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Comment by MuffinFlavored | Hacker News Reader

> multiple rounds of cuts are a big failure of leadership.

Not to be ultra cynical but why waste effort calling this out? What accountability is going to happen?

They got hired for leadership roles. They make big leadership money total compensation. Then, they make business 101 mistakes (don't over hire during COVID under the expectation that the escalated demand will remain permanently forever), then nothing happens to them and they continue making big money.

Is that not more or less how this is playing out?

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> They got hired for leadership roles. They make big leadership money total compensation. Then, they make business 101 mistakes (don't over hire during COVID under the expectation that the escalated demand will remain permanently forever), then nothing happens to them and they continue making big money. Is that not more or less how this is playing out?

You forgot the part where right before he did all of that, he made Facebook, one of the biggest money printing machines on the planet of its time. Even after all the mistakes, Zuck is still vastly net positive (from a business perspective).

> Even after all the mistakes, Zuck is still vastly net positive (from a business perspective).

So were many of the employees who were and will be laid off. Isn't business more about "what have you done for me lately"?

Allow Facebook to stagnate while Zuck focuses on the Metaverse.

My read was that as long as the money printing machine is running, Zuck can do whatever random side project he wants. Once it starts struggling (ad tracking, macro environment), shit gets real, and not just for the company, but also Zuck.

>>Once it starts struggling (ad tracking, macro environment), shit gets real, and not just for the company, but also Zuck.

This might apply to other companies that don't have founder-majority ownership, but that's not the case with Meta because Zuck still retains control with over 50% voting power.[1]

[1] https://www.reuters.com/breakingviews/zuckerberg-motivates-s...

>Even after all the mistakes, Zuck is still vastly net positive (from a business perspective).

Zuck didn't do anything, except maybe put the organization in place to succeed (though most would argue that was Sandberg)

I don't think that's fair. Sheryl definitely made the business/ops side work, but Zuck definitely made the product/infra side work.

Neither of them are perfect, but they had a really good division of responsibilities that worked for over a decade.

Let's set aside that it's Meta for a moment. Any company with multiple rounds of layoffs is unhealthy. Think Chrysler in the 70's pre Iacocca. They face troubles that leadership is incapable of handling. Companies like that get sold and broken out for parts. Or, some have major shakeups with leadership and come back as something else.

Meta, of course, is different. Leadership made a few mistakes, sure, but they're more than ready to cope with changes to social media in the face of tools like ChatGPT available to everyone. Facebook and Instagram will continue to provide excellent paths for advertisers to target consumers. And you can be sure they're innovating behind the scenes. Surely we'll see powerful new products and innovations in the coming months and years.

Meta, of course, is different.

Is it, really? All the "tech innovation" and "too big to fail" talk was said about Chrysler, too.

Lots of people look at Meta through HN-tinted glasses. It's still just a company, like any other.

For the whole second paragraph citations are sorely needed. This reads like something you would read on a nervous META stockholder forum.

I agree with you but I'd imagine new tech like chatgpt won't interject in a user's interactions with facebook and instagram as it does with google where I ask my AI for something vs. search for it in google.

How will chatgpt make money if it doesn’t?

Subscriptions? Potentially the language model can give different answers and the highest bidder is the one that rises to prominence? Who knows... OpenAI was originally supposed to be a non-profit. The language model is essentially the sum total of the content of the internet which humanity up til now has contributed to so not sure we should be charged.

> Surely we'll see powerful new products and innovations in the coming months and years.

That's a lot of wishful thinking for an enormous enterprise loaded up with red tape, regulatory entities breathing down their necks, a whole-company strategy going exactly nowhere, and now a bad reputation in this field for repeated layoffs.

> Facebook and Instagram will continue to provide excellent paths for advertisers to target consumers.

This assumes Facebook and Instagram remain the communication and user content hubs they are. But this is not a given, any company asleep at the wheel (remember myspace) risks losing leadership, then users and then money needed to recover. And recent FB escapades suggest that it indeed has a sleeping driver. My 2c.

Their business relies on the whims of fickle consumers not changing, which seems to happen frequently.

Facebook hasn't been cool for a decade+ and usage has dropped a lot in the last few years[1], so all of their eggs are going into baskets that either a) face similar competitive battles (insta v tik tok et al) or b) are gambles (metaverse), other ventures.

Social media, and perhaps the internet at large, seems like it's shaping up to be a lot more ephemeral in nature than we were led to believe when the unicorns were growing up. Not sure how these companies navigate that other than via conglomerate/acquisition style growth.

[1] https://blog.chartbeat.com/2021/06/24/facebook-decline-regio...

I have yet to meet a good leader, coming out of Meta. I worked with several, and all of them share the. same trait - ignore the problem, till it disappears.

They're great to "work" for, but they're horrible at building a team to do work.

