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Comment by Brystephor | Hacker News Reader

Evan also released a report this morning. Some departments such as Snap Minis & games, snap originals, and a few other things like that pixy will be cut heavily/stopped entirely.

Team members in the U.S. are stated to receive at least 4 months of "compensation replacement". Those relying on work authorizations will receive additional support and flexibility according to the email.

Other notable pieces is that Jerry Hunter is being promoted from SVP of engineering to COO.

As a side note: I've had several recruiters reach out to me since yesterday. Yesterday (08/30, day of verge report release) I had 9 unprompted recruiters reach out. Door dash, 2 from Amazon, and a few from some lesser known companies as well. This is with my LinkedIn profile set to "not looking for a job".

sources:

[1] https://www.axios.com/2022/08/31/snap-restructuring-layoffs

[2] I'm a snap software engineer.

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Prior to these layoffs, Evan recently pushed a change to do a Founder Stock Split that would benefit him materially without losing his voting power:

https://www.marketwatch.com/story/as-snap-melts-down-its-fou...

Snap stock to fell ~25% the next day.

How do Snap engineers feel about all this? Are they so into the product and their work that they just don’t care? Or rather, are they also deeply supportive of Evan’s stewardship? (ignore the non-believers)

<not a snap employee> I'd bet most of them just want to work, get paid enough, and left alone to do other things with their lives.

Strong opinions about what a founder does to their comp package is something people who are either close to the top or in an early stage company would worry about.

“Spiegel and Murphy [CEO&CTO] own a whopping 99.5% voting control of the company.”

Why would anyone expect their Class A shares to be treated “fairly”?

> Some departments such as Snap Minis & games, snap originals, and a few other things like that pixy will be cut heavily/stopped entirely.

I wonder how much fat is being debated to be trimmed at GOOG/AAPL.

The Google graveyard will probably double in size

I imagine their businesses are more resilient due to more income streams. Snap is pretty dependent on advertising income. I have no idea what Google's dependence on advertising income is, but I'd assume the ratio is less. Apple has multiple sources of income and I would be surprised to see them do layoffs.

I'm more curious about other companies such as Meta. Especially since Zuckerberg has openly stated there's probably people who shouldn't be there.

> I have no idea what Google's dependence on advertising income is

basically 100%. Cloud makes a little, but mostly it is all paid for by ads

Cloud has yet to turn a profit, but they are on the path to extract blood from stone.

Cloud is high margin, its just that the battle with Azure and AWS is really bloody

> I have no idea what Google's dependence on advertising income

Over 80% of Google's revenues are from advertising [0]

Also, I can't find a source for it now, but I remember reading from a trusted industry journalist that roughly 25% of this advertising revenue is from startups and high-growth businesses. Seems too high to me, but I would expect at least 10% to be from startups.

0: https://www.statista.com/statistics/1093781/distribution-of-...

Investing in stuff like self driving cars should be independent of current market conditions due to the size of their war chest.

The profitable parts of the business are so profitable that would would take massive drops in advertising to really impact the bottom line.

That's been true for every big company that faded away into obscurity. Or at least lost its erstwhile dominance. They usually have a product or division that does so well that it completely dominates the organization. Every part of the business becomes designed, organically or intentionally, to support this division. Innovation falters and new trends catch the incumbent off guard.

While its not even close to dire straits for Google yet, the Gen-Z shift away from search is clearly a red flag and a sign that there's an entirely new trend that has caught Google off guard. Luckily they have YouTube, otherwise I'd be way more bearish on Google's future. Text-based search isn't going to grow by leaps and bounds, at least not in developed markets.

Google seems fairly diversified compared to many large companies. At least if you separate Search, YouTube, and other web properties from AdWords. Android and Chromebook is largely self sufficient via the play store, it’s really just Chrome that’s designed to support the rest of the business.

https://fourweekmba.com/google-subsidiaries/

None of them really make any money. At least not anywhere close to the scale that could justify a $2T valuation.

It’s 1.4T with a 20.5 P/E ratio and 0.12T in just cash in hand. Considering their past growth curve that really looks undervalued. https://www.statista.com/statistics/266206/googles-annual-gl...

Anyway take away any single element and it’s still a 1T dollar company, it’s not like search needs Ad Words they could use a different advertising network.

Gen-Z doesn't use search is a weird argument to me. They are teenagers. Of course they won't do anything useful online. Their behavior should change once they enter adulthood.

They'll need plumbers too and no they won't hire them through TikTok.

I hypothesize that Google's Ad business is much less prone to fluctuation than Snap's as well as Meta's. With Google's ads targeted so heavily towards search and remarketing, there is significantly more purchase intent baked into the audience compared to social ads. It's also able to have more diversity since Facebook and Instagram are a lot more similar than Google Search and YouTube are. There's so much D2C on social and those types of businesses have really rode the COVID economy rollercoaster.

