I'm curious why do these company just don't freeze hiring instead of such huge cuts that have been shown to be expensive and morale killing?
You start firing people, people start refreshing their CV instead. Cooperation at work dies, toxic competition takes its place. It becomes more important to look better than your peers than getting stuff done as a team.
Kills morale, kills productivity, bad for the future. Instead by simply freezing hiring you could "remove" a similar amount of workers in 18/24 months just by the natural turnover that most tech has without the correlated drama.
Silicon Valley has been hiding a dirty secret for years: Many companies, if not the majority of them, are badly mismanaged.
This is really going to be the start of the next big shift in who will be the leaders in tech. Many companies that are seen as leaders today will eventually join the group of companies that are no longer seen as leaders.
It was easy to look good when the money printer was churning out negative rates and you could rely on investors to pump money in you instead of actually turning a profit. A couple of years ago you could literary close your eyes, put your finger randomly on some no-name company and if you invested in that company you'd get great returns because everything was going to the moon.
Now we're gonna see which companies are actually sustainable and which were coasting on dreams and cheap money.
IMHO such a correction was long overdue, but the central banks kept negative rates for far too long while everyone cheered them one because they saw their crypto, stonks and housing portfolios go to the moon and though this was great and nothing bad could happen because "line always goes up".
That’s probably true. But I’m not sure that fact has been reflected in stock prices. During the last hype cycle I would say that, in general, tech has been hyped a lot more than other industries.
This is why I have always laughed at people suggesting that private enterprise can do things more efficiently than big government. Have you worked for what passes as private enterprise these days? There is zero forcing function in the corporate space anymore. Everything is owned by the same like 100 people, and there is no competition, so even if it worked in theory, it should be clear and obvious it hasn't "worked" in the US for decades.
1. Many of these companies had year+ long hiring freezes as a prelude to layoffs
2. Companies that overuse hiring freezes end up promoting over hiring in periods where there is open hiring as teams hire in anticipation of not being able to in the future when they might need to
Also 3
If you have a need for hiring, it is likely for a higher priority project in need of a skill / domain you don't have free resources for internally.
Simply having a hiring freeze means you hamstring high priority projects you'd have allocated resources for, while letting others that may lower priority ride due to inertia.
and 4, when things are going well companies in general avoid firing anyone who isn't like harassaing people or something like that. Because it gives a bad outlook and the ones who can start to look for something else
Now they just use the old "never let a crisis go to waste" to let those who isn't good enough or overpaid go anyway
Taking an extreme, stupid, recent example - Let's say the ad market has slowed down and you really don't need so many ad salesmen. And you decide to switch gears to a subscription model so you need to do some work in payments. But you have a hiring freeze.
Do you think the ad sales guys can help with the Square integration?
Or let's say you've decided to bet your social graph / web / mobile app centric company on VR. How many of those existing devs are going to be useful in VR if you have a hiring freeze? Or when you realize it's a debacle and scale down VR, how many VR devs are going to be good iOS app update churners? Etc.
Some companies can't for cultural reasons. Sometimes, it's really just that you got your strategy wrong and now you have a bunch of domain/technical experts who specialise in stuff that's altogether useless for your new direction.
heh, indeed... I'm a contractor and I got shuffled around into a team that's not really picking the steam it was expected to. Talked to the previous EM -- whose teams are under significant load -- and yeah, what a pity: budgets are locked so shrugs.
You say that, but plenty of job adverts are for fullstack developers, e.g. backend experience in C# with dapper or EF, and frontend in Angular or React. It's not an absurd transition for an experienced developer, even if there is a learning curve.
As someone who works with database engineers, there's also a world of difference between the ones that know what they are doing and the ones that don't.
I was internally retasked from python to java full stack development. I have a bachelors in computer science, it's expected that I can just pick up, with a little time, any tool that fits the task. 95% of software development is just connecting pipes together. We are glorified digital plumbers for the most part, with only a few people working as the equivalent of civil engineers actually doing important design work.
If you chose to save a few bucks by hiring limited devs, that's a choice you made. In our orgs, the guy who moves CSS boxes for a living absolutely can write some SQL queries. Most places don't write database code, they write code that uses an ORM or other framework to interact with existing databases.
Of everyone I’ve managed (surely 50+ managers by now), I can only think of one who was heavily biased towards under-hiring. Most were biased towards over-hiring (some strongly so) and that’s the makeup of most companies’ middle management ranks. Many identified (often correctly) that the more people they had in their org, the more important they were. (Some leveling guidelines even make this explicit.) Add periodic freezes to the mix and this gets amplified during the “open season” times.
Every place I’ve worked I’ve heard things like “you better hire someone for that req before it goes away”, “if you think you need 4, ask for 6”, “make sure you don’t lose that backfill”, "never leave unused budget", etc.
Companies I have worked for where there has been implicit (and sometimes even explicit) overestimation of staffing needs when requesting extra people to counter the fact that the entire hiring round will not complete before the inevitable next hiring freeze.
I'm not talking the large scale stuff like Meta assuming the metaverse was a trend that would require their company to grow 50%, but the medium scale stuff like a department in a 1000 person company putting in to hire 12 people instead of 8, etc.
HashiCorp is a public company and their quarterly report yesterday was a major disappointment to investors.
Layoffs are a signal to the stock market that management is taking the problems seriously and cleaning house.
