This is the part that really needs explanation. How was every CEO of every major tech company wrong?
Why aren't we having a big tech CEO layoff for massive wrongness?
It certainly feels like there's a lot of groupthink here in any case.
The Google severance looks pretty generous? That plus the last couple years of overhiring is going to end up being pretty costly for the company. These were expensive mistakes.
https://fortune.com/2022/03/31/us-companies-record-profits-2....
Everyone saw an opportunity to make MORE money during the pandemic, and instead of focusing on long term health, focused on quarterly profits. This lead to massive expansion.
The second answer is that these companies have mass layoffs every year. Are these really that abnormal, given the context of their mass hiring's the year before? Facebooks headcount went absolutely bonkers, they are still up over a two year period.
I think saying they were wrong is a mistake. It was more of a hedge on a bet, a bet they could afford to lose, but not afford to miss taking. It was akin to a game of chicken or mutually assured destruction, where if somebody else was expanding, you had to as well, defensively.
Now if they all balloon back up to the same headcount in the next year, but with lower salaries, then we will see if the real motive was to lower salaries. Someone had posted on another thread that the federal reserve stated that the goal of recent policy changes was to lower salaries. It's much easier to layoff and rehire, than it is to give out paycuts.
Maybe they thought it was only 5% likely, but still worth the risk and expenditure
There just aren't systems in place to evaluate CEO performance with anything remotely resembling objectivity. The job has become a way for rich people (on boards) to give their rich friends and colleagues another way to get richer and exercise unwarranted power.
Like, it's reasonable for unprofitable companies to do layoffs. I can see investor pressure causing something similar in large public companies like Google and Amazon, even if they're profitable. But profitable private companies should be snapping up all the best talent now.
Even if you "knew" a recession was coming and that you were overhiring/overspending, you get far less flak overall for riding the gravy train to the end, then making cuts along with everyone else, than for appearing to be overly conservative and not growing as fast as you could during the boom.
Taking the money and spending it while you can is the equivalent of buying IBM. No one else in your circle will fault you for it when things go south, because they all did the same.
Bet on permanent growth - growth is permanent: You're a hero - growth is temporary: Sucks, but you just do some layoffs
Bet on temporary growth - growth is permanent: You're fired - growth is temporary: You're righ! But so what?
> Imagine if you bet against it being permanent, and you were wrong? Your company just lost out on a massive opportunity- a CEO that does that would be worried for their job. And if you bet for it being all permanent and are wrong, well, you just have to lay off a few people.
CEOs answer to shareholders, not employees. From the shareholders' perspective, the risk of losing out on market share was much greater than the risk of having to pay a few months' severance for the 5-10% of the workforce you trimmed.
The only job of the board of directors is to decide when to fire the CEO. (Waiting for Tesla's board to do their job..., but I digress)
Sure, capital is represented on the board, but what about labor? No representation, so a round of layoffs is not going to be a reason for this to happen.