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Comment by jedberg | Hacker News Reader

From the point of view of a CEO of a public company, no post-mortem is necessary because nothing went wrong.

Hiring during a soaring economy and then letting people go as the economy cools is just standard operating procedure. Grow when money is cheap, stabilize when it's not. If you don't do that, then you'll get out-competed by the companies that are doing that.

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To me the strategy has seemed so backwards the last few years.

You are the CEO of a giant tech company, and your goal is to achieve maximum well-being of the company in, say, 3 years time. You are confident you can weather the short term ups and downs. You could:

1. Follow trends. Go on a hiring frenzy at the same time as everyone else. You have to compete with absurd compensation packages because everybody already has a job or is getting multiple offers.

2. Buck the trend. Hire when others are in the middle of layoffs. Show strength when others are making their sheepish apologies. Pay discounted labour prices for top talent.

To me choice #2 is a no-brainer but obviously nobody will ever put me in a position to decide, and it's easy to be an arm-chair CEO. Is it really that these companies are so short-sighted, and are more worried about next quarter than next year? Could nobody see the interest rate hikes coming? I just can't imagine how executives/boards would overlook the impact on stock price if a company was publicly known to use foresight in their hiring practices. What if the headline was something like "Google hiring continues at same rate during recession," doesn't that send a strong signal to investors?

You can't necessarily survive #2 if it causes the talent you actually need the most to bail in high times. You can play this game at the margin by starting to freeze hiring before everyone else does, so that you can be there earlier to hire again at discounted rates in the downturn

Management doesn't like scaring their workers and wait for recessions to fire low performers all at once. Hiring someone else's scraps isn't the best strategy, and digging for the diamonds in the dirt is very expensive.

    Management doesn't like scaring their workers and wait for
    recessions to fire low performers all at once. Hiring someone
    else's scraps isn't the best strategy, and digging for the
    diamonds in the dirt is very expensive.

Can we please dispense with this notion that layoffs target "low performers"? There is zero evidence across any of the current round of layoffs that low performers were systematically targeted. There was zero evidence of this in 2008. There was zero evidence of this in 2001. Mass layoffs hit in a number of ways and "performance" is just one of the criteria used to determine who gets the axe. It might not even be the primary one --- there are plenty of stories, even in this specific layoff, of people who were just promoted and are now being let go.

From the perspective of the individual worker, it's far better to model layoffs as a random lottery. Telling yourself, "Oh, I'll work hard, I'll get good performance reviews, that'll save me from the layoff monster," is just cope. Good people get laid off. Bad people get laid off. Mediocre people get laid off. It's just luck.

> and your goal is to achieve maximum well-being of the company in, say, 3 years time

Your fiduciary duty is to maximize shareholder profit. Not sure where you got the "well-being" from, but your premise is utterly wrong so your presented choices and how you deal with them are not connected to reality.

There is no fiducary duty to maximise shareholder profit. It doesn't exist, it's basically made up. (There is a duty not to intentionally screw over shareholders, but that's far narrower.) In particular, most US corporations are incorporated in Delaware which has something called the business judgement rule, where so long as executives have reasonable belief that their actions are in the best interests of the business they're protected.

> fiduciary duty is to maximize shareholder profit

This keeps coming up and is kind of true, but not really.

To quote the U.S. Supreme Court opinion in the Hobby Lobby case: “Modern corporate law does not require for-profit corporations to pursue profit at the expense of everything else, and many do not.”

https://caselaw.findlaw.com/us-supreme-court/13-354.html

> Hiring during a soaring economy and then letting people go as the economy cools is just standard operating procedure.

If that was true, it would be a last in first out layoff, which is not the case. From what I gather it doesn't even match with the performance ratings (i.e not straight out the bottom 6% of the "stack")

This is both a wage depression maneuver, and a meager 4$ bump in stock price. I'd bet my money it is a hail mary to prevent the CEO being outed in a few quarters.

> If that was true, it would be a last in first out layoff, which is not the case.

That doesn't follow. What you hire for at one time because you think it's profitable to do so is not necessarily related to who you let go at a later time because you think it's profitable to do so. Market conditions and other factors have changed in the mean time.

> From what I gather it doesn't even match with the performance ratings (i.e not straight out the bottom 6% of the "stack")

And it shouldn't. Who it makes sense to let go of has a number of factors, not just performance. Even software developers are not a homogeneous resource, and ROI on an employee is not just about performance.

> What you hire for at one time because you think it's profitable to do so is not necessarily related to who you let go at a later time because you think it's profitable to do so

Software engineers are one of the most fungible knowledge workers around, save for transition costs.

> ROI on an employee is not just about performance.

Why is it called performance then?

Sure, but Google always billed themselves as a non-traditional company, and prided themselves on social responsibility. That helped in hiring as they became one of the most desirable companies to work for, even when their salaries were outstripped by their peers (e.g. Facebook).

There will be long term effects on their hiring based on this moving further showing they are becoming just another traditional company. What's to differentiate them from IBM or Microsoft now?

They stopped that a while ago, they are just another company now.

I'd kind of disagree with this sentiment. Sure, that works for Ford at the assembly line, but you have to get tech companies a little bit more credit. They don't scale with the number of heads if they are doing it right ;-)

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