Look at Meta’s stock price. It crashed in 2022 right up to the first layoffs in November. That’s when Zuckerberg declared efficiency is a primary concern. The stock has nearly tripled from November.
I mean, passing around leeches and bleeding everybody, while performing occult rituals would also be a sign they’re taking the problems seriously. That is separate entirely from whether it’s irrational self sabotage or not
Funny you'd make that example, as that'd make pavlovs point even stronger imo.
Hashicorp is a publicly traded company, so their decisions need to primarily please their shareholders.
You’d be well served to do exactly as suggested if you’re currently a healthcare provider in an occultist village. You’d be gambling with your life otherwise.
Spot on. Layoffs barely save a dime in software behemoth like Google. Barring few startups that overhired in pandemic, it all boils down to this management tokenism.
If everyone is hiring and you don't, your shareholders will think you're not doing a good job. If everyone is laying people off and you do, shareholders will think you're making tough choices.
I really think that there isn't a rational reason for doing so, it's just CYA all the way up.
IMO apple has been the notable exception Cook is easily the top CEO of the valley. Its honestly impressive how well Cook was able to keep the company moving after jobs stepped down.
Their approach has definitely changed my mental image of the company, and I'm happy that a successful tech company is following such a strategy. My worst fear is a wave of cargo-culting MBAs pointing towards Musks approach to Twitter and copying it for the whole sector. Apple currently is the shining example against that.
Yeah, MBAs and private equity really ruin a lot of otherwise good companies. I honestly wonder how long they can keep this going in a high interest rate environment.
It’s just doing business within your current budget. Everybody knows projections and hence budget will change but rules are such that until they don’t you’d better lock in what you can.
You basically rephrased what I said - because "doing business within your current budget" doesn't mean you're making the right decision. If you temporarily overhire and then have to lay people off, you'll be in a worse spot than if you hadn't overhired in the first place. Good management wouldn't do this, but it's safer, because you will be judged less harshly for doing what everyone does ("doing business within your current budget").
You're doing the right decision for you in your org even if from the wider company perspective it's obviously wrong and everybody knows this, starting from the CEO, going via middle management and individual contributors, ending at shareholders. It's simply accepted that the rules of the game are such.
You can change the rules, but probably not if you're publicly traded... unless you're Apple.
In many cases it’s “non tech in tech” being fired. They are still recruiting engineers, they probably won’t recruit more non tech this year
When the Twitter drama started yesterday I searched LinkedIn for posts from hashicorp employees announcing they have been cut. In the first hours it was recruiters, project managers, and customer success people
My guess is they will also freeze hiring more recruiters
Another point is there used to be natural attrition in tech, during the great resignation it was even higher than normal. You plan ahead assuming some people will leave, and when things get bad and no one leaves, you’re stuck with more people than you budgeted for
I can think of two reasons.
The company is approaching negative cashflow and needs cuts to remain solvent, or reportable results are tracking below market expectations and announcing cuts will appease shareholder concerns.
Only when measured by the bizzaro world of tech valuation. They've never made money and if you took their current revenue and converted it 100% to profit they'd still not quite justify their market cap.
I know at least some mildly incompetent people that were hired in medium to senior positions at Hashicorp. It's not unique to Hashicorp, but basically by just being in the valley you were immediately guaranteed high paying jobs against much more competent peers. Yes this might be problematic, but a lot of these people should never have been hired in the first place.
Unfortunately there is something extremely toxic about VC money(not saying it applies to Hashicorp) which is that growth is defined in headcount.
I sort of cynically assume that the layoff takes the subsequent attrition into account. Like I imagine they actually wanted to cut 10%, so they do 8% and let attrition take care of that remaining 2%.
That's not cynical - that's just realistic management.
If you are current at headcount X and want to be at headcount Y by the end of the year, you don't let go X-Y people: you need to take into account the expected voluntary attrition for the year as well as any critical hiring you may need to do.
It does seem like mismanagement to me. Certainly there are some exceptions, but relying on layoffs to manage costs isn't free and depending on how it's done just violates the "treat people they way you would want to be treated" principal. That's not free, enough of it changes culture, and workers will adjust how they behave in a cut-throat environment. It will cost companies eventually in various dings to productivity.
I don't know about HashiCorp in particular, but usually, there's enough metrics for a company to see that they are headed into an overstaffing situation and work to correct that without layoffs. A true hiring freeze combined with natural attrition rates goes a long way. It varies, but a 5-15% for attrition is pretty common. And you can offer incentives for early departure to bump that up.
Also, depending on industry, there are other levers to reduce cost or boost margins that you could pull before resorting to layoffs. Including both labor and non-labor levers. Layoffs often feel like the lazy path.
I don’t disagree, but turnover is also subdued in a soft market, therefore the strategy is less efficient. I also assume some layoffs from others may have created an attractive pool of candidates that will be much easier to attract from a lower baseline. Regardless, this does have impact on morale as discussed here and further down the comments, and to some extent is raising alarms for customers too. I.e. what does that imply for the level and quality of support I will be receiving as a paying customer. Big customers do need both financials and growth due diligence before committing on a contract and that event may play well on one side of the equation less so on the other.
It isn't unusual for turnover to be much lower than 8%.
Having said that, I mostly agree with you. If they are selling the market on growth, there's no way to do that while simultaneously letting go 1 in 10 workers purely due to cost.
