Macroeconomic changes have made it impossible for me to want to pay you
mcsweeneys.net
mcsweeneys.net
Maybe I've hung around in the wrong circles too much recently, but this hit me hard. This is basically how the reasoning behind all top management decisions have been communicated to me in the past year:
"There is indeed a clearly better alternative course of action that we should take. You're right in that it would be trivial to adopt and we would all be happier from it, with more satisfied customers. The fact is that's not what we have chosen in reality, so we must shoulder the heavy burden of choosing the inferior alternative and give it our best shot."
Way to motivate a decision!
this reasoning is pure and simple and correct, you start from the top, not from the fact "they can afford it" because their job is not to spend the money they have their job is to increase value for investors.
Is their job to increase it in the short or the long term? These “I know we’ve been doing great for 3 years, but the past 3 months haven’t been so hot, so we’re going to cut jobs.” Messages seem incredibly shortsighted.
The whole system is wrong.
Only when things are going so terrible that the board is trying to get you replaced is when it becomes important.
If the board aims to replace you because of a bad quarter in a bad economy… find a different company to be CEO of I guess.
Is the vast majority working at these companies (with years of vesting, no?) so shortsighted? Especially the higher ups?
Is it a requirement at these companies that you have to be 10000% in debt and living paycheck-to-paycheck to be a SVP/VP/director/whatever so you have to be hyper-focused on that stock comp?
It's just ridiculous. (And note, I'm not saying it's not a factor, it might be, but it's just not the full picture.)
When excluding RSUs, FAANG jobs are not extreme in any way. RSUs are not a cherry on top but an important component of remuneration. Often for mid-level and above (roughly TL/staff engineer and Manager-II), the value of RSUs is more than 50% of total compensation.
and then there's stock on top.
Generally speaking, unless there is a fundamental change in outlook, selling based upon the latest earnings report is the hot money which attempts to chase the latest greatest and is moving on (and rarely tells you about their misses).
The challenge is that they dont have magic powers to see into the future. If a company income is falls this quarter without a compelling reason such as investment, this data indicates that the company will not do good next quarter.
The are tons of examples of company stock prices increasing due to a acquisition, despite a lower quarterly profit.
Why?
Incentivized by whom? This is choice they make. See the OP.
If you go on an investor call as the CEO and said, "hey we didn't make any profits this quarter because we invested it all into projects that will grow our revenue X% in the next quarter or half" you'll get fired by the board very quickly, or an activist fund will buy up shares and vote you out as quickly as they can.
A company that is cutting staff is creatively bankrupt and has clearly no idea where to spend effort in anything new.
I wouldn't invest in a company that is reducing headcount in this manner.
With 0% rates money is free and you can take forever to make a profit, nobody cares, just borrow more money if you run out.
With 5% rates money is expensive and you have say 2 years to make a profit or everyone loses their job and investors lose their funds.
This doesn’t really apply to massive companies like google or MS of course but it does to anyone smaller without a cash cushion (the majority). Now job cuts may or may not be the right decision but they are triggered by very real and urgent fears about plummeting earnings.
Cheap money has distorted the entire market and conditioned a generation of investors to expect unreasonable returns and to ignore the price, revenue, profit and loss.
We need to fire thousands of people.
Why?
Because it will make us more attractive for investors.
Why?
So they put their money in our company.
Why?
Because that will buoy our stock price, which is important.
Why?
Because it makes shareholders richer.
Oh.
Because that will buoy our stock price, which is important.
Why?
Because our stock price is also our operational funds.
How comes?
Because our actual funds are invested somewhere else.
Why?
Because it makes shareholder richer.
Oh.
or is it because a large portion of the global revenue is "parked" outside the US for tax reasons?
or due to stock buyback there are not much "funds" at all?
.. no it isn't? This is conflating "equity" with "free cash". Have a look at one of the balance sheets.
However, until now, it has been my understanding that the way any large company works is by using their stock value as collateral against short term investments from banks, which then serve as operational funds.
Am I wrong?
It looks like I cannot delete or amend my post, which is a shame.
You occasionally get debt-to-equity swaps in near-bankruptcy situations.
There was a certain amount of "borrow against funds held in Ireland to avoid US repatriation taxes" done by Apple, but that wasn't using stock as security, that was using cash of a different subsidiary.
Or was it assumed that those in the tech industry were a "protected" class of people for whom the rules do not apply?
Hell one of the best things about capitalism: everyone is equal before the dollar and everyone is expendable.
https://en.wikipedia.org/wiki/Triangle_Shirtwaist_Factory_fi...
You never see CEO’s take pay cuts, lose compensation, or executive teams get, “right sized.”
It’s always the workers who get the shaft first.
Given that a lot of this is driven by a hedge fund, isn’t this how IBM was gutted back in the day?
Why? Because market is booming and we need to make the most of it to increase our profits.
Why? Because it will make us more attractive for investors.
Why? So they put their money in our company.
Why? Because that will buoy our stock price, which is important.
Why? Because it makes shareholders richer.
Oh.
Investors know this. Investors would also question why there are layoffs in an apparently healthy company. All this means that CEOs don't want to do mass layoffs which even more strongly raises the question of why they did it to start with.
Who else uses the term "right-sizing" and considers how being laid off "provides an opportunity to build resilience"?
There exist large private companies; how do they behave differently? I could imagine it going either way, depending on the owners, employees, and all kinds of other factors.
The framing of ordinary workers getting the boot so fat cats can buy bigger yachts is seductive but I can just as easily frame it as:
Fixed income, middle America boomers entrusted these companies to be good stewards of their capital but it was instead spent on paying high six figure salaries to coastal city professionals from elite schools to do work of dubious value.
Social Security is pinned to inflation, so I don't understand why those living on Social Security payments might be in different circumstances now than 5 years ago.
"The labor economist Arindrajit Dube has estimated hourly wage changes — by decile rather than quartile — over a longer period, since the beginning of the pandemic recession. He finds that real wages for the bottom 40 percent of workers have actually increased".
[1] https://imgur.com/a/WCrJ40c [2] https://imgur.com/a/t1tQe4n
Edit: also interesting to point out that 2020-2022 has included things like direct-to-citizen stimulus checks, and large government investment in the form of the build back better package. If anything, it is a testament that direct aid to people struggling does more to improve their immediate situation than any other solution proposed by neoliberals and the GOP. If that is your argument, then I will agree with you, and say we should do more, like a UBI and increased taxes on the wealthy to start to undo decades of socioeconomic stratification.
I wasn't arguing for a particular point, but I do happen to advocate for basic income policies funded by progressive taxes.
> to about 2008
I must have overlooked that you were talking about a longer time period than the pandemic. Most people recently have been discussing the stimulus policies and correlated (not necessarily caused) inflation. There's been a trend of saying they were counter-productive for lower income households, which is not supported by FRED measurements.
From my original comment, my statement you took issue with was
> Instead, we see most wealth going to the richest of Americans, with the lions share of wealth created during the last 2 years of resurgent economic boom going to the top 1% of Americans
which is a very substantiated claim[1]. Your counter argument was that in the same time frame, the bottom 40% have seen real wage gains. My counter to that argument is that while it is true, it still doesn't reflect where most of the money is actually going, and is a disingenuous argument that makes the situations of the lower 50% seem better than it is. I never argued that stimulus policies were bad for lower-income households. Not sure what point you're trying to make to me.
[1] https://www.cnbc.com/2023/01/16/richest-1percent-amassed-alm...
I wanted to add nuance to the statement about most wealth going to the top. The last two years have also been great for (some groups of) poorer Americans. Real wages had been going down since the 1970s. Now, up (for some cohorts). Unemployment is down.
The world has detail.
If I had to make a point, I suppose it'd be that summaries can be misleading. But, I'm not interested in engaging in a debate of points and counter-points. There's no judge here, awarding victory and speaker points. I suppose upvotes are tracked, but we've moved off the front page. Not so much traffic to give us a sample.
Then I guess I have to agree with you, when discussing where wealth went during 2020, and the state of the lower 50% of Americans, it is misleading to only point out that the lower ~50% experienced wage growth without also pointing out that a majority share of overall wealth still went to the 1% and that the real gains have still not caught up with the terrible situation they've been in for years. As for the original point, the claim that the majority of wealth created since 2020 has gone to the 1% is not made any more nuanced by including that real wages have increased for the bottom 50%, as all it does is distract from the actual issues at hand.
On the contrary, noticing that real wages increased for the poorest 40% may motivate policies like a universal income / citizen dividend. Perhaps a higher steady state inflation is necessary, 4% instead of 2%, to keep unemployment low and real wages rising for the poorest.
