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Comment by drawkbox | Hacker News Reader

Let's just say the average salary is 70k which is very conservative. That is 14k * 70k annually lost from the local community, a grand total of 980M or let's just say 1 billion annually.

Looking for another job when there are massive cuts like this also degrades the salary they accept on their next job because of the competition.

I wish companies, if possible, throttled layoffs a bit more instead of large chunks like this, but that is unlikely as the board/CEOs are looking for a stock uptick when they do and don't want to drag it out to affect the market value (translation: their own pay / stock value/price).

We rarely look at the amount of money lost in communities when things like this happen but it would be nice if reporters put out the lost community dollars/salaries along with the layoff number. The Great Wage Stagnation continues in our consumer driven economy.

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I've been through throttled layoffs in the past. They're much much worse.

1) You're always looking over your shoulder, and can't think about long term projects or work.

2) The first people out (frequently the weakest performers) are able to find jobs the easiest, but by the time the better employees are also let go, the market demand has been filled.

3) It encourages and environment of non-cooperation. Employees cooperate more when they think they'll see each other again. If it's "there's 3 of us here today, and probably only 2 in a few months" then there are multiple incentives to not compete.

Better to get it over with all at once wherever possible. Companies that need multiple rounds are usually either mis-run or in markets deteriorating extremely rapidly.

I agree, its like being stuck in purgatory. Although, I disagree somewhat with your last statement -- in my experience, all throttled layoffs have been a result of acquisition synergies. The current one around me is by a market leader with a great past and excellent vision of the future.

From my experience there's an easy way out of this: take control of your own career. Ask yourself: are these the conditions I want to work in? whats best for me; family; situation? Are there opportunities here while everyone else is looking over their shoulder?

But when layoffs are as big as 14k, rarely are employees evaluated for individual value...it's usually entire business units or office locations that are closed. Throttled or not, the people exiting Cisco have likely already been picked...not much they can do about it in the meantime.

20% is a very high number, especially given how many layoffs Cisco has had. I've been in situations where 10% got laid off, and there were still weak performers who could be let go. This usually happens in cultures where it is very hard to fire people, so they use layoffs to cover for weak performance management. (And weak performance management can be a cause to need the layoffs to begin with)

Serial acquirers almost always are in throttled layoff mode. It's how they justify the acquisitions. Companies that have been passed by the market (think IBM) tend to cut gradually over time. Occasionally you have companies where both have happened. (Think your phone or cable company)

> wish companies, if possible, throttled layoffs a bit more

The uncertainty will cause a lot of stress. As a red badge at Cisco some years back, layoff talks used to cause me serious anxiety, even though my parent company would just move me to another project.

The bigger problem with Cisco is that people speculate about layoffs and there are continual leaks. This really upsets employees, and causes considerable emotional pain for them.

As someone who made the mistake in working for an international office, and caught the train out almost 10 years ago now, I agree. I escaped one set of layoffs and then kept thinking I'm next.

I was next.

Got fired at end of financial year, along with a couple thousand others. Had a new job before the day was out (another result of said anxiety).

Getting fired and getting laid off are very different things!

Am I missing something? They are the exact same thing. The company decides to terminate your employment contract, as opposed to you making the decision.

"Fired" is used to refer to termination for cause. As in, you're being let go because you screwed up.

Being laid off is termination without cause. You're just being let go as part of a workforce reduction.

Exactly - getting laid off means that the job you did no longer exists - it is unrelated to your personal skills, performance, productivity, etc etc.

Additionally, being laid off usually results in at least a respectable severance package. Being fired generally means you only get the minimum legally owed to you.

It also effects your ability to find work. Being laid off can be completely out of your hands and isn't always something that works against you.

There is no stigma attached to getting laid off, at least not when interviewing at anywhere sane. People understand that it just happens sometime.

"For cause" usually means something much worse than "poor performance". That term is generally harassment, fraud/embezzling, other illegal acts, gross insubordination, etc.

Being fired because you are performing poorly in your job is, crazily enough, not "fired for cause" but simply "fired".

Being fired "for cause" usually makes one ineligible for unemployment income.

Thanks. I used the "for cause" a little sloppily. A sales person who misses quota will still be able to get unemployment benefits, while another salesperson who likes to walk around the office without pants will probably not.

Context matters, though.

Being one of 14,000 employees let go because they chose to eliminate that entire half of the company doesn't necessarily mean anything. Being one of four engineers chosen to be let go from a team of 20 can say something about your skill level.