They get more completed work out of the engineers they "over hired" before they have to let them go. Then they'll move 3 cheap engineers to maintain that shiny new product that 30 laid off engineers built.
It does, but temporarily. If layoffs caused terrible, permanent, irreversible, core damage to a company, then companies would stop doing them. But they don't. It's not new, it's part of the up and down cycles of markets.
If we don't like layoffs, then we should also not like crazy hiring sprees either because of their recklessness and waste.
Many of them froze hiring last year in the summer and fall (Amazon, etc. definitely did a freeze). It's just that a freeze rarely makes the news like a layoff.
Moving people around isn't easy - teams aren't likely to willingly let go of their most competent employees, and when they do, the timelines they give for such a move are often months as they wind down that particular resource.
Additionally from the perspective of employees - you are taking on most of the burdens of job change - learning new technology, having to familiarize yourself with new people, organization - without the benefit of a higher salary.
Because corporate leadership is paid to Do Something (TM) so stock gamblers can spin yarns about how the fundamentals changed so you should overpay for their Magic Beans Inc shares.
Nobody will leave voluntarily now if they joined during the 2020-2022 hiring boom and they know are sitting on ludicrous compensations which they know they won't get anywhere else in the current economy. So unless they're stellar engineers with top offers in hand, they're more incentivized to sit tight until the market recovers instead of leave empty handed in these uncertain times.
Waiting for natural attrition now means the poor/mediocre ones who don't have better options will stay, and only your best will leave voluntarily, which is exactly what you don't want. Ideally you'd want to cut loose the dead weight holding you back and prop up your rockstars so they stay.
First, employees aren’t fungible. Some teams will expand, others will contract. Second, the recruiting apparatus needs some baseload to healthy operations for when the tide swings.
Why do you think all layoffs are morale killing? The first people a company lays off are usually the least performant/useful/valuable. I wouldn't mind at all if all slackers at my company got booted.
>The first people a company lays off are usually the least performant/useful/valuable
Quite naïve to assume this. Speaking to the most recent round of tech layoffs at my workplace, the higherups said repeatedly it's not based on performance. They didn't elaborate on the methodology at all. We had people who had just been promoted get fired, and we had people who were long-time employees and high performing get fired.
> the higherups said repeatedly it's not based on performance. They didn't elaborate on the methodology at all.
Ours said the same thing. PIPs get axed on every round, but our last one was heavy on employees over the age of 50 ("long-time employees and high performing").
This isn't the sort of thing anyone ever admits what it is, only deny what it isn't.
Come on, you have to really try to create a narrative where having a set of plans which are done with a set of people to do them and then you remove some of those people and it doesnt disrupt those plans.
People don’t like surprises, and they don’t like having plans messed up.
Just because you, personally, might have a role where you (?) aren’t part of plans or don’t do planning doesn’t mean that broadly speaking, you reflect the average of the teams in your company.
It’s far far more likely that if you dont care about your coworkers, you’re an outlier.
While it seems like the most rational approach, it isn't. Companies don't typically include many employees in an improvement program, so when 'low performers' who haven't been covered by such a program are laid off, the remaining employees start to question the fairness of the performance evaluation and the company's commitment to its employees. [1]
The whole industry switched to stack ranking. I wonder what potential long-term effects could emerge.
It is somewhat tiring but Gergely Orosz continuously makes the naive mistake of citing the company values as a critique of their behaviour. Taking a lesson from the "realist" perspective in international relations, companies are acting rationally. They are protecting their own interests. Both in espousing values they may not actually hold, and in dispatching with unwanted workers swiftly. In a high interest rate regime and with downturn in the market it is entirely rational for tech companies to shed workers with this sort of clinical brutality. That's why we've seen so many do it. On the other side of the balance under low interest rates and a booming market, we also see tech workers playing off companies against each other to improve their compensation or even slacking off work. This is also rational.
This kind of moralizing has become the bread and butter of his Twitter brand and it really is tiresome.
This argument boils down to: Companies can't be criticised for using values for marketing with no intent to abide by them because it makes market sense to be ruthless
The problems with this idea:
1. It misses that morals can be criticised not just legality, and as economically advantageous as it is, it is still unethical to decieve
2. Even in a totally cold economic sense, the criticism you get if you go back on them is itself a risk that these companies should have considered when they produced these marketing values. This blowback should be an economic disincentive against acting that way in the future if it decreases trust in the company. This may materialise in economic effects as less free overtime and higher wage demands from prospective employees who adopt a similar ruthless attitude.
> Companies aren't the kinds of things that can meaningfully have values, and 'criticism' along the lines of the OP takes for granted that they can and do, in a way that makes outcomes like this Hashicorp layoff meaningfully surprising. This gets in the way of the correct critique— and thereby in setting the correct expectations.
The moralistic tone makes the event described seem somehow exceptional, when the crucial lesson is that it is not at all. It also directs people towards a useless simulation of politics (yelling at people, or in this case companies, to scold them) in place of the real thing (fighting institutions by disrupting their basic functioning, exercising power to change incentive structures, etc.). The stress on the economics is about directing people to the information of strategic significance, not narrowing the bounds of acceptable critique per se.
This take is infinitely more naive. Everyone knows that companies act in economic self-interest. That's not the point of contention or where the discussion is situated at all. Orosz is knowingly evoking social and moral frameworks, rather than self-oriented economic ones, for evaluating these actions.
