The CEO answers to the board, and the board is usually of the type to at least ask the question "Everyone is jumping off a bridge, why aren't we?"
And sadly the easiest answer is "we ARE jumping off the bridge, see?"
And sadly the easiest answer is "we ARE jumping off the bridge, see?"
I think it has more to do with cheap money not being cheap anymore.
[1] https://www.fxempire.com/macro/united-states/interest-rate
https://hbr.org/2018/05/layoffs-that-dont-break-your-company
https://hbr.org/2022/12/what-companies-still-get-wrong-about...
Something like each team is maintaining themselves at a proper rate, laying off inside the team as necessary. But even then you will at times have to fire entire teams, but those aren't really a "mass layoff" so much as "we're not doing X anymore".
Granted, getting into that situation was probably "executives making stupid mistakes" -- seems like it usually is -- and granted, they're probably not saying "we have to do these layoffs because I was an idiot last year", and they're probably not taking commensurate pay cuts. But still. It can certainly and obviously be good for the company's health to have fewer people on its payroll.
Well, the evidence is that mass layoffs aren't having the result of being very positive for companies that engage in them.
Given that what you say also feels true, in my experience, an explanation immediately suggests itself:
Big companies rarely if ever manage to mass lay off only unproductive staff, or net-drain internal orgs. Rather, they're almost always implemented as an across-board X% haircut for most departments with little targeting whatsoever. So in the end, they don't solve the problem you're identifying, and that's why the evidence says they end up doing nothing positive for the company.
And I'd also suggest that very few, if at all, employees has zero contribution. It's just that some of those contributions are invisible to you.
It may be unpopular to say this, but of course it does. Just hire more people if you need to and hope that you're making the right decision. Yes, it has a terrible effect on employee morale, but that's a tough thing to quantify so it won't show up on the balance sheet.
It's too soon to know if the impact of layoffs on most of the companies doing them is positive or not. twitter is an anomaly: that was driven by basic stupidity!
When the $BIGCO I worked for was acquired, instructions were to cut 8% headcount across the board. We were explicitly told that they expected that some valuable people would be cut accidentally, but that's unfortunate. No one should be unreplaceable and if they really are, this is a way to find out and change processes so it can't happen again.
All humans are not just FutureRedundantWetwareMeatsacks that the all knowing bean counters can move around on a board. In reality business is about relationship/small detail institutional knowledge silo'd in individuals/humans proactively getting done what needs doing, many details that get poorly caught by tribal documentation systems.
If your people are truly cogs you don't have a business, you have a franchise, and anyone else can do the cookie cutter things your business is doing, and most likely better/cheaper/flashier. But for some reason HK and all these companies doing layoffs either don't understand that, or they WANT to turn their company into a generic franchise where everyone is interchangeable and lose the flexibility/capability/competency that being a business of interconnected humans gives.
It’s tough. Look at Amazon. They cull the bottom 5% every year. It has a negative affect on morale because everyone is continuously on edge and having a bad month or two can be dangerous. Look at a layoff, it craters morale and reduces productivity.
The best bet seems to be to grow slow, hire and retain the best, and fire the low performers only as needed.
After that, look at corporate giants like IBM. They are laying off, yes, but historically they just lurched along, providing a paycheck to everyone.
There were a couple of dubious episodes, though, where a bad manager tried to do something to people they didn't like. Sometimes it worked (aka, negatively affected people) and sometimes the manager got in trouble instead. So it's not like all good. But it was heavily dependent on the managers you ended up under.
Also if your strategy is to hire as many engineers as you can possibly afford so that you can keep up with or beat the competition, then if the competition starts downsizing it means you can do the same, and maybe you see an economic contraction as a bigger risk.
Conjecture of course, but plausible I think.
I'm unfamiliar with this term and a quick search didn't produce any meaningful results.
What is it?
At the moment it's also the most reliable source of information for what happens across Google's PAs (Product Areas).
Why do you think you know what is in Google's best long-term interest? Do you think you could run the company?