Would you agree that you and I are "aware" of growth projects Apple is working on, but not necessarily aware of what growth projects Google is working on?

As soon as they can quantify remote work as a metric that they can make personal decisions on.

I'm sorry, I don't understand, can you expand?

Snap and Meta are getting their lunch eaten by TikTok. Google Apple Amazon are fine.

Google still is an ads company. It’s not as well diversified as apple (hardware, services, ads) and amazon (cloud, retail, consumer electronics, logistics, healthcare,…etc)

iPhone hardware sales account for 50% of Apple's revenue, and that number goes up significantly when you allocate revenue from Apple Care, services, ads, App Store and more that are directly driven by iPhone. The entire company is reliant on that one device, so not quite as diversified as people think.

True. I think it's also fair to say it's more of an ecosystem than a single product. The switching costs to another similar ecosystem are high.

It's better to say Apple is becoming less reliant on selling every iPhone user a new iPhone every year.

Apple can deploy several levers to increase non-iPhone revenue which they haven't yet.

First party games. Ads. Increase first party paid app costs (final cut pro goes back to being a pro service). Developer services. All on the mac side. They also have cloud infrastructure they haven't focused on yet, but can potentially be a major source of revenue with the right hires and focus.

Is Google trying to be anything other than an ads company?

If so, what? I know they are famous for spinning up projects and killing them super quickly.

If not, what are they doing? They have 140k+ employees worldwide. Is that what is needed to maintain their core ad business without focusing on growth of any kind (ad related or not)? If not... how many engineers/managers/whatever positions could they afford to "layoff" if we were to see US recessionary pressures/consumer spending pullback?

Google is putting a lot of resources into enterprise productivity software with gsuite. Google's strategy there largely revolves around letting students use the software for free and giving away chromebooks to school districts so that ten years from now every college graduate will be more comfortable with gsuite than microsoft office, so a bit of a long game there. This is basically microsoft's entire business, so there's definitely a huge market there. They also have GCP which is chugging along I guess.

To some extent, that was Microsoft's strategy in the 90s and 00s.

They sure missed boat with Teams / Slack.

MS also famously has lots and lots of pretty decent re-sellers all around the world, which re-sellers have their own very deep lists of business contacts.

Afaik Google has tried to get something out of the enterprise space for a good 5 years now (I'd say), ever since they launched GCP, but it's just not in their DNA to do and especially to maintain business sales.

What enterprise would want to buy products from a company infamously known to cancel products left and right?

Google has tried at least since 2002. So it's been 20 years. https://en.wikipedia.org/wiki/Google_Search_Appliance

The Google Search Appliance was a respectable business in of itself. They deprecated it as it wasn't large enough for "Google". It would have been in the ranks of peer unicorn startups given the revenue prior to being killed off.

It was also a business for which the writing was very clearly on the wall. How many companies are left that still sell a SaaS/PaaS that requires you to install bespoke on-prem server hardware? I'm guessing its a much smaller list than it was 2002. For crawling/indexing, I can't even imagine convincing IT we need a dedicated appliance today! For the problem GSA solved, its just not needed anymore and subsumed by other google products/services that don't need me to install a rack-device like:

https://workspace.google.com/products/cloud-search/

As someone else has pointed out, GSuite has seen success in the enterprise space, so their enterprise efforts aren't a total write-off. With so many students now on GSuite at their school or colleges and a generation effectively raised on Google Docs... I certainly wouldn't bet against it today.

I can imagine on prem hw being a benefit if a company didn't want a 3rd party to index material. But yeah, I wouldn't want to manage an on-prem setup unless it was necessary.

GSuite (now Google Workspace) is actually chugging along nicely and continuously improved. I bet it becomes one of their reliable long term products.

I also see decent Google Workspace resellers.

1/3 of Microsoft's revenues and operating income come from their cloud business, which has done much better than Google's.

Azure has largely been propelled by microsoft's strong business relationships. I think it's likely that google sees gsuite and GCP as synergies given how successful msft has been at parlaying their office contracts into azure signups.

You assume that Google has any competencies in dealing with the enterprise or anything that requires high-touch.

And then they hired an Oracle veteran to head GCP. What could possibly go wrong?

https://www.crn.com/news/cloud/google-cloud-ceo-thomas-kuria...

Oracle is probably the most competent enterprise software sales organization other than microsoft, seems like that's a pretty reasonable decision if they focus on building out the sales team. And Google probably realizes enterprise sales is a huge problem for them which is why they're investing in these products to make it easier to grow the organization. Selling to enterprises is something Google needs to get good at if they want to grow long term, having strong products to sell helps attract talent and close sales which gives their team experience.

