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Comment by chippiewill | Hacker News Reader

Google don't have to worry about such activist shareholders in the same way that other companies do. Larry Page and Sergey Brin have the controlling share in Alphabet thanks to their Class B shares. They only have a fiduciary responsibility to the other shareholders.

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So does Zuckerberg. But while he and Page/Brin may have a controlling interest in _voting_ stock, they own a much smaller amount of overall shares. Sure, activists can't control the board, and Zuck/Page/Brin are not in danger of being ousted, their fiduciary duty is to the shareholders not just those with voting rights.

ok?

there's no fiduciary duty to do a dumb thing just because Amazon did the same dumb thing, and saying "we've got loads of cash, we're going to expand and hire the great people Amazon and Meta just stupidly let go and enhance shareholder value in the long term" is a perfectly cromulant thing to say.

Facebook, nor Google, is firing people because of activist investors. They're firing them because they just way over hired people recently, and they have way too many people for what they can adequately put to good use given their size now.

Feels like everyone wants to put a semi "conspiratorial" twist on these announcements when it's pretty obvious what the underlying driver is.

The underlying driver is also wage suppression. Why retain overpaid employees when you can collectively fire people and suppress the market wages? The added benefit would be that the rest would work twice as hard.

Well, look like they’re working twice as hard anyway.

> They're firing them because they just way over hired people recently, and they have way too many people for what they can adequately put to good use given their size now.

I'm not sure that's the case. They didn't hire just to have people twiddle their thumbs, but rather to engage on projects they believe may have some worth. But when the share price drops, investors/Wall Street/media start clamoring for "action", and an easy action is to trim those projects that may or may not work out and that aren't core. But it's not like Meta/Google/Msft are in danger of losing money any time soon -- they're still making $Bs in profit every quarter, but the expectations continue to rise as people buy the stock and expect it to keep going up.

You’re way overestimating the amount of clarity and thought in hiring plans during panic hiring like we had.

Management was overwhelmed and just spending money on anything plausible sounding (even if not really plausible) because they could.

Now there is an accounting happening, and the BS is being found out, and here we are.

Also, new hires have been extremely difficult to onboard (or figure out if they are stuck or not) with remote work, making many of these folks only clearly ‘problems’ a year or so later.

Classics

> You’re way overestimating the amount of clarity and thought in hiring plans during panic hiring like we had.

you may be right; I don't work at one of those companies or have any special insight into them

> Management was overwhelmed and just spending money on anything plausible sounding (even if not really plausible) because they could

This is the crux of it. At any company there are always more projects and ideas than there are people to work on them. Limits on hiring force the business to carefully choose what to work on. Not every pet project gets staffed/funded.

> Now there is an accounting happening, and the BS is being found out, and here we are.

I cannot wait to come back to this in 1 year.

I think tech is laying people off for the same reason activist investors are so active.

As interest rates increase, more investment money is leaving the stock market and entering the bond market. Companies have to sell their stock harder than ever before. This is part of their strategy to sell their stock to investors.

Fiduciary duty is more what you call guidelines than rules. It’s there to a) prevent blatant fraud; misguided/rash/anti-shareholder-sentiment decisions are not prosecutable, and b) give a board a reason to oust someone. The former requires a paper trail along the lines of “I’m liking my own pockets at the expense of other shareholders”, and as you said the latter is not a danger for them.

In fairness, neither did Meta. Zuckerberg has a similar dual class structure through which he can control the company.

Not directly, sure. But in this case the activist shareholders desires are aligned with what's best for the compensation of execs who are mostly paid in RSUs

Perhaps there is an large internal pressure from the employees themselves?

If many employees have a large amount of salary dependent on the stock price, then those employees will really care about GOOG falling in price on the market.

I lurk on all the generally open Google-internal fora, and I think I have only heard one person try to make this case. The vast majority of employees who say anything about this are opposed to layoffs to increase the stock price.

If there is internal pressure from everyday employees advocating to accomplish this, they are being extraordinarily quiet. Unlike basically every other cause for which employees try to pressure the company. Google is quite open internally to people saying we should change this or that. It's almost a past time.

So I think this explanation is very unlikely.

It's a serious problem for retention when people's total comp drops by a large amount, and some companies (e.g. Doordash) have given people extra stock to make up for it.

I've never seen anyone directly make this case. Most people seem to want their colleagues (many of whom are friends) to keep their jobs more than they want the stock price to go up.

Still there is pressure to bow to big money investors to continue having access to investment capital.

> Still there is pressure to bow to big money investors to continue having access to investment capital.

what "investment capital"? Facebook and Google aren't making up new stock to sell to banks or hedge funds or whatever.

actions like this are to keep the existing stock price up, which doesn't benefit the company directly at all, except indirectly by not pissing off employees with number-of-share-denominated stock grants and not having "wall street analysts" claim a company failed for not making it's numbers match the numbers the analysts made up and publicised before results came out.

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