Have you considered what happened to the wealthiest 1% as inflation fears led to increased interest rates? I'm guessing the nominal wealth declines affected the wealthiest most of all. I haven't seen measurements of that, yet, but I have seen some headlines about Musk and Adani.
Its an interesting argument but it has already been seen in America where neo-libs and the GOP have shifted most of the blame for inflation to the stimulus checks, so I doubt it.
> Perhaps a higher steady state inflation is necessary, 4% instead of 2%, to keep unemployment low and real wages rising for the poorest.
The only way I could see higher inflation leading to higher wages is worse material conditions leading to more workers fighting for higher wages. Unless there's some weird economics at play, I don't see any other reason why inflation would increase wages, and if that is the reason, I'm not going to support any platform that only works because it increases misery.
> Have you considered what happened to the wealthiest 1% as inflation fears led to increased interest rates?
Yes, they saw a small adjustment in net worth down 7% at the beginning of 2022, although that seems to have flattened out since then, and real wages have only increased since early 2021, when they fell ~1% in Q1 2021. I'm not sure what you'd do with this, because increasing interest rates reduces inflation, which works against your (since you don't like the word argument) idea that we should keep inflation higher.
However, there seems to be a relationship between inflation and unemployment. It's been cloudy, but the hypothesis is that low unemployment causes higher inflation. I further conjecture that sustained low unemployment flattens the income curve, leading to higher real wages at the low end.
Regardless, low unemployment is a good thing in its own right.
Again, no they aren't, the only link would be that inflation worsens material conditions, which could lead to more people seeking higher wages, which overall improves wage conditions. The only "link" we've seen is recently, and even looking just behind the 2020s you can find inflation causing real wage decreases [1].
> If all components of inflation increased uniformly, purchasing power would stay constant
"If" is doing a lot of heavy lifting here.
> Inflation is only a drag to the extent that it's surprising.
Tell that to people who are un-banked, working minimum wage, or really any average person and see what their response is.
> However, there seems to be a relationship between inflation and unemployment.
Not sure where you're seeing this, and its hard to try and claim, as we are just now reaching pre-2020 levels of unemployment, not some mythical low level of unemployment. I could see an argument for lowering unemployment leading to higher inflation, but a stable low unemployment has shown no bearing on inflation.
> I further conjecture that sustained low unemployment flattens the income curve, leading to higher real wages at the low end.
Thats a nice conjecture, but again, just look right before 2020 to find the perfect counter argument, and data coming out from the end of 2022 is showing the opposite[2], that as U6 has reached an all time low (which I will say is not too shabby), real wages have started to slow their growth.
> low unemployment is a good thing in its own right
I know I'm probably starting to seem combative here, but again, this just isn't always true. For the overall state of our economy and the safety of the wealth of the richest, maybe, but on one end of the unemployment chart it speaks to less people being able to make it by without jobs. Employment among people with disabilities is at its lowest[2], which speaks to our societies inability to care for those who need it. People with disabilities are not going out and finding jobs because bagging at a grocery store is fulfilling, they're doing it because they can't afford not to.
On a different note, I'm really not trying to seem combative, and I hope you're enjoying our fake online discussion as much as I am.
[1] https://positivemoney.org/wp-content/uploads/2018/02/CPI-inf... [2] https://cepr.net/jobs-2023-1/
One difference in terms that we're having trouble with is "inflation". When I spoke of "inflation" previously, I meant it in the general sense, not specifically consumer goods prices, or some other subset of prices. By definition, that means that nominal wages are included. The price of labor is just another price that inflates along with everything else. Note that the chart you linked [1] says "CPI inflation" rather than simply "inflation".
As for the relationship between unemployment and inflation, it's in a standard economics textbook. Unfortunately, the evidence for the theory has been somewhat mixed.
> Note that the chart you linked [1] says "CPI inflation" rather than simply "inflation"
https://www.brookings.edu/blog/up-front/2021/06/28/how-does-...
When I'm speaking of inflation, I use the generally accepted definition of "a general increase in prices and fall in the purchasing value of money." This is why in the US we use CPI (and sometimes PCE) to measure inflation, it allows us to track how the prices of goods change, and through that we are (theoretically) able to track what the actual inflation rate over time is. Inflation in the macro sense can come from many places, but in general it is accepted that while wages _should_ keep up with normal inflation of 2% or so in America, that inflation eats away at stagnant wages, and has little direct effect on its own over wages, as evidenced by looking at average wages vs inflation, even in 2022 where the bottom 50% experienced their real wage growth[1]. "Price of labor" is much more theoretical in modern america, as there are many regulations that affect it, along with the much decreased bargaining power of the average worker since the decline in union membership, along with the fact that the average person anywhere in the world is not going to ever "buy labor", its a price that corporations set themselves and pay exclusively, and is therefore already fairly detached from any inflation (yes, I understand that corporate spending is still spending, but that argument starts getting a little trickle-down). As I said before, I can see there being a link between inflation and wage rise, but I still don't see where the root cause could be other than material conditions worsening leading to people fighting for higher wages. I guess in a "we need to fight more for ourselves" sense this isn't terrible, but I think we need to move away from a system where the way to progress is through misery.
I will say I was incorrect about the standard view of the relationship of unemployment and inflation, and that historically there has been (and it makes sense for there to be) a link between high inflation and low unemployment. Again, though, there are several ways to look at this, and it depends on where you think the driver of inflation is. If you (informally) believe that inflation comes from supply-side, then its pretty easy to explain the current inflation as we have consistently seen breakdowns in supply chains that have consistently led to lower supply. For demand-side inflation I think an argument could be made there, as with direct-to-consumer stimulus there is more money (along with the same amount of money going into PPP loans for buisness-owners), but looking at real disposable income[2], we are just reaching pre-2020 levels (aside from some very obvious spikes where stimulus checks were). Without extra disposable income across the board, I'm not sure where the extra discretionary spending would come from to increase prices. According to the NY Fed, the inflation was mostly caused by the demand shock (specifically) when recovering from early 2020, and supply-side issues[3].
For more context, I do fancy myself a bit of a work-abolitionist and am horribly left, so it is definitely coloring my takes, but I hope I'm providing enough data for my claims to counteract my inherent bias.
[1] https://fred.stlouisfed.org/graph/?g=SCYD [2] https://fred.stlouisfed.org/series/DSPIC96 [3] https://libertystreeteconomics.newyorkfed.org/2022/08/how-mu...
The general public are consumers, so it's plausible that the "generally accepted" definition of inflation considers mostly the CPI. However, many generally accepted things are incorrect. If we're having a more technical discussion, it's reasonable to use a more technical definition. Perhaps best to be specific, saying "consumer price inflation" and "employment cost inflation" rather than simply "inflation" with no modifiers.
Notice that recent news about inflation has been deceleration of consumer prices. Most importantly, of rent, the largest component of the CPI. If the FRB were only concerned with that, they'd probably not have voted to increase the interest rate on Feb 1st. I'm guessing they had access to unemployment rate numbers from the BLS, which published a surprising job growth report today.
> people fighting for higher wages
My "fight" has been quite easy. I simply ask for it, or go get a different job that pays more. Of course it's not so easy for some people, but over the last couple years I've heard anecdotes from many business owners moaning over their employees' demands. "I just can't find any [qualified people that accept the wage I paid last year]." A friend of mine, an hourly worker, got an 18% raise in January!
The idea one might believe in either supply-side or demand-side causes of inflation and not both is strange to me. First, the primary driver of inflation in the long run is monetary policy. That's not controversial (among economists). Whether to consider price changes due to supply and demand as inflation is trickier, especially because those causes are so difficult to disentangle from monetary causes. Second, in considering short-term price changes due to the balance of supply and demand, they're clearly both important for almost all goods and services.
No. "In classical economics, labor is one of the three factors of production, along with land and capital. Labor is often defined as the physical or mental effort exerted by human beings in the production of goods and services. In neoclassical economics, labor is a broader concept that incorporates all human activity that adds value to a product or service"[1]. And while the ECI does exist, and is used by the fed to inform inflationary policy, it includes all costs of employing someone, indicating inflation in the health care market just as much as in wages. Labor is known to be much more of a reactive market[2], and also much more affected by things like the labor participation rate than inflation on its own. Even your original source for real wage increases uses the CPI. It also makes sense to use a measure of consumer inflation when talking about wages, as again, most consumers aren't buying labor.
> If the FRB were only concerned with that, they'd probably not have voted to increase the interest rate on Feb 1st.
Yes because the FRB is concerned with large scale monetary policy, and only have a few strings to pull. Interest rate hikes are intended to slow monetary velocity, effectively decreasing money supply, and has nothing to do with the housing market.
