Tech CEOs Should Be Held Accountable, or Even Fired, Amid Layoffs

Yes, they all egregiously failed. A massive, widespread, collective failure for which they should lose their jobs, as many other people do. On the face of it, it was obvious, that's not even hindsight bias - it was the topsy turvy world that bad news meant good news for stocks and S&P 500 CEOs that persisted for nigh on 15 years that was weird and had to end sooner rather than later.

What happens if the COVID lockdown demand surge happens and companies don’t hire?

Customers don’t get what they want. Businesses that want to move online can’t or have a worse experience. The companies themselves are under-resourced for the actual demand and can’t invest in the future of their business because they’re struggling to keep the lights on.

I understand people are pissed about layoffs. Entirely reasonable, and as someone laid off I can empathize. But at the same time, COVID was kind of a black swan event. No one know what would happen and companies made their best guesses. Many were wrong! And that’s fine.

For public companies, there was public information about their strategies and the bets they were taking. For private companies, it probably depends on what they’d share during hiring. I knew going into Stripe in January 2022 what their bets were, my confidence level in leadership, and my personal risk tolerance for an uncertain future.

We shouldn’t be ripping companies apart when they’re wrong. At least not with over-hiring that had a plausible justification behind it. I don’t want to work for a CEO who doesn’t take risks. I don’t believe that’s better for the world.

I call bullshit. If you did you'd quit in shame.

I think where this is really stemming from is that these market swings hurt people, and those being hurt feel the CEO should share in that. And there is merit to that argument, that austerity measures should impact CEOs and upper management just like they do the lower ranks, regardless of fault. These people are in a better financial position to weather the swings. Their compensation has a lot more margin or "fat" to cut into before it becomes painful, and thus can save a number of jobs that might otherwise have to be cut. Most importantly it shows solidarity with the workforce. It makes it feel more like this is an external event that is happening to us, not something that the CEO is inflicting on the staff.

This can be simplified to market reading. People in finance get fired for getting this wrong all the time. Michael Burry was told investors lacked confidence in his ability to read markets and was on the brink of divestiture during his short.

I think it's fair to say that's what we pay CEOs the big bucks to do, and if they fail to do it it's fair we ask for ramifications. I'm more startled by the comments who would like to preserve someone who makes millions, is already set for life, and often displays an inability to relate to the front line workers they're supposed to represent.

Should a CEO be allowed to get calls wrong, sure. Should they get paid 200 million when they do? No. Should they get paid 200 million ever? No.

Shareholders should be suing every company that does this until it stops, imho.

You don't need to be paid a +$200M salary to know that pandemics end.

And now these same people have the audacity to bitch that the very employers they've been strategically milking with their Machiavellian labor market plays would realize their mistake.

No. Full stop. To these people I say:

You've been paid $300-400k in total comp for a decade to build platforms that have DEGRADED the society we live in. You have extracted maximum rents from a job market that favored you, to provide NEGATIVE value to society, all while looking down your nose at lowly plumbers, carpenters, and those subhumans in flyover country who grow your food, mine your copper, and produce your electricity. Now the job market no longer favors you, and you, of course, regard this as the fault of everyone else. Fuck off. Fuck right off, right now.

If this were true, should not companies hire now, thinking long term, like Google did in the last crisis circa 2008?

It looks like most companies hire or fire not for today, but for next quarter.

This sounds like what you said it wasnt, "hiring for today."

What you’re missing here is that it’s their job to be correct.

Covid was, perhaps, unpredictable but the end of Covid wasn’t.

Of course, accurately predicting the future is very difficult but these are the highest paid people in the entire world. They should be able to do very difficult things to dramatically help their businesses, that’s why they make the big bucks. If they aren’t performing they should be replaced by someone better. Otherwise what we have is cronyism and not capitalism.

I guess the question is whether leadership could have anticipated a retraction of the economy just a few years later. But this made me think of another question. How much job security can we reasonably expect in the first place? If we want jobs to be secure, then that needs to be legislated or people need to unionize (and take the pay cut). I'm aware that I have no say in how the business is run and I can basically be let go either anytime or within a short time and I need to prepare myself for that.

This is the kicker for me. C-levels assuming that a once-in-a-lifetime pandemic leading to online growth would sustain for the next decade. They should make 10Y plans, not 1Q based ones.

Quite hilariously engineers are going to be measured by "productive commits" soon, but I saw no guidance created to measure how managers are providing value

Being a steward of an already-giant company...one that has product-market fit, reliable sales/distribution channels, household brand awareness, and a position of gravity in the markets...is infinitely easier than building something from scratch.

Nobody who was employee #1567 should ever be granted $10M+ of equity in a business they didn't build.

It's quite literally stealing from public investors, and boards only enable this because they're incestuously composed of fellow managerial-club members.

