PagerDuty to Lay Off 7% of Staff; Revenue Officer to Exit
marketwatch.com
marketwatch.com
This pattern of laying people off for short term gains is for the birds. It affects the entire industry when patterns like this become normalized. If you wonder why engineers don't stay around more than three years or have perceivably less loyalty, remember these events.
This assumes you can identify bad workers (for some metric of bad which may or may not be ethical or sensible)
Good: P(good)=p Bad: P(bad)=(1-p)
Have a bad employee detector
P(detected as bad|bad)=q1
P(detected as good|bad)=1-q1
P(detected as good|good)=q2
P(detected as bad|good)=1-q2
Fraction of employees detected as good:
pq2+(1-p)(1-q1)
Fraction of employees detected as bad (and therefore fired)
p(1-q2)+(1-p)q1
Suppose you pay a discount on ability to hire new good employees as d (so probability to hire a new good employee is dp instead of p)
So you benefit as long as
p(1-q2)/((1-p)q1)<dp/(1-dp)
Or
(1-q2)/q1 < d (1-p)/(1-dp)
Plugging in p=.8, d=.5, q1=q2=q (knowing good and bad is equally hard)
(1-q)/q < .167
Break even is then
q = 1/1.167=.857
So if you start with 80/20 distribution and after a while improve your discrimination to 86/14 then firing benefits you even if you are hiring from a 40/60 pool.
This not only assumes that you can identify bad workers, but that you can also identify some percent of "good workers that other companies identified as bad workers".
Shameless profit taking by executives and shareholders seems a lot more likely. Google and Microsoft providing PR cover for smaller companies to do it under the radar.
Should someone laid off as a developer simply accept they can't cut it, leave the industry, and find a job as a barista where at least they can earn some tips?
You make a lot of assumptions about what devs are being laid off in the first place. And about the absolute quality of a developer.
One company's garbage developer is another company's 10x.
If they are firing people for performance reasons during their normal performance review cycle, it's not really a layoff.
It's clear by now that these layoffs aren't targeting low performers. They're not targeting any individual. They are an accounting exercise with selection based on meeting a formula. The suggestion in some quarters is that there's a kind of collective hysteria driving the layoffs amongst tech companies. Incorrect. The one thing all these companies have in common is that they all have the same pool of institutional shareholder.
The layoffs are not about saving money, they are about being seen to save money.
The institutional shareholders have demanded this be done, and the boards have complied. The big layoffs - Google, Amazon, MS, etc - are largely pointless and don't make any meaningful savings. And let's not do the "thinning of the herd" bullshit, please.
Why have the institutional investors demanded this? 1) because they've become accustomed to make obscene amounts of money and want to continue making obscene amounts of money even when things are slowing down, and they (wrongly) believe laying people off is the way to do this 2) because they can. They hold the real power.
Apple have largely avoided doing layoffs because his 40% paycut has soothed the baying suits, and Tim Cook is in a powerful position anyway. Most other CEOs, not so much...
Looking forward to more competition in this space, PD is not as cheap as it should be.
Those are the big 2 in the space, who else is there?
My only complaint was remembering it was /log and /logs would 404 - so I just made my own redirect rule for it haha.
Something like AWS Pager would make a lot of sense to me...but I could also imagine it being like AWS CodeCommit or CodeDeploy, a weird and inferior service you only use when your boss' boss decided to be really cheap 3 years ago.
It's expensive and hard to use. Lot of opportunity to someone to come in on the "pagerduty but simple" train and start taking market share away.
So no R&D, which is who would know the intimate details?
Pager duty is not profitable.
I cant imagine anyone would hire people with the intention of laying them off, so I can't agree with that conclusion.
I'd guess they hired with the intention of growing the company and for a myriad of reasons that didn't happen. Expansion and contraction are normal cycles in a company.
How do you even suggest a company tells employees of "the risk they are taking"? No job is guaranteed, risk is inherit no matter the company. They've been public since 2019, anyone can look at their financials and decide for themselves.
If someone was hired in 2019 and laid off today, was that "unethical"? What about 2015? This isn't about empathy for CEOs and execs, the business will attempt to sustain itself and there are harsh realities that come along with that.
Some groups in companies which require forced ranking and culling slyly do this.
So, it's bullshit reason given by an entitled generation. Basically they want High Salary, High Benefits, Psychological Safety, Activism Time using company resources, Always support progressive causes.
None of them care about growth or understand basic capitalistic structures (ROI, ROE) or have managed a profitable division in their life.
Maybe they rightly don't care about those things when they see what blindly optimizing for ROI and other "capitalistic values" does to the rest of the society they live in.
Thank you for all your hard work and execution - please be sure to pick up your pink slip on the way out the door.
https://www.pagerduty.com/blog/pagerdutys-people-first-appro...
(Dutonians is cheeky, but a reasonable standin for stodgy 'PagerDuty Employees')
Few things embody better the "entries in a spreadsheet" concept than laying off people to adjust a finance balance.
They are not a charity, sure, but "People first" is still bullshitting people.