> Of course it's not so easy for some people
Bit of an understatement
>but over the last couple years I've heard anecdotes from many business owners moaning over their employees' demands
And? Anecdotes aren't sources, so I don't know what to do for ya here.
> A friend of mine, an hourly worker, got an 18% raise in January
That's awesome for them! It doesn't change that its anecdotal, and doesn't change any of the previous data that I've included to show that at best the lowest 50% are just starting to reach and surpass where they were in 2000.
> The idea one might believe in either supply-side or demand-side causes of inflation and not both is strange to me
I never said it was one or the other, and even linked to sources that included a breakdown of the share of each. I was more speculating on the driver of the higher than average inflation since 2020, and included fed breakdowns that gave evidence for a good amount of supply-side inflation, whereas most American pundits tend to cast it in a demand-side only light (people have more money so they spend more kinds of arguments). I even pointed out where it was demand-side in the fed report, although they show that it is not more people with more money, but an effective contraction (from reduced monetary velocity) and subsequent rapid inflation of monetary supply following COVID.
>First, the primary driver of inflation in the long run is monetary policy
I really need you to pick a time frame. I thought we were arguing inflation for 2020s. Yes obviously monetary policy tends to have the most influence in the long run. I also don't think anyone would say that inflation in the 2020s has been driven by monetary policy, and in general it isn't in times where its higher than what is wanted from monetary policy, like what we've been experiencing.
[1] https://study.com/academy/lesson/labor-types-importance-exam... [2] https://www.forbes.com/sites/qai/2022/10/01/us-wage-growth-f...
Consumers may not often directly buy labor (though it feels otherwise as a homeowner seeking a handyman) but the cost of labor matters nonetheless.
There are many people who might blame inflation in the 2020s on quantitative easing, which is a monetary policy.
It's interesting that you're going with a "classical" definition of labor, but not one for inflation, which would classically be defined as purely a monetary phenomenon independent of price changes due to supply and demand.
The issue I'm having with the distinction you're trying to make is that you're also trying to argue wages, which is only helpful in the context of consumer price inflation. Consumer price is also the best measure we have of inflation, since it is the only measure that is widely available and open to the public.
> though it feels otherwise as a homeowner seeking a handyman
Yes, part of what you're paying for is labor, but I guarantee that if the laborers actually got paid what you're getting charged, the world would be a very different place. The main difference between labor and any other good or service is that it does not exchange at its value, it necessarily has to exchange below its value, or else nobody would see profit (that value that people make that companies keep). This is necessary in a capitalist economy or it falls apart. This is why its hard for me to want to include it in our discussion about wages and inflation, because it is valued very differently from anything else, and again, is not something most everyday people are concerned about, which I've been very consistent about arguing about. I have not once talked about how inflation has affected corporations or businesses because I honestly don't care, so I don't see how a discussion about cost of labor is anywhere near relevant (if you say its "part of inflation" again I'm done with this).
> There are many people who might blame inflation in the 2020s on quantitative easing, which is a monetary policy.
https://libertystreeteconomics.newyorkfed.org/2022/08/how-mu... Already included a link where I gave evidence against that fact, and have not once myself said it was. Not sure where you're getting this argument from, but its not mine and I've never claimed it.
> It's interesting that you're going with a "classical" definition of labor, but not one for inflation, which would classically be defined as purely a monetary phenomenon independent of price changes due to supply and demand.
If thats the definition you want to use, then why do you keep going on about labor cost. If you want to use the monetary phenomenon definition, then inflation is just about monetary supply being higher than it was previously, which is what I said. While we did "see" an increase of money supply at the beginning of 2020, it was not to the degree that people try to argue (mostly M1 catching up with M3), and the monetary velocity was horrendously low (e.g. coin shortage). A low monetary velocity is essentially a lower money supply, which when rebounding resembles inflation (the link I've now included twice from the NY fed).
I agree that we're largely talking past each other. I've been trying to keep the discussion on real wage increases and the fact that although it has happened for the bottom 50% in the last 2 years, it hasn't helped much with their situation, and no redefinition of inflation is going to change that, so I'm still not sure why you're so stuck on it.
Whether that's sufficient to be interesting, I'm not energetic enough to debate.
Hope you got what you wanted out of this
I'd be interested to see evidence but I suspect we did see this? Retirement portfolios and housing prices (where the majority of elderly wealth is) ballooned.
> Instead, we see most wealth going to the richest of American
The elderly are the richest Americans so this is consistent with the elderly getting wealthier.
[1] https://www.census.gov/library/stories/2022/08/who-has-retir... [2] https://ncoa.org/article/get-the-facts-on-economic-security-...
> I had to guess.
You guess incorrectly
Pension funds, which ensure a decent retirement for a large portion of US residents. Index funds, in which many people have invested their retirement funds.
… Why?
Because that will buoy our stock price, which is important.
Why?
Because a significant portion of executive compensation is in stocks.
But the big tech companies are actually profitable. Even Amazon. https://www.wsj.com/market-data/quotes/AMZN/financials/annua...
They put $470 billion through the till and ended up with $33 billion net income, for a margin of 7%. That's a normal profitable company, albeit a huge one that continues to eat the remaining retail world. You can look at the quarterly results too, but there's nothing in the rear view mirror that justifies layoffs.
The real driver is shareholder returns. The shareholders would rather make more money than provide more jobs / run a charity.
Maybe you were saying the same thing, but the companies don't see the new investor money, other investors /owners do
True...contrast Microsoft's decision to take an $800m hit in letting go 10,000 employees with its earnings report showing $16.4b operating profits.
Only at the executive tier.
EDIT: /s
Analysts expect $1.40/share.
Company X releases earnings of $1.45/share.
Things still tank, because... the "real" expectation was 5% over analyst expectations, which was already over guidance.
layoffs arent always about cutting costs, its usually about restructuring and reprioritizing
But so what? There’s no gotcha here; it’s not like Microsoft or Google or Amazon claimed they were cash poor and could t afford to pay people. They are changing the areas they spend money in. Would it be better if they were only cutting back and not also investing in new areas?
* showing profits
* showing multi-billion in investments in new companies
* when the money saved is tiny compared to the increased year-over-year profits
"But so what?"
Their response is _exactly_ on topic. There is a real sting on these human lives where a company has decided they don't have value relative some new tech purchase. This is contrary to particular ethics frameworks many of us are familiar with around human value.
But I guess I don’t see how empathizing with that means. . . What? Microsoft should cancel an investment they think is strategic? Microsoft should keep job roles they no longer things are important?
Highly profitable companies like Microsoft are not zero sum. Nobody said “let’s lay people off so that we can invest in openAI”. Each decision is made independently, for its own ROI. If they believed that keeping these people and making the investment was the best approach, they have the funds to do so, easily.
I love the McSweeney’s piece, and I’m sympathetic to those laid off, I just don’t get the innuendo that a company should do something differently.
If a family in financial trouble just lost their son to a car accident, for example, is it the right time to say "well, at least you won't need to pay for his college."?
Especially in software, skills are pretty fungible, and most of the support organization's on-going requirements are likely to be highly agnostic of what, specifically, is being engineered.
IT does bring up an interesting alternative. What if instead of layoffs, companies provided an ultimatum:
Your employment costs $X. You have 3 months to find a new source of $X+1 revenue that requires your continued labor.
Shareholders like me are the ones you have to convince, not some CEO or abstract concept of a corporation.
Fair warning, you will have to convince me that it is more important than supporting my children and maximizing my retirement.
There is basically no risk that a different group of stockholders with more voting power want to run it as a public works jobs program
I do think it is unethical to jerk people around (e.g. new hires), but I think generous severance goes a long way towards addressing this.
Most workers don’t want to use their leverage to make corporations make better decisions - they want to use their leverage to get paid more.
A company and its owners doesn't get wealthy from revenue or sales, but from pumping up their stock. For some reason, investors love both layoffs AND headcount increases.
Too many people are busy trying to play financial games and not enough are actually looking to produce anything of value. It is worrisome where this long term trend takes us.
Better for whom?
HaHaOnlySerious. A stepping stone on the mysterious garden path of bad decision-making that leads to consultant$, ho$tile takeover$, etc.
Aligns with the news that ChatGPT could pass b-school exams[1]. I think this should be very threatening for low skilled middle management.
[1] https://nypost.com/2023/01/23/chatgpt-outperforms-humans-on-...
For me, reducing my work life down to such a simple transactional level has been incredibly freeing and stress reducing, and allowed me to focus even more clearly on the work.
With contracting, you can take as many clients as you can handle, and you'd have to lose all your clients simultaneously to end up in an equivalent position.
I suppose it’s also the hustle of finding new clients that never interested me much.