It might aid your understanding to consider that while companies behave out of economic self-interest, socially conscious human beings have their own vested interest in highlighting behavior that falls short of social standards. Companies like HashiCorp generate brand capital by co-opting the language of human values and social cooperation. It is not unexpected that people would try to hold them accountable to their own positioning on values.
I agree with your retort. It's totally fair to call out a company when they contradict their own core principles. I just wanted to add (and this doesn't contradict your point), none of us should be surprised when a company's core values are performative. I think it's naive to see any of this as surprising.
> naive mistake of citing the company values as a critique of their behaviour
> companies are acting rationally. They are protecting their own interests. Both in espousing values they may not actually hold
A value is only a value if you'll follow it against your own "rational interests". Claiming you hold a value and then ditching it as soon as it's convenient is a form of fraud. Not one necessarily with monetary damages, but fraud nonetheless.
Western society has got quite a lot out of being generally high-trust and it is not good whenever anyone corrodes it by making cynical promises which they do not intend to keep, and it is right to shame them for this.
> society has got quite a lot out of being generally high-trust
I agree. The vast majority of times you pass someone on the street and don't expect that person to turn around and stab you in the back and take your wallet, is not because of the existence of laws, but because of the existence of trust. Laws (particularly criminal code) must exist for the minority. This is one of the reasons why I hate "trust-less" systems -- societies cannot function that way. It's as if a program was not trusted to access even the memory that was allocated to it, and the OS had to check permissions and run validations on every single CPU instruction issued by the program. Trust saves resources.
Most useful values frameworks have inherent tension in them.
I don't work at Amazon, but their LPs are well-published, so I'll use them as an example. "Bias for Action" is in tension with "Dive Deep" and "Insist on the Highest Standards". If Amazon takes an action that is quick but didn't dive as deep as literally possible or achieve the highest possible standard, have they violated two of their LPs, or did they just use judgment and prioritize bias for action over those other two?
They fairly explicitly call out that "Bias for Action" applies to low stakes, or easily reversible decisions, whereas "Dive Deep" applies to irreversible, high stakes decisions[0].
"Insisting on the Highest Standards" doesn't conflict with "Bias for Action" either. You can take a quick action, realise it's not up to a high standard and insist that it's improved; as opposed to saying "good enough, we're done".
> Most useful values frameworks have inherent tension in them.
That's ostensibly why Cantrill was going on [fairly entertaining] tirades about the difference between principles and values. By providing a cultural foundation of muddled and inarticulate precepts, and by ambiguating values and principles, leadership was being derelict in its duty to own the responsibility for discernment in scenarios where principles were in conflict with each other.
Yes, and at Oxide we have taken this a step further, being explicit about the fact that values are in tension[0] -- and then even asking candidates to describe a time when our values came into tension for them and how they dealt with it.[1] Not to imply that any of this is pat or easy, but I think it's been helpful to explicit about that tension -- and it has also (broadly) prevented us from weaponizing values (another common failure mode).
I think the argument is - So then don't promote BS values during boom times that are just meaningly words you have no intention of following when times get mildly non-boomy.
How are the values BS? Is there some way to encode the values as to prevent the layoff magically? Is it more kind and transparent to tell everyone at once? Or not? I think that is really subjective and situational. For some, maybe many, there is no ‘kind’ way to layoff or be laid off. I don’t know that the values become BS though, there is a lot more going on there than layoffs and they can apply those values to those things.
Of course they are BS, but it's not Hashi's fault in particular.. its the whole thought process industry wide of hiring these consultants to write glossy garbage.
Companies exist to make a profit for their owners. We work for them exchanging our output/time for money. We aren't family or friends. Companies aren't our church, social club, or local pub.
I've worked at companies that had simple 3 word values list of - Integrity, Discipline, Excellence.
In other words - work hard, get good results, don't lie/cheat/steal. That seems pretty good set of rules to live by.
I take offense at companies that have these lists of core values as if you are in the Miss Universe pageant or applying to an honors society. It's just not what they really want in practice out of you, nor is it how they will really treat you when the chips are down.
In this case, you're shooting the messenger. You can think that citing company values can be moralistic, but at the end of the day it's all about showing the people to not drink the Kool-aid and how ruthless the market is.
It's easy to say that the ZIRP time was the main drive of this decade for the crazy market where we are, but let's not forget that most of those companies lured people and part of the market based on some misleading "employer branding" optics like transparency, being a great employer, autonomy, inflated salaries, distorted incentives and so on.
They are co-responsible for these shaky times as well also.
Presumably, this company will want to hire again at some point in the future. At that point, people will look back to now, and some will go “perhaps not” RE the poor handling of layoffs. If nothing else, this stuff doesn’t happen in a vacuum, and one might be forgiven for assuming that if they can’t do layoffs properly, they are likely poorly run in other ways.
Personally if I was looking for a job I’d be sceptical of potential employers who handled layoffs notably poorly; it’s just not a great sign of their general competence. There’s nothing rational about advertising that you’re bad at this stuff.
Companies are run by people and their goal is to provide services to people. In general, the goal of the economy should be to serve the people, not the companies! If a company does fucked up immoral things, it will hurt their bottom line eventually, especially if they are called out. They would not try to look good if this was not the case. Some people will just refuse to use their services because they are aware the suffering some of these companies are causing. There is nothing naive about this, in fact I find the rationalization of the fucked up self-serving logic of these companies absurd and insulting.