1. Employment is purely transactional. Time is exchanged for money and money-equivalents. Full stop.
2. Your work is an act of self-expression. You derive meaning from your work, take pride in it, and feel a sense of ownership and responsibility in it. The work and its output bears the indelible mark of the mind and hands that crafted it. To try to separate the self from the fruit its hands bore is not only futile, but an act of alienation of human nature.
(I don't know if I'm a Marxist yet, but everything he wrote about alienation makes a lot of sense to me.)
(And I'm not saying 1 and 2 are the only 2 positions to take - I'm just saying they're the two opposing distilled ideas that are butting heads.)
Combine these with the fact that (in the US):
- you have ~no protections against being dismissed.
- there is a tremendous power imbalance between the company (which is a fictitious entity composed of many sub-units, and can just be dissolved or restructured etc) and the employee (which is O(1) human organisms and prone to starvation)
- employment isn't just the simple money and money-equivalents outlined in 1). It's access to affordable, competent healthcare. If I go without health insurance, I do not simply exchange some amortized payment plan for paying per-service. I incur a huge amount of risk if anything major happens to me or my family.
- etc
it's just a recipe for disaster and nobody being happy. We're left in this quagmire of everyone wanting to eat their cake and have it too.
Personally, I think we should create a strong social safety net at the government/societal level (guaranteed income/guaranteed basics, healthcare, education, etc) and then make employment the sellsword's dream that companies seem to want it to be (they seem to enjoy being able to fire at-will more than they enjoy employees acting like family, afaict).
Japan seems to have tried out the other extreme (where the company becomes a quasi-government and acts like your paternal-feudal lord) and is now having some problems with it.
Just my analysis and 2c though.
You get the good with the bad. It's easier to get hired if it's easy to get fired.
I'd buy your point about power imbalance if it was about blue collar workers. But not for IT, where jobs are plentiful and compensation is through the roof.
Why not start a coop with likeminded folks and give yourselves the protection from being laid off?
"My employer laid me off" doesn't and adds on the implications of a lay off in your field of work, so you get to start your search after being unemployed and possibly in a field with many others looking for jobs.
If you want to work in a stable environment where you don't get fired and your promotions and raises are few and far between and planned years in advance, you go and find a job in some bureaucracy. If you want the benefits of fast-moving high-compensation private economy, it feels weird to complain that this also includes quick termination on occasion.
I’d love to find somewhere I could just spend the next 20 years, but that’s hard to find. There’s no job security no matter how good you are.
I don't see anything fictitious about it.
If your point is that a company is not a human, of course it isn't. Nothing but a human is a human.
But concretely what I mainly mean is, if a company "fails" (and while there's lots of different definitions of failing, let's here take the most extreme one, where the company runs out of money and just has to fold) then it's not like a person is dying. Debt will be restructured, employees can be laid off, it can be bought/assets sold off, and most notably the actual people who profit most off these companies are substantially protected since the incorporation protects their personal assets from liability. Their biggest threat is the loss of stock price they presumably own, and that's a risk profile they've very clearly accepted. So when a company "dies", it's typically not really death in nearly the same sense that we normally think of the word. And it's slow, with (typically) no one person being a big load-bearing point, and tons of options and exit strategies and protections for people's personal affairs.
This resiliency, flexibility, and non-corporealness means companies almost always have more power in negotiations.
Compared to a human of mortal flesh, who typically have somewhere between 0 and a few months of runway before cobra payments and lack of income start to strain spousal relationships, mortgage payments come in danger, etc. And the 1-2 breadwinners, either of whose income loss is an existential risk to the family, are single points of failure if you're laid off or fired. Are typically scrambling to lock in employment again.
If this is what most people are trying to say, I think the incorporeal language is much more direct and clear than calling them fictitious, which has other meanings
- Revenue was $94.2 million, an increase of 31.3% year over year.
- Delivered a third quarter dollar-based net retention rate of 123% as of October 31, 2022, compared to 124% in the year ago period.
- Achieved non-GAAP profitability a quarter ahead of previous guidance, expanding non-GAAP operating margin to 3% for the three months ended October 31, 2022, an improvement of 1,000 basis points over the year ago period.
My point isn't to say that employees are owed something. You are right, business is not charity. The problem is the lack of any consistent social contract. You can spend all of your time and energy executing at 110% and still be shown the door. At the end of the day, you are labor, not capital. And capital reigns supreme today. As a public company, PD has to make its shareholders happy at all costs. I'm not casting judgement on that, but no real assurance of loyalty in employment combined with no good social safety net (at least here in the USA) is a dangerous and often stressful mix. Add out-of-control inflation, increasing housing costs, and a tightening labor market to that to really ramp up the pressure on folks.
Also I understand they say to pursue other opportunities, but I think the reason for the CRO departure feels transparent enough here.
I think you can make a strong argument that they failed some sort of responsibility to the employee expectations by over hiring, but that is different.
Are boards and shareholders even dissatisfied with executives right now?
on the other hand, the alternative to "over hiring" is jobless people. At least they were job providers for some time.
That said, I think it is all beside my main question: Are shareholders unhappy with executive leadership. If I were an executive, I would be making the case (privately) that my over-hiring and subsequent layoffs were in fact GOOD for the company.