My process is that 60 days before the end of my current contract, whether my current client has said they intend to renew or not, I start seeking other contract opportunities. If my client finalizes the renewal, I halt my job search. If they don’t, the 60 day window has consistently been long enough to ensure I have my next client lined up before my current contract ends.
Most of my contracts are 12 months long. I don’t take contracts any shorter than 6 months.
I should note that I’m in Canada and so I don’t have to worry about healthcare coverage.
Basically anywhere with a robust social safety net (not the USA)
Do you find that you get less comp for your contracts working in Canada?
Oddly in my experience in the mobile (iOS) development space the opposite happened, and rates increased significantly. Those higher rates have held steady for two years now and appear to be permanent. Plus I’m increasingly taking contracts with U.S. clients.
Of course a full-time FAANG employee with stock options etc. will have a higher total compensation compared to me, but overall I’m making more than I ever have and I’m much happier compared to when I was a full-time employee.
I am not sure I want to contract like that again. It has most of the downsides of regular employment but none of the benefits. I think in the USA it would make more sense to just switch full time jobs every two years and take breaks between.
Id love to try contracting again but more like true “consulting” - higher rate and fewer hours. I am not sure though that pure dev work could be high leverage like that - it just takes too damn long
I too would like to find true consulting opportunities but feel that it’s gonna be tough unless you become well known. Another in between approach is to have a more fixed, productized offering… the only one I can think of for someone with a typical full stack skill set is to build MVPs… you could also teach courses…
Or if you can get together with some friends you enjoy working with and form your own mini agency this can be an enjoyable approach
EDIT: One more idea which I know is done is to develop your own framework or set of processes for your client base, but still charge somewhere in between what you have and building it from scratch. But again this isn’t possible in a staff aug situation as you’ll be beholden to the existing team’s tools and processes.
1. full time employees got benefits, contractors did not
2. full time employees got notice before layoffs, contractors could get dismissed at a moment's notice
3. contractors got paid double what full time employees did
* 5 - 10 paid holidays like Labor Day, 4th of July, etc...
* another 10 - 20 paid days off for PTO
* 7% less taxes for social security, medicare
* 401k match
* health insurance
So actually, getting paid twice as much hourly might not be too much extra at the end of the day.
This is a BFD. I know that I had colleagues in France when I was also doing contract work (amusingly as a US ex-pat) who a) didn't make as much as me but b) felt more secure in their future
Similar kind of situation if you're in the US but your spouse/partner has medical coverage through FT employment.
This is priced into the contract.
I've done both FTE and contracting. They both have their benefits. Looking at my FTE job with the attitude of "This is a business relationship – you pay me, I work" has been the best balance for me. You can do more deeper bigger things than you can as a contractor plus the lottery tickets are nice.
Honestly, if companies wanna pay extra (they do) for me to go "Rah rah rah $Company is changing the world!" and wear swag, so be it. When $OtherCompany pays more/better, I'll do it for them. Just like an athlete changing clubs.
Though it’s really tough for most employees (especially the 20-somethings) to resist the internal tribal messaging from their employers and instead see their employment relationship as just transactional.
Plus Gen-X often watched our parents get laid off when we were younger, so there's that lesson too.
I think you’ve described the challenge 20-somethings face when it comes to resisting the tribal messaging from their employer pretty well — coming out of school many people want to continue that sense of belonging. People develop close friendships, and romantic relationships, and they connect that to their work experience. Employer messaging around being part of a family and striving to a higher purpose is meant to foster loyalty and better productivity.
The flip-side is when layoffs happen the employees who have bought into these team/family ideals feel betrayed, and I’ve seen people struggle with coming to terms how their employer could let valuable people go after being told how special and important they were.
And to be clear, lots of these people are special and important; but that’s obviously not a protection against big businesses looking after their own selfish interests first.
Really, a modern future unicorn is just using that same cult/religion/government/brand playbook. Often unknowingly. It happens to work best on the young.
Everything is tenuous compared to living off the safe withdrawal rate of a $10 million diversified investment portfolio.
So you live your life, financially and otherwise, with this in mind.
I have no doubt that this sounds (and would be) more stressful for some people, when compared to full-time employment, particularly in the US where your job is typically tied to health care and other benefits.
But most folks I know who have been laid off from long-term employment were shocked by (and ill-prepared for) the event.
With Contracting you know that there is say a 50% chance the contract will expire on a given date and can plan accordingly. As a direct employee there is say a one percent chance you'll be laid off and it could come at random times.
I need to do about 4 months of work to cover my family's living expenses, then another 2 to make sure I've saved adequately for retirement, then ideally I take 6 months off.
Though, there are always workarounds when managers want to keep their highest performers off the list.
Never assume you are safe. I was a single point of failure on a team that was supposed to be revving up for some pretty important strategic initiatives. My manager put me on a “do not fire” list prior to the company conducting a layoff of 30% of the company last fall. Still got canned. My manager went tried to determine why I had been let go when he specifically indicated I was a single point of failure . Turns out, it was because someone in HR had mixed up some spreadsheets :/
Despite it being funny, if it wasn't for the outright satire, it would be virtually indistinguishable from the recent tech layoff messages:
Gitpod - https://www.gitpod.io/blog/building-for-the-long-run
Microsoft (this is maybe the classiest) - https://blogs.microsoft.com/blog/2023/01/18/subject-focusing...
Zuck/Meta - https://about.fb.com/news/2022/11/mark-zuckerberg-layoff-mes...
Stripe - https://stripe.com/en-nl/newsroom/news/ceo-patrick-collisons...
Spotify - https://newsroom.spotify.com/2023-01-23/an-update-on-january...
The industry had been, for quite some time, growing both in terms of headcount and compensation, without regards to boundaries, sanity or practicality.
With that in mind, it looked like it was only a matter of time for this to happen. However, one cannot help wondering how much influence did profitability and future outlook had to do with it, versus how much it was about regaining control over workers and salaries and about "fixing" the stock price.
For me, the biggest crime is the fanatic enthusiasm and we-are-all-a-family narrative these companies were pushing while growing well beyond needed in 2020 through 2021 contrasted with the generic messages they are peddling now when laying off.
It's bad writing, it's an even worse communique from a CEO.
Start with the point. The point is that X percent of the workforce is to be let go. And that it has been already in the works for some time because some people have been let go that day. "some notifications happening today" = we already have a list and we'll go through it as fast as labor laws allow.
All stuff like "best wishes to those impacted by the course correction in our employee base".
Like they aren't just numbers or human resources, it's real people losing their jobs and facing difficult situations with work visas, mortgages, etc. - the same people who have helped build the products they work on.
It's isn't an unfortunate natural disaster but a deliberate decision made by executives, where in the majority of cases it's just that the rate of growth of profit has fallen - nowhere near severe losses and economic trouble.
If he did, he'd be criticized for being heartless. There's really no winning here, I can't blame them for phrasing things the way they do.
“A massively profitable company putting thousands of people out of work so that they can boost their stock price which millions of people own (directly or indirectly).”
A dumber variant: the needs of the many outweigh the needs of the few. You thousand gotta go so us millions can get richer.
My comment should not imply that I endorse this “fuller” point of view.
Just because "millions of people" have, through some indirect means, some small investment in MS doesn't mean there's anywhere near a proportionate gain as compared to the loss being suffered. This is especially true if those people don't sell their MS stock during that period to realize the gain, as there's plenty of chance that the price will fall again later.
Consider this: no, they don't.
If executives at a company rented a bunch of store fronts expecting to increase their footprint and then said "we're bad at our jobs and didn't realize we weren't going to do anything with these store fronts" the investors would (presumably) ask them to leave or cut their performance bonuses. It's not like these companies don't have massive amounts of data (I'm looking at you Google) to analyze and estimate a market and determine if they needed the resources to begin with.
Another thing I don't see mentioned often enough is the impact that this has on state governments. I can imagine that the people working in the California state government would be concerned if several large companies took a bunch of store fronts off the market and then just dumped them all in one fell swoop.
Are these managers, executives, and presidents so bad at their job that they can't find anything to do with a bunch of talented employees that they spent time and money on-boarding?
It's simple:
- They are chartered as a for-profit entity
- FAANG workers who are making an average $200K or whatever don't need welfare.
Like I'm all for class warfare, but not between the super rich and the very rich. I don't have any sympathy whatsoever for the $200K class when they get laid off - being worth this much money includes understanding how the game is played and preparing accordingly.
So no, if you get laid off at this level, you are not working class, you are not an average American, the package MSFT gives you is above market and that is good enough. Let's save the extra help for people who actually need it.
It has been incredibly obvious that technology companies over-hired during the pandemic and that the growth they were seeing was not sustainable. The “we prepared for a different economic reality than the one we face today” is hogwash. Rather than preparing, they post-pared for the economic reality they were in, not the one that they could easily have seen coming.