Their goal is to make as much money as possible. "To provide services" is just a way to get there.
> fucked up immoral things, it will hurt their bottom line eventually, especially if they are called out
There are literally thousands of examples where this is not true, and where the "hurt" comes long after the fact, if ever (DDT, PFAS, plastic, oil extraction, deforestation, animal agriculture, ...).
> try to look good if this was not the case
Hence the popular term "wartime CEO" ... painting the situation with nice words to extend the extraction period.
This isn't a nitpick. It's the point under contention. Companies setting core values like Hashicorp has are ostensibly saying "we're not just all about profit, we care about how we obtain that profit." Positioning companies as having a singular goal of "making as much money as possible" is not a universal absolute. It's a choice we make. Let's choose differently.
For example, I'm not in business just to make money but because I think that what my company does is important, valuable to our customers, and good for the world. I also want to get paid and feed my family, but I have options and will walk if I feel like leadership at my company no longer cares about the values they established. I stay because I trust my leadership.
Yea he seems to have really double downed on the more gossipy side of tech. I don’t understand the play (outside of sensationalism), and I’m starting to lose faith in his brand.
I don't say this pretty much about any person, but I can't stand Gergely Orosz. He was a line manager at Uber EU, and makes notes of his time there like he was SVP in Silicon Valley
He speaks of broad terms of "how things worked", like - there are thousands of EMs and Directors right here on HN with triple his experience who can only speak to their team/group/division, would never act like they know what happens on other engineering teams outside their org.
Other than his "expertise" his newsletter is pretty much the same as browsing Blind. Getting DMs from people with their personal opinions about their employer (im sure he doesnt even verify that) and reposts them
> It is somewhat tiring but Gergely Orosz continuously makes the naive mistake of citing the company values as a critique of their behaviour.
Orosz being Naive or not, there is a contrast to what Reid Hoffman and Netflix have been advocating. Hoffman advocated that a company and its employees form an alliance. When their values deviate, they depart. Netflix advocated something similar using the professional sports team as an analogy. Companies are not families. Companies are not there to "take care of" people. At least to me, the Hoffman and Netflix are more practical and more honest.
corporate "values*" always come with the small print of "*as long as it maximizes profit."
it is silly to think that any for-profit corporation is ever going to do something that is directly contrary to its financial interests.
you can (and i do) definitely argue that having strong values does contribute to long term profitability, but the purpose of the "values" is to maximize profit.
when a conflict arises between the values and profitability, profitability always wins.
The way US companies do these kinds of layoffs staggering. In the UK redundancies are announced, the areas of the business to be impacted are informed, there is a review period of a few days to a few weeks, you are then told you are being made redundant or not, you then have a chance to propose an alternative role if you wish and if you’re still being let go you will be told a date and a process put in place for exiting. At a large company this process can take a couple of months and the steps are made very clear and transparent.
This just means a lot of these people wouldn’t have a job to begin with.
Not saying one is better than the other, but if it took months to fire people, lots of US tech companies wouldn’t have grown 30% without thinking twice. Leaving many of then people let go today without an entry ticket to tech to begin with
Just to be pedantic, in the US there may be little difference between being laid off and being fired, but in the UK there's quite a difference. We're talking about layoffs/redundancies, and yes it's hard specifically to discourage these poor labour practices.
However in the UK firing someone is much easier than this. There are protections, and in some jobs (like the civil service) it can be difficult to fire, but that's not universally true.
In the US there is a big difference between fired and laid off. Fired means for cause, and when asked the company will say "bad employee, you shouldn't hire them" fired also means you don't get unemployment as it is your fault you don't work there anymore (this varies from state to state). Laid off means you were an acceptable employee (or better), but the company just doesn't need someone to do your job anymore, when asked they will report you left in good standing, and since it isn't your fault that you don't have a job you get unemployment while looking for a new job.
Fired is so negatives that companies will rarely fire anyone. They prefer to ask you to quit - you still don't get unemployment pay (varies from state to state, but it is your fault you are not working). If this happens it is in your best interest - while it is now your fault you quit (and you cannot sue them for it - which is why they do it and a downside to keep in mind!) they will then report that you worked there in good standing until you left. In practice most companies only fire someone when they discover actions that would go to the police.
That same argument could be made about lots of worker protections, from safety controls to minimum wage standards.
Greater worker protections leading to greater stability rather than a boom and bust over-hiring and mass lay-offs sounds like a feature, not a bug, to me.
That kind of "stability" is more accurately described as stagnation. It may protect workers in a narrow sense, but it also disincentivizes the kind of productive risk-taking that leads to business creation, innovation and overall societal increases in wealth. This type of worker protection scheme is what people tend to reach for because it's the first thing they think of and it sounds sensible, but it can really drag on society in the long-term.
A much more effective approach would be to make loss of employment not be a big deal, e.g. through stronger social safety nets. That way you ensure people's lives are financially stable but without introducing friction to efficient allocation of resources. Ideally, losing your job would be no more than a mild inconvenience - like having to buy a different brand of milk because your usual is out of stock. That ideal isn't realistically achievable, but we can at least try to get closer.
nice tantrum - however, not only will you get decreasing quality of co-workers, the growth is in capture of the entire transaction and relationship by controlling 3rd parties.. insert management consultants, HR people, contracting houses and yes, indentured young males from poor places, who have their complete identity captured by the "company" that places them.