Not with prior actions, but they are with current margins. Which is why you see both layoffs and other cost-cutting measures that get less press.
If the idea is “exec heads should role out of solidarity/catharsis/whatever” then that’s a different question than “someone failed to prevent this from happening”. Apologies if I’m misunderstanding the root causes of these layoffs.
The real curse of PagerDuty, though, is calling everything "-duty". Parental leave is BabyDuty, the training department is LearningDuty, the LGBTQ ERG is RainbowDuty, you get the idea.
Hat-tip to our veterans ERG for not going with DutyDuty, although I hope it was in the running at least.
(I mean I also kind of love it, but you know, it's a lot.)
But I guess I have to echo what others are saying, it's eye-roll-worthy some of the demonyms these companies come up with. So lame.
The Dutonians join the Googlers, Xooglers, Nooglers, Metamates, Amazonians, Mozillians, Stripes, Tweeps, Peeps, Veeps, Elasticians, SoundHounders, Vimeans, Rackers, Krakenites, Latticians and Plaids.
Kinda doesn't really sound right for names like Meta I admit, but metamates is just cringe inducing
Which contains gems like "exceptionally talented, mission driven, innovative and kind Asanas" and "once an Asana, always an Asana" — considering some of the Sanskrit usages are equivalent to "chair" or "seated posture".
"You were good chairs, but you have to go. As they alway say, once a place where you put your ass, always a place where you put your ass."
> None of this would be possible without you, our leadership, and our board — thank you for your grit and resilience, your commitment to our customers and your support of our values and people. I am reminded in moments like this, of something Martin Luther King said, that “the ultimate measure of a [leader] is not where [they] stand in the moments of comfort and convenience, but where [they] stand in times of challenge and controversy.” PagerDuty is a leader that stands behind its customers, its values, and our vision — for an equitable world where we transform critical work so all teams can delight their customers and build trust.
“the ultimate measure of a [leader] is not where [they] stand in the moments of comfort and convenience, but where [they] stand in times of challenge and controversy.”
I don't think the challenges and controversies MLK was thinking of at the time had to due with cost-cutting measures by a corporate entity.
[1]: https://www.pagerduty.com/blog/improving-pagerdutys-operatio...
If you don't like being voluntold to record thank you messages to Georgia get-out-the-vote workers, whites-not-welcome Slack channels, and Slack bots telling you to not use "you guys" in every channel including private channels.. You won't like PagerDuty much.
With my VP Operations hat on, I can't justify the pricing
Wearing both hats at the same time, I built the solution my company needed inside a weekend and allocated funds elsewhere
And in a volatile macro, you may be loathe to drop talent you'll need again, so might as well have them roll something and maintain it versus outside spend. You can always migrate back to a SaaS vendor when the coffers/pipeline is more robust.
"We pay for the services we use so that if they break, the Managing Director can pick up the phone, yell at someone and something will happen. That doesn't work with Open Source."
If you pay for a support contract, you too can yell at someone to get something to happen. It's not related to open source but to whether you're paying money for the service.
I get that they must work very hard on building that perception because it's easily shattered, but still. It's hard to ignore how reliable it has been.
- PagerDuty is great when my budget is big and I need something ASAP - Buy vs Build.
- Home grown alternative is great when the word from Finance is the cost savings to build is now more important than the time it takes.
There are less expensive alternatives to PagerDuty that might have fit your budget, and wouldn't have put your engineering team on the hook for managing this custom built service forever.
I see this sentiment often, however it's one of the best ways to get profitable business ideas. I start making something, and if in the course of doing so, I find a problem that I can solve (which is not related to the primary product), I turn around and start selling my undifferentiated work as its own product.
The problem usually is, when the rest of your systems are down then this one is likely to be down as well, making it useless. People are paying PagerDuty primarily for their uptime and reliability.
Is that an exec taking responsibility? Respect, I guess.
To your point though, seems PDs revenue and other numbers are doing pretty darn good year-over-year..
Go big or go home eh?
> PagerDuty's Results Sparkle Amid Gloom in Enterprise Software
> For its fiscal second quarter, ended July 31, PagerDuty (ticker: PD) reported revenue of $90.3 million, up 33.6% from a year ago. That is ahead of both the company’s guidance range of $87 million to $89 million, and the Wall Street consensus call of $88 million.
> On an adjusted basis, the company lost 4 cents a share in the quarter, while management had forecast a loss of 8 to 9 cents a share. The consensus view on the Street was that the loss would be 8 cents. Under generally accepted accounting practices, the company lost 44 cents a share.
> For the January 2023 fiscal year, the company now sees revenue of $365 million to $370 million, with a loss of 10 to 12 cents a share. It earlier forecast revenue of $364 million to $369 million, with a loss of 17 to 21 cents a share.
And then they don't even communicate with one another.
At least for JIRA (and SAP), there is another aspect as well: users know how to use it, and it has a halfway decent UI when compared to stuff such as Bugzilla. Avoiding training existing and new employees in bespoke software is a business value on its own.
IME for most companies it only takes a homegrown system failing once during a major outage for the budget to open up.