Or better yet, step down and let someone else run the show
Italicized emphasis mine. Time and again we've seen that this isn't the case, to the point where I won't bother holding my breathe to see if the CEO is impacted financially down the line. I'd rather start seeing CEOs highlight the fallout they themselves will receive in these layoff announcements themselves.
If a company decides to reduce my compensation mid way, I will be freaking flipped.
In this case, they could reduce the CEO's salary, but then it would go into the situation whether twilio would be better with a new CEO given the current CEO's performance in the past 10y. The answer would be a huge no.
Money is in charge. There is no moral element to how humans currently run business.
Why pay someone expensive a salary to not work if the company is facing issues with money already? Like i get the idea of severance, and would want it as an individual, but it seems like it just bleeds extra resources.
It's better to just rip that bandaid off and let people move on with their lives. 12 weeks severance is (hopefully) enough time that the former employee can find new work, and also that the company can start adjusting to the down sizing.
A non-productive worker is probably worse than no worker at all.
There's no "probably" to it. Offering a fired employee the right to stay around until their time is up is a mindbogglingly stupid idea. It's a recipe for massive negativity from them & for your existing teams.
Having participated in a RIF before, the two most common questions are 1) "why me?" and 2) "why my friend and not someone else?" Keeping someone who you've clearly said has no future around & asking them to contribute to the future of a company is ... what?
Completely bonkers if you ask me.
And that's ignoring the chance that one of your employees isn't too happy at losing their job and decides to make your company a bit uglier in the process.
It destroys morale. Yes, even more than the layoffs alone. Imagine working alongside people who know, in advance, their days are numbered. Motivation to accomplish work goes out the window, progress slows, and the internal culture will feel like a zombie during that transition and it will probably linger well after those people are gone as that culture infects other members who weren't let go. It's better to just rip the bandaid, take the financial hit, and attempt to salvage whatever remains of the culture.
During the early phase of a company the goal is growth. Hire. Scale. Build. Win the land grab at all costs.
Years later when growth has slowed it becomes important to transition to operational efficiency. For many startups that means lowering headcount some just from attrition, but right now it seems layoffs is in style to accelerate the transition.
Regardless, investors pushed the CEO to grow fast. Under the current model it isn't fair to punish the CEO for executing on their mandate. I acknowledge it isn't fair to the employees either. Just offering a different perspective.
A more conservative approach would leave the potential employee unemployed and inexperienced.
I mean if we believe googles top line result, the ceo got $14 million in total comp, of which ~150k was salary, and 7 million was direct stock. So let’s say they cut it all completely. 11% of their workforce is ~865 people. Estimating 130k for an average developer salary, so call it 160k fully loaded. Stop paying the CEO direct cash or cash equivalent completely and use it to pay salaries of people being laid off and you can save 44 jobs assuming your CEO will only work for stock options from now on. That turns this from an 11% cut to a 10.5% cut.
That might matter quite a bit to those 44 people, but the rest are still in the same place they are today, except maybe they feel a little better because the CEO doesn’t get paid for a little while, or at least until he moves on and the company hires a new ceo with real money again.
More important than symbolic flogging of the C-suite would be what the severance package looks like.
All the gains in wages since like 1980 has gone to people with subordinates. All. Leaf node employees have gotten nothing, cuts in fact.
Because then there wouldn't be inflation rate rises depression ever. Executives couldn't pass the raises to leaf node employees on directly to the leaf node employees, they'd have to look at their own shit and say, OK I can travel a bit less.
Alpha primate thing. Never get less. Ratchet. Same goes for doctors.
To me, this is him being clear that the decisions that led to this situation are on him, and not the employees. That’s a very clear statement, one that I would consider quite meaningful.
Compare that with, say, CEOs who take pay cuts during downturns: https://www.google.com/search?q=ceo+takes+a+pay+cut+-price+-...
Between the two sorts of CEO, it seems pretty clear that one is more serious about taking responsibility for their mistakes.
So what does taking responsibility here really means?
Only if they are part of a sick organisation.
In a healthy one, if the fault was that employees, and it’s a first offence, they’d be responsible for rectifying the issue they caused.
I rather they just not mention anything about who is responsible for over-hiring/bad decisions than trying to act noble without any real consequences.
Yes sometimes someone new would be beneficial, other times not. You don’t need someone new coming in and further disrupting a fragile situation.
the alternative hiring model is the reluctant hiring model, such as in some of Europe, where they hire out of last resort and would rather not give someone a leg up on experience while the going's good because firing people is fraught. Both options have pros and cons, but I prefer the more flexible model.