The alternate history of labor is.. most labor in many places was done by slaves or indentured workers over time. As coding is commodified with more rules, oversight and pre-built actions to be performed by button monkeys, the control of the workers is where the growth in earnings is.. You skilled intellectuals are just getting the flavor, now that the first booms are over.
>, lots of US tech companies wouldn’t have grown 30% without thinking twice
So what? Apparently that didn't work in any way, since their stocks are crashing and they need to mass fire. So what's the benefit of what you are saying at all?
And why would 30% growth be some goal just because its a high number, compared to a stable job market?
Let’s not forget to mention the very common practice here of taking away projects, making your job worse, reassigning you to a manager you hate etc to make you quit.
UK HR teams aren’t staffed with angels and in my experience are great at feigning ignorance of the law
And the government did not condemn fire and rehire by BA etc a couple of years ago
This is not universally true in the UK. My employer laid off about 10% during the current downturn, and those impacted found out quietly, while everybody else was left to wonder why people were suddenly no longer in the employee directory.
There is a requirement to have a "group consultation" in the UK if 20 or more people are being made redundant which often means the process is relatively well telegraphed. But the "group" which must be consulted with is only people who are at risk so it can still happen relatively quietly if redundancies are limited to a certain team/etc.
In addition, there's no requirement for you to assign them work or require them to be in the office in this period. You can send someone on garden leave while working through the process, you just still have to pay them.
> If there are 20 or more employees affected by redundancies, your employer must hold collective consultation.
Of course, it relies on affect people knowing their rights and being willing to stand up for them, which isn't always easy, especially if you're not being let go.
And in the USA, unemployment is really low, and is usually lower than other countries in most economic climates. Investors are more prone to invest in new or expanding companies when the leadership is able to protect their assets faster by shedding costs in the event of a downturn. Wish we had a better healthcare safety net for people, but overall, I think our system is better.
After a few cycles on Wall St tech, what I cynically observe is this:
Individual firing takes months, and up to a year, with management papering the decision and only doing so during certain times of the year around the review and compensation cycle. Sort of like the FAANG PIP process. The person being fired still ends up getting severance, etc, they almost never bother with for-cause due to legal burdens. Quite often no one really gets fired but they play chicken with you by giving zero raises and cutting your bonus until you quit.
Mass layoff firing is usually announced and followed through on in weeks. Usually they go after low hanging fruit, but often that might just be out of favor teams/departments/divisions more than just poor individual performers.
It really puts weird incentives in place for people who might want to skate. If you do a bad job - you have many warning signs before you are fired, if ever. And then everyone has an equal risk of random layoff.
People don’t all have an equal risk of a random layoff. There’s some baseline, non-zero, random risk for everyone, upon which is added/subtracted a factor which is individual in nature.
On a team of 15 laying off 2, do you really think that the highest performing employee has an equal risk as the newest joiner or the lowest performing employee?
No, but in some ways its really worse than that.
The pattern I tend to see is the most expensive for their title level gets laid off, that is to say, the oldest.
So the incentive is to relentlessly chase promotions, but not so much that you reach a level you are incompetent. But also not too slow, such that you are at the top of the compensation band for your title. Also don't plan to work in this industry til your late 50s.
Ideally the "most expensive for their title level" would be the most valuable for their title level, rather than the oldest. To the extent that there's a mismatch and salaries at some company are set by age instead of value, it shouldn't be surprising if layoffs tend to hit those on the wrong side of cost-vs-value.
The idea that, all else equal, someone should be paid more to be a 50 year-old Senior Foo than a 40 year-old Senior Foo is just wrong and, when/if implemented, could easily be the source of this apparent ageism during layoffs.
In a title-band compensation controlled org, oldest in band being highest paid is extremely common outcome, think about it. Once you hit the terminal IC level, a developer may be in that title band for a decade or more.
At a typical bank it's like..
Analyst->Associate->AVP->VP.
However from VP on up, the pyramid narrows sharply.
The ratio of Analyst:Associate may be close to 1:1.
The ratio of Associate:AVP may be 1.5:1
The ratio of AVP:VP also around 1.5:1 or 2:1.
However from there the ratio of VP->ED and ED->MD are like 5:1 or worse.
ED&MD are far more executive management type roles. Zero coding, you may run an org of 100 people.
So the earliest you hit VP might be like 28ish.
But you'll find VPs that are 45 to 50 easily.
It's an up or out level. Slowly accumulating raises as you age without seeking a management role means out eventually.
Sorry. I'm not arguing it doesn't happen. (I agree that it's an extremely common outcome.)
I'm arguing that it shouldn't happen and, if it does, that would explain that layoffs disproportionately hitting those whose return-on-cost is lowest means disproportionately hitting those whose candles-on-cake is highest.
> Slowly accumulating raises as you age without seeking a management role means out eventually.
At whatever the career level is for your org, some people should probably stop getting merit raises entirely. If their merit isn't increasing, there's no reason their pay should be either. They could drift up as the entire market wage drifts up, but if a 10-years-at-VP is just as valuable as a 20-years-at-VP, they should be paid the same. (I'd much rather start having that conversation when they're 11-at-VP and get no merit raise and it's still a good time economically than 9 years later when they're surprised to be shown the door with zero warning after a string of merit-free merit increases and a stack of "meets expectations" performance reviews.)