Rather than directing anger toward the managerial class for layoffs, I’d rather see anger directed toward them for over-hiring in the first place. Nobody is mad when they’re at the party, even when they know it can’t last forever, but everyone will is upset when the music stops.
Also, FWIW regarding compensation, I agree. I recently saw on levels.fyi what a recruiter at Google makes - starting, with equity and bonus, is substantially more than me as a software engineer ~5 years out of college. I voiced my amazement to my girlfriend, and she told me, “well at least you still have a job”. Sorry, I don’t feel an ounce of sympathy. That recruiter could take the next four years off from working entirely, and we’d come out about the same in earnings. As tech workers, we are all out of touch with “everyday people”, but those working at FAANG companies are out of touch even with the rest of the tech ecosystem.
Almost every criticism I see if the “managerial class” includes criticism for over hiring. That’s the point. Management making strategically unsustainable decisions is what resulted in over hiring. It’s a mistake by those in management, but the consequences, layoffs, are entirely born by those who had no hand in it.
Tech has been addicted to VC funds and investors don't care what happens as long as their stock price grows in the short term.
At this point I'm considering just never working for a public company ever again.
Well! The honest answer is because software engineering is an incredibly satisfying intellectual pursuit. So satisfying that outside of work in my spare time I literally do it for free, giving away my work to strangers as free / open source software.
Why draw a salary then? Or stock? Well obviously I have to feed my family. But also I have to then see that I’m getting a big share of the pie too, because otherwise someone else will be eating some pie that was rightfully mine, and that feels wrong.
Would my C-level pals get their $15m exit without my work? Maybe, but it’s less likely. Would they get it if the other top engineers and I all downed tools or walked out as a group? No. So why is their exit equivalent to several mansions and mine is around about a year’s worth of salary?
Waterfall edge marble kitchen island indeed.
Honestly? Because 1) you are very replaceable and 2) you have a very low chance in succeeding at organizing any kind of group/union action. If either of those two facts were different, you would have more leverage. But they aren't so you don't.
A hiring freeze and marking obsolete positions as obsolete (meaning if someone switches teams or quits that specific position will not be replaced) should be a workable model for all profitable companies with some cash reserves. Sure, it takes a bit longer and probably costs a bit more (though probably not tons and lay offs also have other traumatic effects concerning knowledge loss, morale and motivation that can negatively affect the business) but it's a workable model.
Embed that into overall more cautious hiring in good times (yeah, we can't time travel, so that's not an option - but to me that's the thing that should be learned from this) and you should never have to do any layoffs if your business is basically sound. I would be shocked, for example, if Apple were to do any lay offs. They seem to follow that approach (well, probably not in the retail context which I also think is unfortunate).
To me it seems like those lay offs are primarily a tool to communicate and that just sucks. It sucks that something that should clearly be seen as a management failure (if you need to do lay offs it seems to me obvious that management is to blame, not those laid off) can in this weird upside down world be used as a communication tool towards the wider world that they are doing something useful. Even if it wouldn't be needed.
Also, I just don't think people should be treated like that, especially if it's not needed. It seems so pointlessly cruel and inhuman. This is not the world I want to live in.
And I know that's hard to pull off in capitalism. Maybe that's the issue. Though it's not as if you cannot modify capitalism to at least not allow for stuff like this.
That's not the relevant question. The relevant questions are: were the layoffs illegal, and if they weren't, then why is it any of your business? If you don't want to live in that world, start your own startup, hire people, and never fire them. Nobody is stopping you.
Also, in general I don’t live in that world. It‘s much harder for sound companies to just lay off people in Germany (though not impossible).
Free association in labour is not possible when there's so much leverage from one of the sides of the negotiation. In a perfect idealised model, labour will increase in price due to people not accepting jobs they would, ideally, not think it's worth it, companies will then raise salaries, market equilibrium! In reality people are mothers, fathers, or just basically anyone who needs something to eat, and for food they'll accept any trade to keep some part of their dignity.
A fucking spherical cow-ish principle doesn't take into account human dignity into their pricing models... And so these people work backwards by adapting that if it's not accounted for it's irrelevant, rather than the opposite reality that we experience.
I was really fascinated to learn that most North Americans never even encounter the concept of ordocapitalism/ordoliberalism in their basic economics courses. Somehow, a concept of capitalist economic organization that has been the recipe for success for the creation of most successful economic turnaround in modern times is just...ignored?
The beauty of America is you can do my suggestion (make your own startup, run it without firing people), but in other places where layoffs are illegal, you can't do the opposite suggestion (make your own startup, fire people). Let the best idea win! But you seem to be endorsing a world where you don't want the best idea to win, you want the state to enforce a particular idea that makes you feel good.
If you are free to run a company however you want within the bounds of the law, but only one type of company emerges, maybe there is a reason for that.
I think a more relevant question is: should the layoffs be illegal?
Just because todays law says “tough luck” doesn’t mean it has always been, or will always be, that way, or that we can’t argue for something better.
If the layoffs were uneccesary you know to treat the company and its executives as worse to work for than they would be if they did necessary layoffs only.
I.e. increase the cost of hiring you.
The "none of your business" trope is silly. Why not warm each other of shitty things, be it a bad restaurant or MS as an employer.
Originally corporate charters were hard to get because they were only issued by the Crown. Nowadays you can get one for a few dollars. We need to ask ourselves if they are still serving the public purpose we intend, and if not how we need to adjust things.
And why is that?
I'd like to offer a different explanation: Entrenched in-groups and institutions control access to the highest paid jobs. You need to become a part of those to be allowed to participate.
That's the same thing as being difficult to replace. You gain "access" by being perceived as difficult to replace. The more difficult you are to replace, the higher your access.
> That's the same thing as being difficult to replace
I‘d appreciate if you didn‘t respond in a passive-aggressive manner.
Why not try that? Or use it as leverage? If you believe this.
(I’m not sure where any of these ideas come from)
Is this sarcasm? I can't tell. If it's not sarcasm, here's some articles about the Teamsters union.
- https://allthatsinteresting.com/jimmy-hoffa
- https://themobmuseum.org/blog/feds-agree-to-reduce-oversight...
- https://www.chicagotribune.com/news/ct-xpm-1985-10-28-850313...
1) An inflated view of the impact of execs compared to other employees. This is a well studied psychological phenomena. People tend to overestimate their "skill/contribution" even in poor luck or even rigged scenarios. (There was a study which gave some subjects a head start in monopoly, i.e. more money, the subjects tended to talk significantly more about the advantages of "their" strategy in the game, then the subjects that we not given the head start).
2) It's in the interest of execs to keep C-suite salaries high, because it increases their own salary.
So it's not surprising that we have seen a dramatic increase in ratio of exec to average employee compensation, and why execs are typically isolated from economic downturns.
I don't personally understand this one, although I don't doubt its veracity. I am an engineer with years of experience in the industry, but I don't think my contribution is high or important; I could be fired at any moment and would anyone notice? Maybe in the short term yes, but mostly no. I am easily replaceable, my boss is easily replaceable... Society will continue on without me because like most of us I work a B.S. job. So I really struggle to empathize with the viewpoint of a self-perceived 'Hero IC', is it just narcissism?
We couldn’t have the workers collectively realizing their worth now, could we? The inmates would be running the asylum.
Supply and demand works in a world with no information/power assymmetry in Econ 101, a.k.a. freshman's dream. Even in the most basic case, when a sack of flour is being bought and sold, the buyer wants to buy a sack of flour, the seller wants to sell a sack of flour + a variable number of bugs in it, and the seller's profit margin goes up with the number of bugs. That's why there is a third party necessary which fixes the maximum number of bugs to be included with a sack of flour: otherwise this whole "free market" falls apart or starts killing people.
You can make a good argument that protections need to be made to protect income workers and that we wouldn't lose much economic efficiency from these changes. On the other hand, most people in this thread are intentionally ignorant of the market landscape that gave their their cushy mid-six figure compensation. Instead they would rather make the same tired memes about "short term profits" and whatnot.
> This narrative is counterfactual to how capitalism actually works. Your worth is determined by supply and demand. Investors would never agree to paying American developers twice as much as European developers if they knew they would be on the hook for them until their cash reserves bled dry.
Supply and demand works best when the data about the market is symmetric. In the job market it is not. Firms know that they are willing to pay, and what they have paid, for work. Workers do not. If a worker takes a penny less than what the firm can bare, that is slippage that is being arbitraged into profit by the firm. Workers are goaded into a cheaper price for their work by firms through the threat of "We will go with another candidate" even if there are no other candidates. Again, asymmetric data.