That you were the last hired? The most senior (expensive)?

The practical difference is the ability to collect unemployment benefits. If you're fired you may not be able to collect benefits depending on the situation and state where you live.

Good companies also typically offer some documentation that the termination was not performance-based.

Fired means that they don't want you doing your job. Laid off means that they don't want anyone doing your job.

Damn, that's concise and to the point. Thanks.

To add to this point often stronger employees will exit when this ongoing pain is happening. No-one likes the uncertainty but your best guys can move the fastest. And general morale.

Redundancies are absolutely best done as one-and-done.

Also, would this be a record number of staff laid off in one go 'by choice'? 14,000 is huge. Poor guys.

Yep, happened at my last job. I survived several rounds or layoffs, each with my manager reassuring me that my job wasn't being targetted. Even so, each time a few of our best people would find something elsewhere, even if their position wasn't being eliminated and they ended up filling it. Then my manager left the company which was my first warning sign, some people started finding positions in different areas of the business...then I heard rumors and ambigious announcements again. Me and several of our best people left shortly before hearing that our entire department would be transitioned to a contract position with an outsourced provider, which made replacing our positions that much harder. It wasn't quite a layoff but would mean we'd no longer be full time employees with all the benefits that entails and the contractor could basically do what they wanted with us after a certain amount of time. For those that stayed, I heard its not been great.

> I wish companies, if possible, throttled layoffs a bit more instead of large chunks like this, but that is unlikely as the board/CEOs are looking for a stock uptick when they do and don't want to drag it out to affect the market value (translation: their own pay / stock value/price).

Have you ever actually been part of a company that did layoffs in chunks like you're suggesting? Experiencing that type of protracted wave of layoffs is not fun at all. In fact, it was down right miserable. Going to work each day with the threat of layoff looming over your head is an incredibly stressful experience.

You might consider that there is more at play than just a few executives getting greedy about dollars.

I was in the first round of layoffs a couple years back and it was so nice. I got severance when their guilt to cash ratio is still high, no survivor's guilt, didnt have to worry about how to keep everything running with fewer backup people and a few missing experts, and I didn't have to worry about which round I would be in, or who else they would let go who made the job bearable.

It's kind of strange that massive layoffs like these result in a stock uptick. At least for me it's a sign that the company is probably unhealthy and that its value is going to go down in the future.

http://www.cringely.com/2015/06/03/autodesks-john-walker-exp...

Then short the stock. Long-term put options. What could go wrong?

You're probably being sarcastic, but we just had the other day the problem with shorting: https://news.ycombinator.com/item?id=12294193

Investors short all the time. Your comment seems to be irrelevant to the discussion.

How about this famous short? Soros made a billion dollars.

https://priceonomics.com/the-trade-of-the-century-when-georg...

Did you see/read "The Big Short?"

https://en.m.wikipedia.org/wiki/The_Big_Short_(film)

Maybe the logic is that market is already aware that the company is not in good shape and this is reflected in the stock price. Massive layoffs tell the management is now also realising this and doing something about it, which is then thought to be a good thing.

Another explanation could be that massive layoffs has caused stock uptick in the past and therefore it makes sense to bet that the same thing will also happen this time. (Of course this only makes sense for those who are first to react to the news)

It mostly just confirms my belief that fully half of all white-collar workers in the developed world are adding zero value. They hustle for their first few years, then coast as old products sell themselves to old customers they already established relationships with in their younger years...

I can't fault them for not giving their all every day... I know for a fact I would instantly put in the minimal amount of work required after achieving tenure / seniority / whatever at a large organization.

"It mostly just confirms my belief that fully half of all white-collar workers in the developed world are adding zero value. They hustle for their first few years, then coast as old products sell themselves to old customers they already established relationships with in their younger years..."

This is not necessarily true.

It's more like - as you add people to the pile, you get diminishing marginal returns on value-added for each person yo add.

Trust me - older products that are hardened, and sold through established channels - those are where the juicy profits come from! Nobody wants to mess with that!

The market welcomes ANY sign that the CEO isn't asleep at the wheel, that's all it means.

"It's kind of strange that massive layoffs like these result in a stock uptick"

It means that the company has realized it's in a head-wind, and is cutting costs in order to deal with it. Layoffs are usually coincident with a re-structuring.

Ergo - layoffs mean 'the company is adjusting to new market realities' - which is what investors want to hear.

