I know rationally that the size of the team is not something to
celebrate, I feel that I slipped into that harmful mindset quite a bit over
the last year. Not everyone is familiar with growth metrics like monthly
recurring revenue, but team size is easy to understand. Sometimes it impressed
people when I told them how big the company was, and I was proud to share it."

Correct. Headcount is a figure that represents a company's means. If you're
tracking it as an end result, you end up having to make hard decisions or
someone makes them for you.

The transparency is commendable. A couple other observations:

\- Affected employees had an average salary of $58.5k (assuming your metrics
is net of benefits and payroll tax). If this is annualized, it appears you let
go of non-engineers. Set goals and performance expectations for those who
remain, especially those who build your product.

\- Stop publicly promising salary increases altogether. Promote people based
on their ability, not an artificial loyalty policy. Some people deserve 10%+
raises, some you'll find are overpaid. Use a basic job ladder and put the
burden on managers to justify comp changes.

\- If the policy of granting vacation bonuses was for recruiting purposes,
you've successfully attracted people who want to be paid not to work. Again,
implement a corporate bonus program and set goals for staff.

Best of luck.

~~~
slgeorge
\- Stop publicly promising salary increases altogether. Promote people based
on their ability, not an artificial loyalty policy. Some people deserve 10%+
raises, some you'll find are overpaid. Use a basic job ladder and put the
burden on managers to justify comp changes.

A guarantee of annual salary increases is problematic for three reasons:

a. An increase of 3-5% is going to increase salary costs rapidly as it
compounds. He mentions that salary is 80% of cost, so it means that costs are
going up for doing the _same thing_ by 3-5% every year. Employees aren't a
fixed unit of production (particularly in a tech firm) but there's not
unlimited new productivity either. It's fine if your prices are also growing
at those rates ... but I don't think many people are in those situations at
the moment.

b. It takes away the meritocracy Salaries have to keep up with inflation, but
beyond should be a mark of performance.

c. It's going to suck when they have to change it Things happen, this is an
example, and employee morale is a sensitive matter.

------
jmcgough
Appreciate the transparency, but they mention that they let people off on a
"last in, first out" basis, and their flowchart seems to suggest that if they
like an employee they'll move them to another role.

I don't blame them for doing housekeeping in that way - if you need to reduce
headcount, start with people who don't fit the culture and business needs -
but they shouldn't pretend that it's perfectly unbiased.

------
galistoca
People keep saying "admire the transparency", "appreciate the transparency",
but really what's the point? Who is the "transparency" for?

I really couldn't care less about my salary being made public to the world,
all I care about is working on something I believe in.

Extreme transparency has nothing to do with their business growth and it will
probably come back to haunt them later, I don't know why they're going so far
as to do all this.

Doing business is extremely hard on its own, why complicate matters and expose
private details to the public, which can and probably will at some point be
used against you? I mean even on this thread people nitpick and gossip about
every single details. And it would be a lie to say they care 0% about these
things. If they _do_ care, it just means less time worrying about their core
business.

------
jimbokun
On deciding to not raise funds from venture capitalists:

"This has some implications on the true growth rate we can expect, yet it has
significant benefits we feel in terms of the freedom we have to experiment not
only with innovation in products but also in the way we work."

I think this reflects an important, often over looked point. Many people want
to start a business because they prefer to not have a boss, and be able to
make their own decisions.

In many ways, raising capital from outsiders can just replace one boss with
another. Now you have to make your investors happy, even when it leads to
different decisions than what you might make otherwise.

~~~
nibs
I think the goal is to replace one boss (whether it is VCs, a customer, an
employer, etc.) with one hundred bosses (ie. tons of customers, powerless
investors, several different freelance employers) so you can tell whatever one
is causing you significant stress to FO. Redundancy and autonomy is, or should
be, the goal, as opposed to business size or power.

------
Fiahil
Are we seeing these event more frequently than before or is it just a matter
of perception?

Anyway, despite being a tough time for them; it's good to know they live in
reality and not in a "unicorn-themed-chase-party".

------
OliverJones
> Leo and I are committing $100k each in the form of a loan at the lowest
> possible interest rate, with repayment only when Buffer reaches a healthy
> financial position. Savings: $200,000.

Oops. This isn't savings. It's high-priority debt. Investors really want to
invest in the future of the company, not the past. If these guys want to serve
their company, they'll

(a) write this off their personal books, considering it an unrecoverable cost.

(b) convert it from debt to some kind of warrant giving them the right to
recover it from profits at some point in the future.

Who's advising these guys?

~~~
jea
People who know about tax law apparently.

~~~
robhunter
I was wondering about that - they already took out $1M each in the last
fundraising round at all - why draw a $200K+ salary and give half of it to
taxes when you've already got plenty in the bank?

------
WWKong
"... seeing team as family, with shared values..."

Should have tried pay cut across the board and see if folks jumped ship. A
good test to see if that culture held up.

(Just a thought. I know it is more nuanced)

------
chx
Why is this several hundred upvotes news? A startup grows from 30-something to
90-something it's too much it trims a little. That's entirely normal. What's
the big news?

~~~
mahyarm
It trimmed the most recent employees, who decided to take the job after
rejecting other job offers. Hiring 60 people in one year and then firing 10 of
them in less than a year isn't nice and it doesn't feel nice. It's definitely
a screw up in planning.

I understand why it can happen for sure, but still sucks.