> On the other hand, most people in this thread are intentionally ignorant of the market landscape that gave their their cushy mid-six figure compensation. Instead they would rather make the same tired memes about "short term profits" and whatnot.
Comparatively (amongst workers) well paid workers does not mean that those same workers are compensated fairly by the firm. Workers do work, managers manage. The core question posed by the thread OP was around the value of the work (and the protections afforded to) workers do as opposed to that of management.
It works efficiently despite information asymmetry.
It's called "risk". Risk always factors into prices. You pay more at a dealership because your risk is less. You pay less for a used car because your risk is more. A job that is more secure pays less. A job that is less secure pays more.
The market efficiently prices in information asymmetry.
But this is not true. An economically efficient market is one where goods and services produced are delivered at their most valuable. The job market is the antithesis of that.
If there is asymmetric information (and asymmetric risk) AND that asymmetry is known by the side with most information (like it my job example), then the side with more data can price more optimally than the side with less. If we extend that into the tenure of the job, you can be pressured to work longer and harder than you are actually paid for if the risk of losing your job is greater than the risk of you company having to replace you. Just look to Japanese salarymen or Chinese 996 workers. Those are not efficient markets. They are markets skewed towards the owners of capital.
Your example of used vs new cars is an example of a risk discount, but it really doesn't fit here, imo.
The risk element goes both ways. An employee factors risk into what salary he'll demand. For example, people going to work for startups are going to demand lots of stock options to compensate for the risk that the startup fails. People accept lower salaries at established companies for the lower risk of the company failing. An employee will demand a higher salary to cover the risk of having to relocate. An employee will demand a higher salary for jobs that entail more personal risk.
It goes on and on. Risk is most definitely a factor in all negotiations, and risk is exactly another word for information asymmetry.
Sure, I agree that corporations should be more transparent but this isn't the messaging that I'm getting from these comments. Maybe I'm completely misinterpreting, but this is what it looks like people are trying to say: "These corpos are too damn greedy! If only we pressured these corpos for being greedy, we wouldn't be in this position." My point is that this sentiment completely ignores that this "greed" is what created such a large class of relatively wealthy tech workers in the first place. If companies weren't allowed to lay people off, they would be less willing to hire them in the first place.
What is stopping them? If this were really true wouldn't we see at least a few examples of large worker collectives succeeding by now?
On HN coding is more respected than social skills. A software engineer is likely to crumble in 30 seconds when they are interviewed on CNBC.
No it isn't, you see people saying "social skills are more important than technical skills" everywhere people discuss such things, and they get upvoted a lot. People saying the opposite tend to get heavily downvoted.
So to me it looks like even on HN social skills are more respected than technical skills, at least in threads where we discuss what skills are important.
This can’t possibly extend to computer engineers right?
Of course impact is related, but only as a qualifier. If your impact doesn't justify the salary then that is a problem. But as long as you do enough to justify your salary than other factors tend to dominate.
Wrong: salary is determined by your ability to negotiate, and your ability is higher when you could be doing the same satisfying activity for someone else.
On my own time, I only work on stuff I personally care about, only for as long as I want and I usually don't even publish the resulting code because of the implicit responsibility associated with that. They'd have to pay me to work continuously on code I don't care about or even own. Why solve other people's problems for free?
I haven't been paid since 2017. I was laid off, after 27 years. It was totally expected, and I was prepared.
What I wasn't prepared for, was the rejection from the industry.
Once I got over that, I was fine. I found some 501(c)(3) work that interested me, and I've been doing that. I did some writing, started trying to implement many of the ideas I had, while being paid (but were ignored), and found out that I had been absolutely right, the entire time (It is not hubris to postulate that, if I had been allowed to implement my ideas, the layoffs would not have been necessary, but that's all water under the bridge).
I used to say that "My dream is to work for free."
Livin' the dream...
Unionize baby!
Because their decisions make or break the company, and your's do not.
For a well known example, Steve Jobs took over Apple when it was 90 days from bankruptcy. With the same group of workers, he took it to the biggest company in the world. Just by making different leadership decisions. That's why he made the big bucks.
For a more recent example, see how James Daunt turned around Barnes&Noble:
https://tedgioia.substack.com/p/what-can-we-learn-from-barne...
> some pie that was rightfully mine
Found your own company, and the pie will be rightfully yours.
There are many more Ginni Romettys than Steve Jobs, how does one successfully apply this analysis in less obvious scenarios?
Apple churned through several CEOs who did not make a difference.
How does one make an analysis? That's the game, indeed.
How many businesses have we seen slowly fade away as the tech team ebbs one by one leaving only a remnant core of mostly non tech roles?
this complaint is almost as tone deaf as the satire. poor you. i was laid off, and only got a month's severance.
They tried this at twitter. But twitter survived. Turned out for KTLO not many people are actually required.
Also, when you are over staffed, employees have enough free time to get political, run slack channels, do activism and in general reduce the entire org's productivity. Most companies were stuck in this phase the last few years, with Coinbase and a couple of other companies being brave enough to say they don't want their employees engaging in workplace activism.
This whole macro-economic change and the twitter success after getting rid of 30% of its employees, has now given these companies an opportunity to follow without getting singled out. If they don't do it now, and do it 6 months later they will get called out as demons. Now since everyone is doing it, it is not that bad a PR hit.
Accountability comes with consequences. What are the consequences?
I think the US is at 12 years + 4 for university, that's 16 in total. Actually, I think kindergarten is another 2 years. So that's 18 years. All of them in private institutions.
At current tuition rates, all of the places he went to cost about $60k per year.
So that's about $1m just in his education...
I had to look that up, it appears to be a USA thing that "gives workers and their families who lose their health benefits the right to choose to continue group health benefits provided by their group health plan for limited periods of time" (1)
Nothing to do with "Cabinet Office Briefing Room A".
Ugh. Health care that is contingent upon employment, is a social ill.
Actually it's even worse than no consequences; often times these layoffs give the CEO more money. Their compensation is typically heavily in stock and these layoffs often raise the stock price, directly increasing the CEO's net worth. Taking "full responsibility" indeed.
* chef kiss *
Oof. This guy knows how to write. And he's funny to boot! May consider adding my name to his Patreon list...
And his articles on the linked site: https://www.mcsweeneys.net/authors/mike-lacher
Perhaps some of you are beginning to understand the term Solidarity Forever.
The difference in how layoffs are handled between the US & parts of Europe is astounding, where big tech could be bothered to face the fight against union influenced legislation and works rights.
Union: Oh, you are making 16 billion profit and want to lay off 12,000 people on a whim? How about we strike and your profit is cut in half next quarter and you all miss your stock options?
Huh, no layoffs, funny.
Granted we haven't SEEN an effective labor union in the US (aside from the police unions) in about 100 years, that doesn't mean they can't work in principle.
Then that massive no-poaching collusion amongst dozens of the top tech companies in the US surfaced.
https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_L...
It wasn't just "Adobe, Apple Inc., Google, Intel, Intuit, Pixar, Lucasfilm and eBay", the practice spread to "dozens" of other companies:
> Confidential internal Google and Apple memos, buried within piles of court dockets and reviewed by PandoDaily, clearly show that what began as a secret cartel agreement between Apple’s Steve Jobs and Google’s Eric Schmidt to illegally fix the labor market for hi-tech workers, expanded within a few years to include companies ranging from Dell, IBM, eBay and Microsoft, to Comcast, Clear Channel, Dreamworks, and London-based public relations behemoth WPP. All told, the combined workforces of the companies involved totals well over a million employees.
https://web.archive.org/web/20210912195239/https://pando.com...
It's actually pretty insane what's revealed in the documents, they knew exactly what they were doing, they were completely ruthless.
Anyway, now I think that we do need unions, or something, because these folks are clearly willing to do anything they think they can get away with.
(FWIW, I mostly worked for startups, but I did try the corporate thing for a couple of years, mostly for the experience. What I decided was that corporations are not bad, in fact I'd say they are mostly a huge improvement over previous forms of large-scale human organization, but they're not for me. This isn't a judgment thing, it's a matter of personal taste.)
- - - -
edit to add: I started a non-profit mutual benefit corporation a couple of months ago to pursue a simple tech stack w/o the overhead (pun intended) of being a for-profit startup. It's way too soon to say whether it will work or not, but at least I'm living my values. :)
The sad facts are that most workers in the US: lack class awareness thanks to decades of successful pro-owner, anti-worker propaganda and policies; are falsely divided along lines which are convenient to the owner class (left/right, boomer/millenial, gay/straight, receiving public benefits/not); are unknowingly and dangerously close to medical bankruptcy even when covered by "good" insurance; can't afford to be even temporarily unemployed, because their health coverage is tied to their employer; can't afford to protest or attempt organizing, because they could then quickly become unemployed and endanger their dependents.