I have never in 25 years - most of that in the enterprise - has dealt with Oracle enterprise sales and came out feeling good about it.

The measure of success here isn't how good you feel. It's the amount of money they make relative to the quality of their product. Feels indisputable to me that oracle is at the top of the charts with respect to that ratio in enterprise software.

Companies are doing their best to get away from Oracle. I don’t see too many IT people who have been so scarred by MS like they have with Oracle.

That's because their software sucks and their sales team was amazing. Their software always sucked so the reason why companies are on Oracle to begin with is in large part due to very effective sales.

Another justification people give for Google staffing levels is keeping talent locked up/not competing with Google. To the extent that's the case, thinking wouldn't be along the lines of "could we get by with fewer workers?"

Google also makes the most popular mobile OS in the world, the most popular web browser in the world, runs a major cloud provider, runs an app store, and provides services in hundreds of countries which requires a large amount of employees to do all the legal, compliance, localization, and support work.

The most popular mobile OS in the world that according to evidence that came out in the Oracle trial, only made Google $27 billion in profit from inception until then.

For reference, Google pays Apple a reported $14 billion a year to be the default search engine on Apple devices. It’s highly likely that Apple makes more from Google in mobile than Google makes from Android.

Chrome is just another gateway to advertising.

Google’s Play store game revenue is $48 billion a year. But if they count revenue like Apple does, they are counting the gross amount people pay net after they give developers their cut is 30% of that excluding other expenses.

https://www.businessofapps.com/data/app-revenues/

Those things are why Google has a lot of employees. It doesn't mean they are successful business ideas.

>the most popular mobile OS in the world

... which is free for consumers, and also for manufacturers to license ...

>the most popular web browser in the world

... which is free ...

>runs a major cloud provider

... which is unprofitable ...

Android Open Source Project may be free but check out any Android phone sold in the west at least and it will be loaded with closed source Google software.

What about the google play store? Don’t they get x% of every in-app purchase?

That is a good business. But the point is still pretty clear that Google seems to make very large investments into products that are then given away for free to many/most users (Search, Chrome, Gmail, the whole Google Workspace product suite, YouTube) with the no obvious business plan other than to drive ad revenue, sometimes in ways as indirect as just having people spend more time on the Internet.

Google Cloud by now brings in almost as much as YouTube ads.[1] Notably up 39.4% year-on-year for 6 months ending 2022-06-30.

Google Advertising is up "only" 15% the same period.

Assuming consistent growth rate (big BIG assumption, but Google has not reported a broken out Cloud revenue forever) then Google Cloud revenue will exceed their ads revenue in ~11 years.

And I believe that the market is there for the trend to continue, even if AWS and Azure continue taking most of the pie. In fact it's possible that ads revenue could decrease.

[1] https://abc.xyz/investor/static/pdf/20220726_alphabet_10Q.pd..., page 11.

Google is in all of those areas as well, they're just minor plays.

Last quarter, ~10% of Google's revenue came from non-advertising Services and ~7% came from Google Cloud. The ~82% that comes from ads is split between Search, YouTube, and the Network.

Amazon by comparison is 83% dependent on Amazon retail. Cloud fills the remaining 17%. They're not any better diversified, by revenue.

I don't think you can look at Amazon's "dependency" on revenue through that simplistic of a lens. AWS is purported to be much more profitable than their retail operations.

What are the margins on Amazon's retail revenue after all logistics costs versus the margins on Google's advertising?

I'm going to take a guess and say retail probably breaks even (almost by design by Amazon but not sure if it'll ever be more than a 10-20% margin business because by design they are offering traditionally expensive services like fast shipping, very lenient returns at very low cost/price to the end user) whereas advertising is probably... 80% margin?

I know there are server costs, engineers to maintain them, but if Google stopped investing in growth as far as diversifying/expanding advertising services goes engineer/developer/management wise... how lean could they run?

Could they support Google's current ad offerings with a core team of... 1000 engineers? 500? 200?

Amazon doesn't want to show profit in retail. It instead re-invents much of the profit into their logistics and technology. Buying all those 747s for prime air these past few years wasn't cheap. Amazon go wasn't cheap. Alexa sure ain't cheap. That all comes out of the margin of retail.

Amazon retail isn't just getting revenue from e-commerce sales. There's multiple diversified business units part of that division. For example people pay for amazon logistics, amazon warehousing, etc.

This completely misses the importance of the cloud to Amazon.

AWS profit margin is around 30% whereas retail is probably hovering in the low to high single digits (5-8%). AWS makes profit for Amazon, and retail offers free cash flow to Amazon. Both are important and to say Amazon isn’t diversified due to revenue is simplistic.