I know this is an aberration during particular boom times, but there’s been a couple of times in my career (circa 2012 and 2020) where new hires were routinely being paid more than more tenured employees at the same level. It’s because large companies try to align comp to some local market benchmark, for example the 75th percentile, but that only ever applies to _new_ offers. I’m yet to experience a company that when faced with data that says there’s been huge growth in compensation year on year go through and give everyone big pay rises.
> I’m yet to experience a company that when faced with data that says there’s been huge growth in compensation year on year go through and give everyone big pay rises.
I have actually had a former employer do this once. I think it worked out best for those with 2-3 years of experience, some of whom got 20-25% pay rises, while those with 0 years of experience were closer to hire date and hence what the company considered market rate, while those with more experience were better at negotiating raises on an ongoing basis.
It depends on how big a company is and how their HR works.
I worked at big dumb banks that gave outsize raises the year after promotion to "adjust for market rates" but then in high performance years gave negligible raises because we were all just numbers on a spreadsheet.
The incentives this create as well are perverse because performance becomes less a driver of a big raise in the short term.
In the long term of course, the performance probably drives the promotion which is the thing that gets you into the higher band in which you can be awarded random unearned raises.
However in the long term its easier to just jump ship for a guaranteed 20%+ bump than to pray for a random 10% every N years.
The way US companies do these kinds of layoffs betrays the undeniable immaturity of the United State's "leadership class". All rah rah rah until it's anything negative, and then they are scared little boys and girls, hiding the truth.
What makes you think all US companies are like this? A lot of non tech roles were made redundant at my last job, affected people had a 90 day notice and if they stayed the 90 days a hefty severance based on years worked.
My current company does it similar to what you said and gives you time to find a new role or relocate.
The first company I worked for called people into a room and RIFed them out of nowhere. People still got hefty severances.
It’s not a one size fits all approach, start up’s are usually less caring and ruthless with layoffs.
Switzerland has also liberal labour laws and people can usually get fired with either 1 month or 3 months notice. This kind of flexibility in the labour market is clearly an advantage because the US and CH have some of the highest salaries and lowest unemployment in the world.
> This kind of flexibility in the labour market is clearly an advantage because the US and CH have some of the highest salaries and lowest unemployment in the world.
It really is quite a big stretch to assume that this is a causal mechanism. You only need to look to Scandinavia to find a counter-example.
I think it is more reasonable to argue that high salaries in US are fuelled by borderline slave wages for menial labour. And Switzerland's wealth comes in a historical context that is completely different from the US - it's almost impossible to blanket compare them side-by-side. The difference in population size is another huge issue with such a comparison.
Swiss labour laws are a bit more involved than that. You can fire with 3 months' notice, yes, but not if the employee has recently been unwell or had an accident, and not for any number of legally protected reasons (including the employee being absent for mandatory military service, employees exercising their legal rights such as freedom of speech in ways not directly related to the workplace, or as a result of a dispute between employer or employee if there was no misconduct). Full list (in German): https://www.seco.admin.ch/seco/de/home/Arbeit/Personenfreizu...
So effectively, the burden of proof is on the employer to show that the reason for firing is a legal one, but that does include "orders drying up so we need to cut back on staff who would otherwise be idling".
Courts can and do award fired employees up to 6 months' salary as compensation if employers overstep the lines here. And because Switzerland has a well-working legal system, that means most employers don't abuse their firing powers, and making a facebook post on $CULTURE_WAR_TOPIC from a non-work account is unlikely to get you fired unless your role is "brand ambassador" or executive officer, for example.
Also, if you are fired in Switzerland and you're a citizen, you have very generous (by international standards) state redundancy/unemployment benefits.
I agree with the parent poster that the flexible labour laws are part of what makes Switzerland attractive for business, but I would much, much rather end up being fired under the Swiss system than the U.S. one.
That may be permissive in international terms, but it’s a huge protection for workers compared to the US. You are not guaranteed any days warning in the US.
France, a country famous for workers protections, also allows for:
* rupture conventionnelle, by mutual agreement, which requires at least 1/4 month salary per year on the job for less than 10 years, 1/3 month for more than 10
* licenciement économique, which has a mandatory procedure, and requires 1-2 months notice of the employee, with a compensation same as the above
Since the procedure for the second one is a bit involved and requires approval from the mini-union embedded in all companies over 50 employees and a government agency (since it's only intended when there's economic troubles), often employers would prefer to pay extra compensation in a rupture conventionnelle instead of wasting time with the procedure.
Honestly doesn't sound much more complicated than Switzerland, yet nobody would say this allows France to have low unemployment.
> This kind of flexibility in the labour market is clearly an advantage because the US and CH have some of the highest salaries and lowest unemployment in the world.
Post hoc ergo propter hoc. There are plenty of other reasons that the US and Switzerland have become wealthy, you can't simply assume that liberal labour laws are a factor.
I think it's a bit of a stretch to compare the 2
I don't think the US has any period of notice
Switzerland has many benefits US definitely don't get, like holidays
Strong unions in Switzerland fight to keep wages up
As an Eastern European - that's actually not true.