That's not the director's problem, so why would anyone point the finger at them? Competent directors have a lot to do, albeit mostly behind the scenes to the average employee. If they don't have a lot to do, then the problem is up the chain.

This is a poor take. The function of the CEO of a publicly traded company is to execute on major objectives of the firm. This might be optimizing for max profit, but it might not, depending on what your majority shareholders communicate to the board and management (as well as how they vote their shares).

Agree with the rest of your comment that you have to reach a better power equilibrium between labor, management, and shareholders (who should also be employees to some degree, aligning interests and all that jazz).

The board might not care about this though. Maybe they even intentionally put themselves in risky positions with too many employees because they see employees as easily disposable.

Something must have gone wrong if you hire 1000 and then fire 1000 a year later. And no, it's not "the economy" for every single (extremely diverse industry) tech company.

They laid off people who had little to zero influence in defining the company mission, trying to cut spending. This suggests that the C-suite over-spent.

> Blaming the CEO for doing the job they were hired to do seems short-sighted. Blame the broken system that incentivizes this, that makes doing it profitable.

You can do both. A CEO would not need to lay off people if their long term plans worked accordingly, which means that they suck at their job. It's easy being the boss when everything goes fine and everyone buys your stuff. When things turn rough, these CEOs would issue a sorrowful apology, lay off tens of thousands, and still pocket hundreds of millions for the foreseeable future.

At what timescale?

Firing the whole company would save a whole lot of money at the detriment of destroying the company.

Or are we looking at just a quarter? There's plenty of terrible choices that will net a whole pile of profit in the quarter. And it's a string of these quarterly choices are what brought Sears, Toys-R-Us, and other vulture capital mediated destruction that a LOT of quarterly gains. And there's also just making terrible business decisions like Netflix updated account rules (Whoop, accidentally posted... sure).

How about a year? If your company has existed that long, you're still trying to fit in and make your niche. But if you've been around for decades, a year is still super short-sighted. Its very hard to gain respect, and very easy to destroy it over night.

5 years? That's the absolute maximum US stock markets look at. Which means nothing past 5y is "calculable". Long term choices aren't a thing.

I find that to be ironic. One of the problems with a CEO is that they'll maximize short-run profit rather than do what's in the best interest of the shareholders.

How is failing to predict market conditions a few months into the future and over hiring part of making a publicly traded company money? If anything, these layoffs are an admission from management that they're wasting money.

So, make "as much money as possible" while building a solid and sustainable business long-term, or make as much money as possible within a quarter or two and then walk away from ruins with a fat bonus for a handful of people? Because we have seen this before, and it ends with gutted, non-competitive husks of companies - GE, Boeing, to name a couple.

This idea that the shareholders need to get 10x returns even if it means a destroyed business has gone out of control. Pure capitalism is bad enough, but mix insatiable instant gratification, and it's completely destructive.

Ok. By hiring too many people in the last couple of years and therefore now needing to incur the expenses and reputation hits of layoffs, those CEOs screwed up and fell short of their goals, right? So maybe they aren’t the best people for those jobs?

Arguably, their goal is to maximize share price because most of their "income" is paid in shares.

An argument can be made that they are not acting rationally by laying off so many employees.

How about ... get ready for a taboo word in hi-tech: unionized? at a certain size, a hi-tech company must face labour union?

Before anyone suggests that Union protect low performer and penalized high performer, keep in mind that right now, at this moment, high performers are culled left and right in FAANG because their salary is too high.

High performers also gravitated towards "cool new projects" that are getting wiped out as well. "High performers" know that if they performed well, they will get paid more, simple. They know the game so they will choose greenfield/moonshot projects (zero maintenance, more output regardless the biz-ROI).

Also on the topic of Union pushes Offshore/Outsource => already happened for some of these FAANGs anyway. Amazon India salary is going up up up up up up to a point where it is close to US salary.

The orgy of tech hiring with the objective of denying candidates to other companies is evidence that the large tech CEOs no longer feel beholden to that. Automotive CEOs do, hence the COVID “we love you, remember us” ads, followed by shooting themselves in the head by breaking their supply chains.

Perhaps the "best way" was to make better staffing decisions, which a lot of these C teams failed at spectacularly.

I’m all for smaller changes occurring where possible, like worker reps on boards, more employee ownership, wealth taxes—something is better than nothing—but we won’t change the fact that power compounds, and gaining enough power allows you to evade all those rules such that those incentives don’t matter at a certain point. Changing that requires more chaos and uncertainty than most people have an appetite for today, and we should all be clear-eyed about that when saying things like “let’s change the system.” I believe it will change and we can change it, but I also believe it can only happen in response to trauma.

And more to the point, "I was following incentives" is no different from "I was following orders." It doesn't become suddenly okay to do harm just because there's an incentive to do harm.

Hacker News and corporate culture in general are toxic because of people blaming market conditions instead of taking responsibility for their own actions.