The Silicon Valley engineer earning $500k/year is better off than the midwest bank junior IT worker earning $50k. But they are part of the same class and should organize accordingly in order to gain true leverage.
Having competing job offers is a kind of leverage available to some, at an exhausting personal cost. These can be used to obtain one-dimensional improvements like higher pay, more vacation days, or choice of projects. But true leverage could make CEO's weepy and meaningless "I take full responsibility" statements actually mean something, among other things. The recent layoffs in the US including a hefty severance rely on luck, not leverage.
Tech workers probably have all the tools needed to organize effectively, and not only among themselves. But whisper "union" and ten peers will chime in before your next breath with falsehoods and other generic claims based on misremembered anecdotes which miss the point entirely and diffuse useful discussion.
We have a system that allows people to do unpopular things, like this, because it works better than the alternatives.
Dons flak jacket
Does it?
competent operators wouldn't get into this problem in the first place
(or, alternatively, these layoffs are also an incompetent decision and the C-levels are simply following the herd)
- if they optimisitcally hire a ton of people, then fire most of them, that’s expensive in the bad years
- if they only hire as many people as they need, then they’ll be eaten by the bigger-risk-taking competition in the good years
In general, it’s better to keep people if you’re profitable even if you want the margin to be higher. Google’s problem is more their management – in a less rudderless environment you could come up with things for people to work on but when you’re mostly sitting around hoping the ad words money fountain keeps running it probably is true that you can’t figure out what to have them do.
Literally. That's all it takes in the US for everyone who doesn't have an eight-figure-or-more net worth to be staring ruin in the face.
Your comment is exactly the mythology that perpetuates the problem. Exploitation is sold as participation. "Well we're paid fairly well so I guess we must be privileged and upper class."
If you can't stop working tomorrow without ever having to worry about money again - including health crises - you are not privileged or upper class.
Please stop telling yourself you are.
The original article leads with mentioning the recent layoffs at Microsoft, Google, and Amazon. These are people who were making great money, and now have those companies on their resumes. I know they’re currently going through a rough situation, which should not be minimized.
It’s hard to take your argument seriously though, as there’s so much space between FAANG execs with 8 figure savings, FAANG workers making 200k+, and poverty. Being realistic about this helps your argument that those companies could have done better, not the exaggeration.
Whatever your complaints here are, start with having people working at a job where there is literally no-one willing to stand up and pay them their salary. That isn't going to be a society that can comfortably sustain people being unable to work. To have the level of surplus where a healthcare crisis is easily dismissed requires extreme economic efficiency.
If you want someone to be unable to work and just sitting around dealing with a personal crisis, then we really need the people around them to be working on things that get a "wow, yeah, that is important!" type reaction.
Weirdly though, the number of health crisis that will lead to death are fewer the more wealth you have.
It’s incredibly tone deaf.
1. Someone making $200k is definitely doing well compared to almost anyone in the US (94th percentile, 98th at $300k) but those salaries are heavily clustered in very expensive areas where that might not even be the top 10%. Someone making that much working at Apple or Google is living in a normal house - a nice one, sure, but not a mansion - and still feeling things like childcare costs.
2. That tech worker has to go to work every day. If they get sick, their income will end just like someone making coffee or pulling packages in a warehouse - to be clear, not as quickly and there are more conditions they can keep working with, but their income is derived by selling their time. Contrast that with the truly rich, who have passive income and enough assets that things rearrange around their needs. Someone with $10M in the bank isn’t homeless if they get a chronic illness, and if they own the company (or are related to the owner) they get as much time off as they need to deal with it.
Nobody should feel sorry for tech workers but it’s important to look at how people’s lives differ, especially in the United States where things like healthcare and retirement are linked to their ability to work.
A billionaire might “feel” the cost of his private jet fleet but that doesn’t mean he’s not rich.
And, again, I’m not saying that this is a pity-worthy situation – only that it’s a lot closer to the average worker than the average rich person in terms of having to go to work every day, think about finances, etc.
Your average middle class American could never afford to own anything in a HCOL city.
That’s the privilege.
Of course a lot of the people who live in a HCOL of living area feel like they can only just afford to live there. If they thought it was cheap, more of their class would move there - it is a desirable area. You have to be so rich that everyone in your wealth/income class can afford to live in an area before housing costs will be low enough to ignore. So the top 100 billionaires don't feel the housing costs of living in a HCOL area because all the billionaires in the world could probably move there and not fill up the available housing stock. But if all the millionaires in the world want to move somewhere then the price will be high enough that a millionaire feels like they can't afford to be in the area. And that is really just a subtle market hint that a lot of millionaires think it is a nice area. Doesn't make the people involved less rich.
It doesn't matter the wealth or income someone has, there is always something they can't afford. So clearly the existence of "limited resources" is not a good indication of whether someone is wealthy or not.
But ignoring the type of house and it's location - if someone can afford the down payment and mortgage payments on a $2M homes (typical single family home in the Bay Area), the are objectively very well off.
Just like it's useless work to build a search engine when directories work well enough? Or useless to build an email service when ISPs already offered them?
Microsoft shouldn't be in the business of providing dental care for it's employees. Blaming corporations for the dismal state of the healthcare system is unfair.
But that's exactly why we have bankruptcy. You know the word doesn't mean "losing everything you have", it means "discharging debts you're never going to be able to pay", right? You can do it once, and it ruins your credit for a long time (7 years IIRC), but it saves you from dying of starvation trying to pay off debts you don't have money to pay.
*or googleers, metamates, plaids, whatever
Incidentally is there a name for these company-nickname-for-employees words?
https://mikepope.com/blog/AddComment.aspx?blogid=2354
He adds,
> Then there is the question of what we might call a nickname like this. A name based on a place is a toponym. A name for people from a city or region is a demonym. I solicited some ideas for this, too. We threw around corporanym and employeeonym. Someone suggested "idionym, which should mean roughly 'your own name'."
> The most interesting suggestion was from Colleague Clay, who knows his way around a number of languages. He suggested ergazomenonym ("from modern Greek εργαζόμενου= employee"). I like it tons, although I'd need some coaching, perhaps, in how to pronounce it properly.
0. https://twitter.com/Carnage4Life/status/1617534649508716544
That video was done for The Man, not for the employees well being. And apparently The Man was able to sell you this depiction of the work place so you can now feel smug about all those layoffs.
Good for you I guess, you independent thinker!
0. https://news.yahoo.com/former-google-employee-documents-day-...
Do you honestly believe those TikToks were made spontaneously and they depict a realistic view of the workplace?
It's not a half baked conspiracy theory - it's called a PR strategy and companies have been doing them on social media for as long as they existed.
Let me give you the benefit of the doubt. Even if the videos are spontaneous, how can you with a straight face use them to judge a workplace and use them as a metric on the amount of work done? Do you really think social media is a realistic depiction of life?
Maybe if you saw a TikTok of how big investors and execs live and how much they would lose (nothing material) by retaining these employees, you would understand the situation better.
Sure, make your office pleasant to work in. Locate it near good lunch places, or even provide lunch. But the hammock room, massage chair lounge, private museum/art collection, and rooftop bar are all aspects of my employers that I'm ashamed to even discuss.
So it is rational decision for an enterprise to let you go and free some liquidity that could be deployed elsewhere. Even buying Treasury bill yields more then an employee and is more liquid option. Liquidity is important when times get tough and recession is coming..
Just face it.
And for an enterprise if competitors are letting go employees it means that they are building their war chest of liquid assets. So you have too because you have to be prepared when time comes for mergers, takeover and acquisitions....
So you've invested all your money on shorting GOOG?
I can imagine that the ones calling for layoffs have always been the stingy kind. They just have a better case now... Execs are just obeying whomever has the strongest voice to ensure their outrageous pays remain unchanged.
Uppity technology specialists are attempting to upend the system and take a seat at the table. They have to be shown their place occasionally to remind them who is in charge.
We are? Seems to me like the folks down at the Starbucks are the ones doing the hard work. https://en.wikipedia.org/wiki/Starbucks_unions
Why is it that the C-suite folks, who are supposed to understand macroeconomic trends or "Economics 101" as you're calling it, didn't see this coming and didn't make better decisions to not over-hire and mitigate reactionary cost-cutting. These companies have billions of cash on hand, but they choose the easy short term route of slashing labor costs to appease shareholders. I would argue this is a terrible long term solution on growth and profits (despite the shareholders impatience.