Any form of this comes from abusing the temporary work and contractor system(not exclusive to Eastern Europe, but here it's common).
But still - even as a pretend temp worker you normally don't get fired on the spot without notice because with the current demographic situation employers can't afford to do this and will usually include some form of notice in the contract to protect their interests.
Also illegal employment, especially in construction, is still very much a thing around here and I would think that, if anything, is a greater factor.
Premise: not referring directly to Hashicorp employees, as I'm sure they're leagues above my average colleagues.
As a SWE who's been in a couple of companies of small-to-medium size, and now in a relatively successful fintech scale-up that's running a (very long) hiring freeze, I can say that I've seen this layoffs season coming from a thousand kilometers.
Now matter how successful your company is, you can't start hiring bonobos with no clue about how a computer works just because your investors asked for an X% increase in head count and then be like "sorry, we didn't plan to fire you as soon as things got serious" with clueless employees. And people have been gifted tech jobs for years now.
It's not people's fault if they're not good at their job yet they get hired for senior positions, just to realize something's not working as soon as the job market needs qualified professionals in tough times.
Now we're all in a bad predicament: we have to waste countless hours interviewing "senior" engs with basically no skills to speak of, and they are getting depressed because nobody's gifting titles anymore, but have no clue on how the whole process actually works.
Now somebody has to tell Jessica that posting screenshots of code on Twitter is not devrel, and Guillermo that not knowing React 18 is not totally ok for a tech lead of a React shop. And I totally don't want to be that guy.
I ran into the opposite situation. The people they hired were pretty good, but like you said the VCs gave the CEO a headcount target to hit in engineering and he did it because I guess the VCs are the ones calling the shots.
Instead of just being honest and saying "oops, we need to cut spending, they created bullshit KPIs and useless metrics to start marking people as underperformers"
So I suspect a lot of the VC funded companies have had 10%+ stealth layoffs.
"He who pays the piper calls the tune" is a saying that's over 400 years old. If your company is depending on VC funding for ongoing survival, the VCs are calling the shots. If your company is generating its own sustainable cashflow, the CEO is in a much stronger position to call the shots.
KPIs are also killers of quality. I just planned a tech migration that the whole tech team agreed on, and that would bring countless advantages to the company, that got ultimately rejected by higher-ups just because "it doesn't fit into your (mine) semestral KPIs".
KPIs are a good way to make sure nobody overperforms or shows signs of cross-functionality. The moment KPIs take over a company, people get turned into bots.
Yep. These are basically the people that never bring any value during incident response or when any crunching time needs to be put in. The problem with title inflation is that on a surface level they’re indistinguishable from actual professionals, so there’s no way to skip the interviewing part.
I understand the frustrating experience you have had but I tend to consider the underlying problem to be leadership recruiting/hiring in the situation you described. Like it's not your fault your leaders are unwilling to correct their hiring mistake and needs wait for a company wide layoff as an excuse to put their foot down. That is just terrible leadership all the way down.
0xCAP appears to be in the EU (or at least at one point talked about something being priced in Euros). A quick glance at https://www.first-name.net/jessica and https://www.first-name.net/guillermo doesn't immediately turn up any country in which both 'Jessica' and 'Guillermo' seem reasonably common.
Of course, OP is obviously in one of the many countries where Anglo-Jewish women and Hispanic men make up the majority of the population, especially of tech workers.
The irony here is incredible. Diversity initiatives often replace traditional European or male names to suggest more kinds of people being involved. But you could tell that OP was being unrealistic.
It seems obvious that efforts to hire specific types of people could result in lazy hiring managers looking to check off a box as fast as possible which leads to someone being hired because they are named Jessica not because they are especially good a React.
"HashiCorp just let go 8%. Investors listening to earnings heard it before most employees." As much as I can empathize with the employees let go (it sucks), Hashicorp has a legal duty to inform investors of material information like this as soon as it becomes public, so it is normal that employees learn this way. There are a bunch of things that can be done better (or worse) handling layoffs but this one is hard to get around
In Germany, a termination is valid IFF the termination has been submitted to the employee in writing in a timely manner — that is, they need to have been able to receive it before end of month or it’ll delay the notice period by a month. The standard notice period is 3 months. (I had to do this quite a few times recently unfortunately).
To be fair, I've submitted multiple requests for a fristlose Kündigung in Germany and never had it declined. Unless your role is absolutely critical to the company and a replacement must be thoroughly trained, most employers would be happy to oblige. As it turns out, it's expensive for the company to keep paying someone who's effectively "checked out" for 3+ months after they submit notice.
Not the only company doing stealth cuts. The only reason it was declared is because it's public. Many will try to mitigate reputation damage by brushing it under the covers. They will not tell other employees who left or why. It'll just be unspoken about. Horrible toxicity created with this behaviour. Speaking from experience.
I could be wrong, but I think fired usually means "for cause". It makes a difference in unemployment claims and unemployment liability. For example, I believe if someone sexually harassed someone and is fired it doesn't count for unemployment liability on the part of the company.
You start firing people, people start refreshing their CV instead. Cooperation at work dies, toxic competition takes its place. It becomes more important to look better than your peers than getting stuff done as a team.
Kills morale, kills productivity, bad for the future. Instead by simply freezing hiring you could "remove" a similar amount of workers in 18/24 months just by the natural turnover that most tech has without the correlated drama.