Layoffs usually happen after the 'crappy state' of a company has been priced into the stock ... so there's usually only upside.

Also - all things considered, a layoff simply means less cost and likely an uptick in profitability, which in a spreadsheet analysis gives a higher valuation.

Cisco is doing a major layoff because they have a new CEO who wants to wipe the board clean and start his term fresh. This is very cynical ... but often true.

Finally - some companies do layoffs long before they are truly necessary. It's 'house cleaning' for them. Cisco does this. Because Cisco is an otherwise strong company, a layoff is good.

This is not like a 'Yahoo layoff' wherein it's just sending people off a sinking ship. So - an otherwise 'strong' company doing kind of a 'ruthless' layoff is usually seen as a good thing in investors eyes.

I imagine the logic is fairly simple: Same business, same products, less overhead. This should drive up profits in the short term, and if operations continue as they were previously, in the long term too. They also get to use terms like 'lean' and 'streamlined' in their investor reports. Stock bump.

To be fair, most businesses in history eventually regress to market-matching through zero-sum tactics like this.

I understand this isn't a good situation for the community, but what about the other side? That $980m isn't just disappearing into thin air.

CSCO will use it to refocus their efforts into more valuable services, which by itself will entail some level of hiring & investment, and if successful, they'll hire & invest more.

If you think this is an optimistic perspective, consider the alternative...CSCO continues employing people who aren't optimally productive for its goals, and ultimately the whole company runs into the ground and EVERYONE needs new jobs.

Layoffs are an unappealing and emotionally-charged but necessary part of the corporate lifecycle.

Will they? Or will they use to just do more buybacks? I'm not sure I trust any company to refocus after layoffs when they practically just announced a huge temporary gift to shareholders.

http://www.recode.net/2016/2/10/11587764/cisco-soars-on-15-b...

Good point. But even buybacks are taking that cash somewhere...it's the market's way of reallocating capital to a place it can be more productive.

It's hard to picture, since that cash is going from one entity (CSCO) to a lot of different entities (the market), but obviously CSCO thinks the market can make better use of that capital than it can.

The only thing that could be worse than what they're doing, in my view, is if they fired all these people and sat on their cash, AAPL-style.

It's unlikely they're going to hire on anywhere near the same number they layoff. Laying off a large swath of employees, only to have to go through a major hiring cycle is extremely inefficient. Finding the right employees is time consuming and expensive.

It seems more likely they'll keep the savings as a quick fix to make them look better to investors. As noted in the article, these rumors are coming out close to announcing their fourth-quarter results.

Not that it necessarily hurts your point, but your numbers are likely way off. The article doesn't say where the layoffs are coming from other than moving from hardware to software. I expect this means that they're firing some designers and largely manufacturing people, meaning the community most hit would be in Asia more than likely. Salaries there are a lot lower, so it wouldn't be as much of a gain for Cisco (though still the same kind of effect for the community effected). They also are probably shuttering some production facilities, which could save them a ton in capital costs, but again, could have a strong negative impact on the communities those buildings are in, depending on if someone else snaps them up.

Can money really "get lost"? I would think a dollar that otherwise would have been paid via salary to one of these 14k now goes some other way. Somebody else gets it. Somebody else can spend it.

It goes to the stock owners pockets, not lost.

And they keep that money in their pocket, do they?

On a personal level, this sucks for those Cisco employees. But it's weird that the land of disruption advocates "wasting" money on unneeded labour. There isn't much sympathy for the taxi drivers Uber is harming.

They keep it in an offshore tax haven, often.

So I own stock in most large companies through index funds. I want to someday retire and the government won't/ can't provide for me to life up to my standards. No offshore tax haven here.

Unfortunately, your case is not the majority. I believe free market would work if it was the case, but it is an utopia, like communism.

His case is in fact the majority, the radical majority. You couldn't be more wrong about how US investors store their wealth, it's almost entirely located within the United States, which is proven by estimates on domestic held wealth by the major banks, the Fed, and the Treasury. If you have something to dispute them with, let's hear it.

Americans almost never use off-shore tax havens, because the IRS has no boundaries on chasing them down. US income is taxed globally, and the IRS will destroy you if you attempt to hide it from them and they find out, which they almost always do (they have direct or indirect access to nearly all global banking, financial transactions, stock transactions, bond purchases; they can also directly or indirectly get access to nearly all banks accounts in first world nations through treaties). There are very few countries where you can even attempt to hide your money from the IRS now, and most of those you'd be a fool to park money in.