~~~
disordinary
Yeah, also I get the FIFO idea of firing, but for some people who have given
up jobs recently. Or have come out of a startup which has failed and owed them
salary it can be really tough. Especially when it can take a couple of months
to find a new job if you're committed to the remote lifestyle. The share
amount of applications that companies who operate remotely get means that it
takes six weeks for them to even get to your CV, let alone go through the
coding challenges, multiple interviews, paid trial, etc.

~~~
mahyarm
FIFO layoffs suck extra hard for the new people.

------
Yabood
It boggles my mind why a company like buffer that has a relatively simple
product and a pretty straight forward transactional sales model would ever
need that many people.

------
ovrdrv3
What does buffer do as a company?

~~~
CPLX
Social media marketing automation

~~~
bbcbasic
Socially Positioned Automated Marketing?

------
adwf
Ouch. Never a pleasant thing to do.

I just hope they made the cut deep enough. A common mistake is to cut enough
to _just_ get back to break even, when what you really need in that situation
is to get back to a decent level of profitability. The number of times I've
seen a second round of layoffs because people got that wrong...

From the looks of their projections, they've done the right thing, back to
profitability and growth.

------
joeevans1000
Holy smokes... they put all new hires through a 45 day trial, then only keep 7
out of 10! I can't imagine getting the boot after a month and a half... by
then you'd have made emotional connections. I guess it would work for those
who are contractors thinking about getting a full time gig, but for those
leaving other positions... wow.

------
hathym
22% of their stuff are happiness heroes [0] !!! WTF !!!!!!

[0]
[https://docs.google.com/spreadsheets/d/1l3bXAv8JE5RB9siMq36-...](https://docs.google.com/spreadsheets/d/1l3bXAv8JE5RB9siMq36-Ogngks2MT6yQ5gt8YXhUyAg/edit#gid=1533208969)

~~~
detaro
WTF because of the name or WTF because of the number?

------
kra34
"when we had to tell 10 talented teammates that their journey with us was
over" \- Gavin Belson

------
mattfrommars
Interesting as just yesterday I was praising the company how successful it is
in this niche. It was posted on a thread yesterday which went like 'Successful
companies which YC rejected".

And here the layoffs. The upper management were banking 250,000 the last time
I read their details.

------
dmitrygr
"We made 10 layoffs in order to recover to a healthier financial position.
Savings: $585,000"

so these people cost the company $58,500 apiece (this is incl. their benefits,
insurance, etc). Meaning their salaries were, what? $40k?

wow?

~~~
alainv
If you read further, they clarify that's 585k through the end of the year. So
factor in a termination package for them and the 585k is less than half of
their yearly salary, so they were likely at or above 100k/yr each. Makes a bit
more sense.

------
cpg
Buffer overflow. Oops!

------
tdaltonc
Have they written about their experience with Holacracy?

------
OJFord
I realise it's a significant (11%) proportion of their (former) staff - but
"we've made 10 layoffs" sounds incredibly personal.

------
sinzone
Leadership has to stay under one roof. Team can be distributed but the
leadership not. Everyone in the mother tipi.

------
the_watcher
The comments so far all seem focused on the language Joel uses (family, etc).
While that may be fair, if you simply change those terms into whatever you
think is more accurate, this is a very, very good piece of insight into the
perils of growing too quickly, as well as an (as usual) extremely transparent
look into how a company that is reasonably successful adapts.

------
rigotovar
I'm sorry if I haven't read all the comments, but this post basically tells me
that the company should remove both founders and have a real CEO to do the
right decisions from the beginning of the growing, 34 to 94 it's 3 times the
size and having retreats and perks like those mentioned are not worth it
specially for such a small/young companies

~~~
newscracker
They're doing something very different from the run-of-the-mill kind of
startup, funding, salary management and various other things.

I'm sure thousands of people have been thrilled with Buffer growing and
thriving and see it as a breath of fresh air in a climate filled with bean
counter CEOs who think anything and everything boils down to a number that can
be turned like a set of knobs to change outcomes (and of course, most of them
fail and jump to another job with a nice golden parachute). I personally think
the executive compensation disparities that traditional CEOs bring in and how
they deal with things are very damaging to all the humans who work with them.
As a society, it doesn't forebode well at all to continue with the traditional
model.

Regardless of how Buffer ends up faring in the next year or so, it will always
be remembered for being different and doing things differently than most other
companies. I feel bad for all the Buffer employees that they had to face this
- letting go of a significant percentage of the workforce in a small company
(or even a small division in a large company) can be really upsetting for
everyone involved. The best that they can do, which they seem to be doing, is
making sure that these people who're laid off get a decent enough job
elsewhere. One can't really hope for that in many other companies.

------
markbao
For a revenue-generating business like this, is 90 employees with $10M ARR
normal?

Admire the transparency.

------
reality_czech
In Silicon Valley, Buffer overflows you!

------
zump
What does this company even do?!

------
alphacome
Layoff is : to get rid of someone as soon as he has finished his work

------
GBond
OT: I stopped using Buffer since they've imposed limits on the free accounts.
Any suggestions for alternatives?

~~~
bdcravens
Is this for a non-profit or a personal project? Or social marketing for
something that can make money?