Besides even the big tech employees are closer to the average American worker than C-suite folks if you look at median salaries. You're talking down to a large group of people as if you somehow saw it coming before everyone else?
spending it instead on $30 door dashed organic salads
This is effectively the same argument as the one made by the Avocado Toast guy, and it's out of touch. You can empathize with folks that make less than you and still criticize the action of management that could have had the foresight to prioritize people over profit, but chose not to out of greed.
That means that making any group of stockholders unhappy risks reducing their earnings. Many stockholders don't understand macroeconomics. Many see the news and start calling for action, however misguided.
When enough demand action, the C-suite is forced to act, even when they know the actions are symbolic at best or counterproductive at worst.
That's assuming they know best. The C-suite command their salaries not because of what they know, but because of who they know. So making economic predictions may not be their strength.
This is literally the opposite point of this:
If you don’t understand how economics 101 works, you probably didn’t deserve your high paying tech job,
Why not apply the same logic to tne C-suite folks rather than just individual contributors or the regular rank and file. Why are tech workers who exchange their labor and knowledge of working with technology dummies if they "don't understand the fed" (which I can guarantee you is not an expectation when working as a software engineer, product manager, etc.), but the C-suite gets a pass? Arguably the execs should understand how to navigate different economic climates if they get a leadership role, regardless of who they know. Also on an anecdotal note, every job I've ever gotten I've had to know someone, whether it be someone who works there or a recruiter, and I'm a worker in tech. So that argument doesn't hold up from my point of view.
Maybe you are an executive, or someone who has an acquired a taste for their carpet-protected rubber soles, and it's just a difference in opinion. But it seems to me by your own logic the executives are even dumber than the workers, there's really no reason for the original commenter to be so hostile. The whole point of the article is that it satirizes the decisions tech CEO's make because they are completely driven by the shareholder, but they are also major shareholders whose compensation is in equity.
Many stockholders don't understand macroeconomics
Including the C-Suite, they are forced to act out of their own self-preservation, which after a certain point, is just pure greed.
Why do you think people pay so much attention to the fomc meetings and the data they use, and minor off the cuff statements by kashkari or Powell, or any of them, will without exception send the market into a tailspin?
The fed controls the value of money, and that controls the employment rate, which is what influences hiring/firing decisions. It’s simple high school economics.
I think it will be ok.
More like cutting of fingers. Layoffs at mass scale are not "low performers" or individuals that are (as individuals) redundant. It is just people picked in some Excel sheet.
Companies are like sociopaths, so employees must act like sociopaths too when interacting with them.
Anyway, it's not even close to a secret, it even has numerous articles across NYT, Yahoo, Forbes, etc.
https://en.wikipedia.org/wiki/Cinque_Terre
TIL!
You can have stability where companies don't have the crazy layoffs and insane pay discrepancies, but it might come at the cost of less hiring in the first place, more modest salaries all around, and probably less risk taking and therefore less productivity in general. If you don't think productivity matters ask yourself what products or technologies really do make the world a better place right now, and if you'd be okay with never having those developed in the first place.
Maybe there's a way to make things better without sacrificing productivity. But let's not kid ourselves and pretend that simply expecting executives to "stop being greedy" is a realistic expectation.
Further, there’s a good chance that the execs have taken it into consideration already, IE they need an 8% reduction so they layoff 6% and assume 2% through attrition.
The skeptic in me also suspects that this isn’t just about cutting expenses - they’re wanting to send a message to those who remain that it’s time to get to work and achieve some results. IMO it actually ends up demotivating and turns people away from trusting the org, but rather prepping to jump ship.
Layoffs are the way to lose your least talented and motivated workers.
> Silicon Valley - Gavin firing Nucleus
Layoffs suck, been there done that, but they're a good chance for everyone to reconfigure in a better configuration.
It's also not a good system of capital distribution for optimal real-world results, aka progress, due to the tendency towards the creation of stagnant monopolies, but state-run systems are not much better (or different). It doesn't matter much whether the Central Committee in charge of capital distribution is a Wall Street investor conglomerate or a Soviet cabinent of ministers, both systems have same structural flaws.
They don’t hate us, they don’t love us. They keep us around as long as we’re useful and then dispose of us after that point. The fact that corporations are made of meat doesn’t change the ultimate reward function that they all must follow: maximize profit, laws and negative externalities be damned.
Much like the simulation hypothesis, "super intelligent AI" is more religion than reality at this point.
Stopped reading there...
There aren't many solutions to this problem besides better voluntary ethical treatment of employees or compulsory enforcement via a set of professional standards set by a 'management body', a 'management regulator' or well written employment laws.
However, having said this, I don't think many US based management or executives would want to be constrained in this way due to cultural perspectives around capitalism. I've spent a lot of time thinking why socialist policies are part of the zeitgeist in the UK but not the US. I think it's due to a historical hangover of industrialization and having a society where there was the rapid exploitation of workers and especially children. I think socialism in the form of worker rights and healthcare was an upper-society response to squalor and destitution being in the face of the political elite in London. My somewhat jaded view is that socialist policies in the UK are setup so that instead of the wealthy paying for a greater proportion of the negative externalities caused by industrialization and capitalism, everyone, would pay in an "equal" way. However equal isn't quite equitable because National Insurance employee deductions are capped out at 2% above a salary threshold of £4,189 a month.
No I'm not saying capitalism is bad or that socialism doesn't have problems. I think free market capitalism is good in many cases, it just needs to be constrained by high ethical standards. However, I don't think free market capitalism can solve all the challenges we face in society and Western democracies need a Government mechanism to address wealth inequality otherwise the foundations of society start to break down.
In comparison the US, with it's vast land mass and varied dispersed resources, industrialized in a more distributed way, the exploitive effect of industrialization was far away from Washington DC. Even now I think US politicians still don't viscerally understand the human suffering caused by the hollowing out of blue collar jobs due to globalization.
For a time I thought 'triple bottom line' might work, but it seems like ESG has taken over with an emphasis on the environment and not people. While I care deeply about Mother Earth, realistically I think people who are struggling to survive have no mental space to consider their environmental impact.
...a labor union?
They weren't. The upper classes did everything in their power to prevent the plebs from getting ANY right whatsoever. Churchill even sicced the military at the striking workers at the turn of the century.
All of those gains were made by the people fighting tooth and nail. Especially after Ww II, when the USSR did not 'just collapse because socialism is not sustainable' like the British press was screaming about during the interwar years, it made a great case for the people pushing their agenda and the Labour party was able to do all the reforms that the neoliberals have been bit by bit dismantling over the last 40 years.
What an utter lack of self-awareness. You guys are some of the best compensated workers in the entire world. At least have some decency not to bring the "little girl who has cancer" into it.
I suppose the author didn't want to sound racist or the equivalent that concerns people of the same skin tone but, somehow, different economic situations and options in life, but over here in Eastern Europe Google and Amazon have been hiring all this time.
> ...complicated global factors like [one], [two], and my desire for a marble kitchen island with a waterfall edge. As we all know, our competitors are relentless. Even as we speak, they’re [one], [two], and booking the best contractors in the Bay Area for the next eighteen months.
The author is a really clever writer. It's a short text but it's packed with little details like that, and shows a great understanding of the tech enterprise domain.
So let's quit pretending employees are holier than employers.
> So let's quit pretending employees are holier than employers.
I haven't seen anyone stating this, or even implying it.
I do see employees (people) as more worthy of sympathy than corporations.
This is important to understand because it relates to why there are layoffs now: the managerial class hates when normal workers have negotiating clout. Layoffs remove that clout by cooling the job market and making existing employees afraid to leave or ask for market rate pay.
This is important for most HN readers to understand: there’s been a long tech boom where we’ve had above average pay & benefits due to demand. This has lead a lot of us to think we’re part of the upper crust at companies because we’re paid and treated better, and that this is the natural order of things. Few C-level managers agree but they’re definitely hoping we continue to believe it and don’t unionize.
They haven't. They won't. This is the world the wealthy have created for themselves. People who aren't allowed to have skin in the game shouldn't pretend like they do for the rich who build wealth off of their labor.
In 22: Meta hired 12K+ Netflix 2k+ Google 20K+ Amazon 300K+ (!)
But oh me oh my the free market that lets the companies hire lets them fire. Evil money man used to give me money to get compensation, that is good greed. Now evil money man wants to take away money to get compensation that is bad greed angry face emoji
Those were the first two I checked and they're massively off, so I'm inclined to think the rest of your argument is also in bad faith or misinformed.
We can disagree on the interpretations but let's at least agree on the numbers. I will not accuse you of being neither misinformed nor in bad faith if you rectify your comment as to not spread misinformation :)
https://www.macrotrends.net/stocks/charts/AMZN/amazon/number... https://en.wikipedia.org/wiki/Amazon_(company)