Indeed.

I think the % of Americans doing the off-shore thing is very very low.

Now from a raw $$$ standpoint, perhaps it is a problem. Is 10% of wealth hidden offshore by the .1% of abusers? Or is it only 5% I doubt anyone knows for sure. I suspect it is less than the "legally" held offshore money using the double irish and other such accounting tricks.

>They keep it in an offshore tax haven, often.

I guess that depends on what you consider often. Because the money outside of tax-havens "doing work"in the economy is vastly greater than money hidden in tax-havens.

Bad comparison. Taxi drivers losing business to Uber can easily go to work for Uber themselves (in fact, many of them have done exactly that). Someone being laid off by a company like Cisco can't just go work for the competition that easily; it wasn't a simple situation of a better competitor coming along that caused these Cisco employees to lose their jobs. If anything, it's because the work was outsourced offshore, and these employees can't easily chase their jobs to China.

>Bad comparison. Taxi drivers losing business to Uber can easily go to work for Uber themselves.

The lower barrier to entry of Uber means that there are more people competing for those taxi jobs, like people who can do it part-time. How many taxi-drivers did you know pre-Uber? I knew zero. Now I know multiple people who are, basically, taxi-drivers. (I'm making no claim as to whether this development is good or bad, it just is).

So yeah, they can "easily go work for Uber" as a contractor for less money. I imagine that the Cisco workers could do the same if they wanted to be contractors for less money.

If the local community is the Silicon Valley, it should be able to absorb that pretty quickly. Thought there was a massive skill shortage out there.

I know I'm cynical, but from what I've seen, the massive skill shortage is specifically for young, early career software developers willing to work for somewhat subpar wages. A 45 year old embedded systems manager would have a much harder time finding a new job.

Is that because they're too expensive or because potential employers undervalue their skills??

Is there a difference?

Not quite so clear. This is a layoff of 14,000 hardware or low-level networking systems engineers [1], not 14,000 front-end developers, it is not so obvious to me that the current Silicon Valley market is ready to absorb them so easily.

Interesting to think those were the kind of jobs, and CISCO the kind of company, that once gave Silicon Valley its name. Makes you wonder how the market for software engineers, even adaptable always-learning hack-through-the-night-for-fun engineers, might look in 20 or 30 years.

[1] Read "(low-level networking systems) engineers", not "low-level (networking systems engineers )"

I agree but they have a guaranteed job if they retrain. These are relatively smart and educated people. Retraining shouldn't be the end of the world.

In my profession (banking), staff levels have been going pretty much consistently down since the financial crisis, as banks shrink or retreat from certain activities. But these are mostly bright, educated, business savvy people, who end up doing something else. For many it is a blessing in disguise, an opportunity (albeit in a brutal way) to move away from a shrinking industry to become their own boss or to work on the next big thing.

True, but most companies are going to look at them as no better than recent grads if they need to retrain.

Imagine what a guy makes that's been at Cisco for 15 years? Now imagine what you can pay a recent graduate or H1B.

They can retrain as big data specialists! No long term experts out there. A graduate with 1y experience is a veteran.

It's not 14,000 engineers who are getting laid off. It is across all functions.

I always wonder what happens to those software engineers, the "hack through the night" sort of guys. They must eventually burn out, or get replaced by the younger developers who are onto the next "hack through the night" project.

There must reach a stage in development where you're considered "too old" (sadly) or haven't kept up with the latest and greatest in trends.

What do you do then?? Project manage? Do all developers move into project management?

I see this mildly where I work where older developers are greatly valued (they're good!) but haven't kept up to date, eg. a lot of C++ is here, but nobody here (and I mean nobody) has any understanding of C++11, C++14 changes and are stuck in the C++98 ways. They even call C++11 "C++0x" still. This is different to the "learn the next fad" approach, as C++98/2003 deserve to go away.

There is a difference between not knowing the latest and greatest, and not keeping yourself updated with the evolution of your tool of choice. Most people will do the former after a while. It's too much time spend with too little gain. The latter however is not acceptable. I want my developers to know about the latest version of .net, and if they're not using linq they're doing it wrong.

But if they are not using WCF they are doing it right! Not all evolutions of the tool should be followed blindly.

Indeed. Pioneers are the people with arrows in their backs. For a stable system it's reasonable to wait before adopting change; especially if large areas of the existing system are built with a previous technology. Moving to new changes results in internal inconsistency, and possibly problems at the boundaries.