Just yesterday I got contacted by a Google recruiter through LinkedIn asking me whether I was "interested in discussing our current remote opportunities!" .

Given the infamous Google 5-7 stages interview process I promptly rejected the offer. IMHO It's just not worth it for an employed person to go through that hell...

I applied at google the last time I looked for a job (dec2020-jan 2021). The 5-7 stages interview process isn't even the worst thing about it. Unless you disagree in principle, it's basically a day's worth of time.

After confirming that the hiring committee had said yes, and a level, the recruiter found some teams that were atrocious (either they were looking for a completely different skillset, or so far out from my stated preferences). We then did a 2nd round of interviews and did a level jump (mid Feb-2021), and found a team in mid-March. After okay-s from both sides, it took them till mid-April to come up with an offer.

My entire h1 transfer for the company I chose took less than how long google took for the last step.

The top-end players operate way outside the norms for mid-market (as in, the "trimodal" software developer comp graph). Among the 8 or so software job offers I've accepted in my career, I don't think I've ever had one take more than 7 calendar days from initial contact to an offer.

I do see some paying mid-market rates and taking a month or more for their process. I bet they believe it's very hard to find software developers.

I had a thought around those lines. I am sure Peter Norvig didn't have to go through 7 asinine whiteboard coding questions to get hired into Google.

Now, I am way way way far away from being Peter Norving, but in my 15 years career, I have found companies that value my experience enough so that they treat me well during the hiring process. In my last 3 jobs (10 years) I didn't even have to do "interviews" for the places I got into. I have been spoiled...

I won't really trash on google here, the recruiter gave me a _lot_ of useful tips/tricks that were generally helpful. But what made me sort of resentful was that the offer was (IMO) quite weak.

> Among the 8 or so software job offers I've accepted in my career, I don't think I've ever had one take more than 7 calendar days from initial contact to an offer.

same for me, it's usually <10 days from onsite->offer, then about 2months for h1 transfer and notice at current job.

Amazon's gonna bleed the quarter after they introduce ads.

Amazon already has ads.

Amazon is massive in ads. I believe they are 3rd now. Even ahead of Microsoft+LinkedIn

According to the Amazon recruiter that reached out to me for Amazon Ads, their growth has been significant and they're now one of the largest sources of income for Amazon at $30B+ a year in income.

All the Amazon devices are likely whats being targeted for Ads. Kindles, Amazon Prime, Audible, alexa, firestick, and now that Prime has access to Thursday night football they'll get some of that ad revenue too.

TLDR: Amazon is going big on advertising.

Also notice when you search anything in the store you always get a bunch of Sponsored results at the top. This is almost exactly like AdWords for search

Amazon was hurt deeply by TikTok. TikTok pushed Shein which is now the top shopping app. shein is direct from china sales and is now insanely popular for cheap fashionable clothes. TikTok is eating many.

https://techcrunch.com/2021/05/18/shein-overtakes-amazon/

Also I read that Tiktok e-commerce is now home to brands that were delisted from Amazon.

So aliexpress garbage? Wow they must be scared

It's interesting but App store ranking for shopping app isn't good metrics.

Anecdotally as the target demographic of short video, i'm starting to have friends send around the occasional insta reel not just tiktoks. I think they're making up some ground.

TikTok had $4.6 billion revenue in 2021, Meta had $117 billion. TikTok has stolen some fries but Meta still has a huge juicy steak.

Based on the increase in daily recruiting attempts I receive from those companies, I would guess that they are not looking to trim fat.

I can't predict the future, but there is one big difference between Snap and the FAANG companies. Snap hasn't been profitable for the last 5 years.

I wonder how much fat is being debated to be trimmed at GOOG/AAPL

I bet Apple is going to let the mini-revolt over the return to office policy naturally thin its herd.

Google were around in the Great Recession of 2009 so you can look there to see how they may react to a slowdown/recession. I recall at the time there were reports of something like 200 job cuts at each, <1% of their workforces at the time.

I think both will have hiring slowdowns/freezes and of course Google will continue to shutter loved projects, but I'll be surprised if we see any significant (>1%) job cuts from either.

Sorry to hear this; It is tough to lose jobs when there is a fear of recession. I hope everyone will land on their feet. The package seems to be generous, I am glad that Snap is considerate to people on visas.

According to the historically accepted definition the US is already in a recession.

I appreciate the condolences. I have no idea if I'm affected or not, but I don't expect to be since I work in payments. I'm waiting to see who will be affected and how I can help them.

edit: I've received notification that I'm not affected by the layoffs. Part of me thinks having 4 months full compensation would've been nice to have. Part of me is glad to not need to do the interview process again (at least not immediately).

Do you know if the PlayCanvas game engine will be affected?

No idea. That's not my area of expertise/work. Sorry about that.

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