Facebook is about the only company attempting to do this at the size of the big tech companies with Oculus. I think because it’s viewed as an existential threat that they otherwise don’t have their own platform so temporary headwinds / market punishing them for investing so heavily is less a concern for the board and Mark. Ford had to outsource this with Cruise and it’s a delicate balance even then. Apple is interesting to watch because they make very few moves in public that it’s hard to see what’s going on even from the inside in terms of innovation. Toyota is an example of taking a bad “market risk” investing into hydrogen although I think that’s an example of either saving face until they fix their EV story, truly making a misstep, or the story being misreported (eg hydrogen for fleet vehicles and trucks but EV for individuals).
I disagree. Search was the original product, and since then, Google has launched the following other products/technologies that I would also describe as revolutionary: Gmail, Maps, Android, Chrome, Ads/AdSense, YouTube (depending on who you give credit to), MapReduce, Kubernetes, TPUs, TensorFlow, and I'm sure I'm missing some.
The trajectory of these revolutionary launches over time does seem to be decelerating though even as the company gets larger. And with these layoffs it'll likely get even worse, not better.
I'm talking about the next category of innovation down, whatever you want to call it if you feel "revolutionary" needs to be reserved for generation-defining technologies. Because with your current definition, the vast majority of even large tech companies will never have a product that meets it.
1. There’s ML research that clearly shows that you can convert video streams into neural nets that only need to transmit a very small amount of bandwidth for a high quality construction on the remote. Why didn’t this research come out of Google which has gobs of people working on the space? Why hasn’t the Meet team figured out how to get this into customers hands? Certainly the hardware for it exists and it would drastically change what a video call experience looks like.
2. They abandoned Google glass (correctly - that was a terrible product) and their VR in favor of sitting back and watching what others accomplish to then copy cat what a successful product would look like. Why didn’t they wait for in-lens displays while continuing to invest in the R&D of the product itself?
3. Android is a know memory hog. Android phones require 2x the amount of RAM as an iPhone for the same performance. Why hasn’t Google figured out how to bridge this gap? This is also a big reason why they’re watches struggle.
4. I was advocating to an SVP that Google should release a wearable digital watch/fitness band that’s a very basic experience focused on actual value add instead of a smartwatch: an SE so that Google Pay works without needing internet connectivity, mDL integrated, BT phone calls for the cellular enabled version, basic fitness sensors. It was shot down because he didn’t think it could make his P&Ls only for the SVP to later publicly call out the Android SVP for “why did Apple get to mDL first” ignoring that I was the first Bay Area engineer on the ISO committee.
5. Google took a long time to materialize their in-house CPU and it’s largely been underwhelming I think compared to what Apple’s been doing. Of course they started not too long ago (very late) and are copying Apple’s playbook so not sure how innovative. But for a company that’s been making their own HW since forever…it took them a long time just to make the decision to copy. There’s a lot of cool buzzwords but hard to compare value. Disruptive play: compete with Qualcomm here.
6. Fiber: gave up instead of figuring out how to outcompete telco business practices only to resurrect it again.
7. Stadia: instead of going with a disruptive Netflix-like business model and eating the upfront costs to publishers, they tried and failed. There’s a theme here that Rick is not cut up for anything more innovative than managing mature P&L products.
Then there’s all the dead end projects that they refuse to can because they are unlikely to deliver on the vision. Most of their efforts around “health” are vanity efforts that don’t require the amount of man hours being invested (certainly not rolled up under the commercial health app product line). Or at least this was the case many years ago - not sure about now. They talked a huge game about all the things they were going to enable and have a proven track record of not being able to deliver on any of them. X is neat pie in the sky ideas that never materialize. Moonshot ideas actually require you to get to the moon once. Don’t think any of that has ever come out of X.
Deep mind is probably the best innovative jewel in Google’s arsenal. Most of their magic comes from keeping Google disease at arm’s length. It might be interesting to see a Google with Demis Hassabis at the helm and a mandate to bring back some innovation to Google.