You're literally just saying we can't disincentivize sociopathic behavior, because those behaving sociopathically are just following incentives.

You can't have the benefits of go-go-gang-busters hiring sprees without sometimes having layoffs, IMO.

Because you don't want to harm people.

When the pandemic hit, car manufacturers saw travel plummet and decided that car sales would also plummet for the foreseeable future.

The executives in charge of the auto manufacturers responded by cancelling huge swaths of orders with their suppliers, believing that the new market conditions would be persistent.

18 months later, with vaccines arriving, demand for cars spikes. Auto manufacturers panic, and rush to place new orders with their foundries, who found new customers and now have 24-month lead times.

The MBAs shrug and say that there is no way anybody could have predicted this: after all, their competitors are in the same boat. They jack up prices and reap the rewards of their poor decision making, but the company and consumers would both be in a much better position if the executives had done their job properly instead of hammering the panic button.

Maybe this lack of accountability at the top is a deeper, more systemic issue.

Agreed with your argument, and taking it a step further, not only did they take advantage of the market conditions, they were forced to do so or face getting fired themselves. When your competitor is rapidly expanding, and/or you are not showing the revenue growth that the market is awarding, you get the boot.

Agreed, although I don't suppose I'll ever see a post on HN with people angrily calling for the firing of Tech CEOs for hiring too many people at potentially higher salaries than their "worth" to the rest of the market.

Really? My epiphanic assessment from working in corporate America is that the single biggest challenge for American capitalism is that it's very difficult to fire people. That is, there is much more organizational friction in making a decision to fire, than to make a decision to hire.

Even in at-will states, big companies require months or even years of "paper trail" to fire a non-performant or harmful employee. Notably, Amazon's aggressive PIP system seems to be specifically designed from the ground up to counter this problem, and even they seem to be dialing down the aggressiveness because of bad PR.

How do you define "demand" in the context of SaaS? How many engineers do you need to run Google Search? Or Facebook? Or Spotify? Did the demand increase in the past five years? Have it decreased in the last year or so?

Here's the thing. None of these companies (Google, Meta, Spotify) have reported losses, not even a significant decrease in revenue over five years. They took the past year results, they saw a decrease in revenue, and they proceeded to lay off people. Google itself had a Q4 '22 revenue in line with the past years, except for the anomaly in Q4 '21 [0].

> If leaders expect to be fired if employees are ever laid off, then they will avoid hiring in the first place.

You are saying that the people appointed as the better at foreseeing market trends, and taking higher risks for higher benefits, will do neither of those? Then why do we need them in the first place? They would be useless.

> Unemployment today in the US is less than 3.5%! It's good for workers—and good for the economy generally—that managers are willing to hire people they may need to fire later on if things don't work out. Otherwise, those jobs wouldn't even exist in the first place.

You are conflating several things here - unemployment, workers' rights, and economy of scale. They are not necessarily connected, e.g. lower unemployment and higher wages don't push managers to take risks on massive hirings.

[0] https://www.statista.com/statistics/267606/quarterly-revenue...

And low unemployment in the USA means many people working > 2 jobs, without benefits, just to keep a roof over their heads.

As an analogy: socialism has many benefits. But the major downside is that it usually requires a roughly 6 hour daily commitment from every worker. I think that we subconsciously react to that loss of autonomy, and it comes out as projection. Like: taxes would be so high! We'd never be able to see a doctor! We'd be at risk of dictatorship! And various other distractions. When the truth is, most of us are so marginalized in the US that we can't see how our individual suffering might be alleviated if we focused on shared prosperity. So we make fun of any alternative.

I might suggest that a union could only fly if it transcended individual employers. So don't think Starbucks union, think service worker union. If one company does layoffs, the rest of the workers could pull the plug and all choose to move to another company for temporary reduced pay. Or by earning double income by participating in the union, workers would have enough capital to start a new company.

Anonymity would also be key. We should have the right to start and stop employment on our terms, picking up odd contracts here and there, without committing to any employer. The burden of managing that risk should fall on the union, not the individual.

We might also demand no distinction between remote and office work. Instead, we could work towards telepresence and delegating to robots, like with remote surgery. If that's possible, surely we can answer calls remotely.

A few links from searching for "union workers rights":

https://www.dol.gov/general/workcenter/unions-101

https://newsguild.org/union-member-rights-in-the-workplace/

https://www.dol.gov/agencies/olms/compliance-assistance/publ...

What else might be desirable in tech? Assuming that this will all be automated by the end of the decade, what other protections might be needed to safeguard our livelihoods? Even outside of unions, this should be forefront in our minds.

Agreed, but the idea that CEOs are somehow not part of this group is a bit bizarre, particularly when you consider that a large part of CEO compensation is often stock or stock options. You can't exonerate CEOs by blaming shareholders when CEOs are generally shareholders.

A CEO doesn't have any obligation to the workers; they are beholden to the company.