I never stated all evolution should be followed blindly. But once the evolution becomes established as best practice, there is very few reasons to not do it.

But 8y ago WCF was marketed by Microsoft as the future of web services. It was clear to me from the outset that it was a mightmare to configure and unecessary complex. Now I think it is the generally accepted view. But if we have to wait 8 years for each new technology...

8 years for each new technology indeed....

MFC anyone?

With the push to Universal Apps (that nobody appears to be heeding), what is Microsoft's recommended toolkit for C++ in Windows now eh?

Here we are with > 2 million lines of C++, entirely MFC and COM.

>> There must reach a stage in development where you're considered "too old" (sadly) or haven't kept up with the latest and greatest in trends.

Just imagine how much knowledge and experience these guys have and is effectively being lost by them being out of the workforce.

I work with a guy like this. His knowledge base is vast (we're electrical engineers and he's a master of both hardware and software). He's also a shambling zombie from a lifetime of hacking through the night. I'm not exaggerating. He mostly just shuffles through his days, trying to get anything done, but he's just too fried. He rarely sleeps. I've never seen him eat. He won't take vacation days. He seems to have decided a long time ago to just drive himself insane. Honestly, I think if he weren't one of the guys the company can't afford to lose because he knows things about our products no one else in the building does, they'd probably let him go.

This is a personality thing I think. Some people do want to just stick with what they know by the time they are 25 and would rather be unemployed or in management than learn something new. I'm 45. I've worked in video games for my entire working life. Yet throughout that time I've shifted roles drastically every 5-10 years. This keeps things fresh and it lets me stay employed and in demand without having to become a hands-off manager or sit in the corner working on legacy code.

Not really. Depends on how many years they have stayed with Cisco and how old they are. If majority of the layoffs are senior people, they might find it is not that easy to find a good position out there. Those big firms are like walled garden, they made their own wheels, and outside world has moved on since way too long ago.

> I wish companies, if possible, throttled layoffs a bit more instead of large chunks like this,

When you amputate a limb, you want to do it as quickly as possible.

> When you amputate a limb, you want to do it as quickly as possible.

When you throw the bathwater out, make sure you aren't loosing valuable resources.

the best case scenario is to be really smart and constantly drain the bathwater such that the baby doesn't even notice the level dropping. Keeping the baby focused on the new shiny thing helps.

You mean stack ranking? LOL that doesn't work out how you want it to either...

No I don't mean that at all.

I work at a place where we surgically remove deadwood, keep valuable people & tech. Those who have value feel valued.

As an aside I was with 3Com when they tried to go toe to toe with Cisco. 3Com did very much the same thing.. one major event was even called 'Catapult', senior management's intent was to launch the company forward, workers looked on with incredulity as over half the workforce lost their job in one day. 3Com never recovered.

>I work at a place where we surgically remove deadwood, keep valuable people & tech. Those who have value feel valued.

I smell coolaid.

Dam straight, nothing wrong with coolaid if it's good for you. Mid sized company(~3K), 30 years old, well above market pay, stellar benefits, 10-30% bonuses and a very family friendly culture. I don't blame them if they want to keep what works, people are smart enough to smell bs coolaid.

There's never 'layoffs' and never ever entire groups let go. Just regular PIPs for people who you think... 'no great loss'

I'll admit, doesn't scale to cisco though.

Bathwater doesn't have morale. I worked at a semiconductor company while in school and for a bit after graduating. It's a volatile industry and layoffs are frequent. Every time anything happened, people were just concerned about layoffs. On every project, people's concern was usually protecting themselves so they wouldn't get laid off. None of them were really happy in their jobs, but they all had golden handcuffs (I'm in a small state with little high-paying tech work). I can assure you that the effects of roughly annual layoffs (similar to the throttling you describe) is one where people can never get comfortable again, and what should be a rare, isolated event, becomes the status quo. A bad status quo.

There's two ways you can throttle. As you describe, and being smarter about it.

Why not detail this smarter way? I don't see how you get around choosing between 1.) all at once, do it almost never or 2.) Semi-regularly, but in smaller batches.

It's the act of introducing the periodicity that damages morale so much.

I definitely disagree, from the perspective of remaining employees morale. Doing a slow-drip of layoffs is the worst for employees because you basically have to constantly worry if you'll have a job in a few months.

Unlikely for all of it to be within the U.S.

>We rarely look at the amount of money lost in communities

One person's income is another person's expense. Which communities do you speak of?

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