And to be clear. I’m not talking about technical infrastructure pieces (eg k8s was kept in house for forever as Borg and then an open source version was built when it was clear they could sell it). Google has a lot of good pieces there and whether or not you can scale is mostly (but not fully) question of being right. When it’s a question of being right on a binary question, these soft politics phenomena disappear because reality is immune to that.
However.
Search: yes. Their first product alongside ads. Today it still represents something like 80% of ALL Alphabet revenue (and probably a much larger share of the profit provided). Anyway, bad example because search and ads were developed when the company was a startup. By necessity that’s your high risk bet.
Gmail: yes. Still early enough in the company’s DNA to take a bold bet. They’ve totally failed that space though by failing to invest and take gambles. Back in the day this also captured almost all IM traffic because EVERYONE had gmail. Now you might get a fresh can of paint every once in a while but there’s nothing bold. The reason? You have billions of users: if you make any meaningful change you’ll lose the ones that aren’t early adopters, especially if a change in direction has instability or feature loss (see Inbox). See their total incoherence on what to do about messaging, a problem they wouldn’t even have if they continued to take risks and innovate a decade prior.
Orkut: they could have had a social network. Gave up on it before truly figuring out how to make it work. Then G+ as an emergency Hail Mary that went nowhere for many reasons, not least of which is that bold risks need to still start small and grow and they went immediately for the billion+ market (notice the copy of GMails rollout strategy that was a poor imitation and failed to realize why that worked - cache and buzz driving “must have this” demand instead of a product copy that was meh and invitations that were more just how far away you were from the elite).
Speaking of social. Google Wave. See: Slack eating their lunch here. Heck, even FB workplace is miles ahead of Google Chat which still can’t figure out scrolling, scheduling posts and reminders, and requesting messages to be silent.
Maps: yes, fantastic. They’ve failed to keep innovating and taking bets here though. Notice the acquisition of Waze. In the long run, expect Maps to falter. The only saving grace is that Maps is important to their ad strategy so as long as users and revenue are aligned they won’t let it get too bad.
Android: first, acquisition. 2. Bold bet that had leadership buy-in for same reason as Oculus at FB - you have to own the platform if you’re an advertising company as otherwise the owner of the platform has you by the balls. See Chrome.
Chrome: yup. Fantastic innovative bold product at launch. Since then, mediocre incremental value with no new bold risk-taking ideas (unless you count pissing off loyal users and enthusiasts).
Ads/Adsense: see above. Too early in the company’s life + it’s 80% of their revenue. They don’t take any bold bets with this cash cow.
YouTube: acquisition. See above - failure to capitalize on social graph, failure to take meaningful innovation risks instead of slowly and methodically growing the business.
MapReduce: neat technical idea that actually preexisted Google’s idea. Google has largely abandoned it anyway afaik as other techniques work better / have better modern tools.
Spanner: this one has some staying power and is innovative but it feels like they continue to fail to innovate here.
TPUs: not bold or revolutionary. Take existing embarrassingly parallel problem you’re running on GPUs and build an ASIC. They’ve done excellent innovation and technical work here. Don’t get me wrong. But it’s not been a huge risky bet leading the market (and they don’t even sell TPUs as standalone units you can buy which would be truly a risky bet to eat their own cloud offering).
So in essence, they’ve always been slowing down for a long time and most of the things you listed as big risky bets just aren’t that. Certainly none of the technical stuff - that’s driven by in-house demand / obvious market demand. I’m talking about changing the rules of the market. If you own the market you’re not going to change the rules because you might not end up on top. See Clayton Christensen. I do think we should limit the ability for a market leader to enter new spaces though and how much they can charge. Once you’re big your ability to manipulate the markets creates meaningful market inefficiencies. The common belief is that these get sorted out over time but I’m not so sure / I’m not sure that regulations can’t help shorten how long market inefficiencies promulgate.
If you had a healthy business and do a mass layoff, you don't have a healthy business anymore.