I, personally, attribute this to the coasting that Facebook/Meta has been doing for the last 5-7 years. Big product used to provide enough money to literally "rest and vest" for leaders. Leaders that hire people to do complete pointless work, and still have no negative impqact on the company. Now it's all catching up.

This is not the first or the last time we see this kind of situation. ATT, IBM, Microsoft - all have been there, where the money coming in from hit products covered all the ills.

> I have yet to meet a good leader, coming out of Meta. I worked with several, and all of them share the. same trait - ignore the problem, till it disappears.

That's because the good ones don't leave.

More generally, I think that the last few years have been way too easy for FB/Meta (since 2015) and that's why there's so much bloat.

I get why they want to flatten things, but I think they've left it very late and I'm not sure it's gonna work out for them.

> Any company with multiple rounds of layoffs is unhealthy

Isn't this too black and white of a statement? We just got out of a massive money printing/demand spike that was COVID

It's generally agreed upon as business 101 "scale up to capture growth opportunities"

Businesses did that.

Now it's scale down time. Businesses are doing that.

What part of that is unhealthy?

The multiple part is the most important part of the statement you're quoting. The general idea is to cut deeply once so that it never needs to happen again.

I think a huge portion of the balance between "hire / grow head count" and "layoff / shrink head count" is linked to the Federal Funds Rate and whether corporations are ready to get rid of X (where X is the number of people they need to adjust head count wise to account for the Federal Funds Rate going from 0.25% -> 5.25% in 12 months)

Maybe they don't believe the Fed and are hopeful for a pivot?

"Surely we'll see powerful new products and innovations in the coming months and years."

When was the last time FB/Meta released something that qualifies? As opposed to acquiring a company?

It's a one-trick pony, like Google.

Zuck wasn't hired, he founded the company and structured it such that he would always have a majority of voting rights and control over it. It is very, very difficult to remove him unwillingly. If he wants to bet the entire farm on metaverse and sink the company, ruin shareholder value, layoff everyone, etc. then he can and seemingly will do it.

At some point there will probably be moves from hedge funds and big share holders to sue him for breach of fiduciary responsibility. It will be interesting to see how he responds.

Well, they still do have to shed some crocodile tears and make a post claiming that they take "full responsibility".

Perhaps the latter could be outsourced to ChatGPT though.

I'd be surprised if most of those aren't drafted by assistants anyway.

If their compensations are linked to Meta results and stock prices, they are going to pay for that.

You can pass off one round of layoff as having to make a tough decision after overhiring when things looked different. Having to do a second one doesn't look good however. It's basically admitting that you either botched the first one or just realised things are significantly worse than you thought neither of which are particularly appealing to investors.

> They got hired for leadership roles.

Mark Zuckerberg is the founder and CEO of Meta, and owns 55% of the voting shares.

This is a forum that tends to attract entrepreneurs. People that hope to grow something small into something big and learn the lessons that can take them through that journey.

So it seems to me, it's a perfectly reasonable point out failures of business leadership that result in worse business performance, as they see it.

not to be cynical. But presumably many CEOs knew the COVID demands wouldn't last forever, and overhired anyway.

I mean, look at Peleton, did they really think everyone would be locked in their houses for all eternity? No, they took short-term gains deliberately, not caring about the future.

>I mean, look at Peleton, did they really think everyone would be locked in their houses for all eternity?

No. But there was probably a reasonable bet that a lot of people (at least those in comfortable houses) would decide that doing the virtual exercise thing at home really did beat going out to the gym.

One of the things we're seeing right now is that with some exceptions (there's generally more flexibility about going into the office every day than there used to be) the "new normal" looks a lot more like the "old normal" than a lot of people thought it would.

It deserves to be called out as a massive failure on leadership's part. Thousands of people are losing their livelihoods and the image of Meta should reflect that. What do you mean calling this out has no effect?

> It deserves to be called out as a massive failure on leadership's part.

There are other comments here that say this is 100% wrong. It's not a failure at all. They did exactly what they should have/continue to do exactly what they should be doing.

In COVID, it was time to capitalize on growth.

In 5.25% Fed Funds rate time, it's time to shrink.

Leadership is executing/has executed both of those plans.

> What do you mean calling this out has no effect?

What's going to change? You and I and 10,000 people online calling out some random entity we summarize as "leadership" isn't going to change anything going forward. Why waste the energy being mad at random news online that we both sought out/choose to reply to? Miserable way to walk around life.

But did Meta capture anything additional under low interest rates or did they blow billions on Metaverse R&D that never panned out? I heard from someone hired at Google last year that they basically had no work to do. Google kept staffing up, but they didn’t have plans and programs for a lot of these new hires to work on.

What were they capturing exactly?

> What accountability is going to happen?

Women and blacks couldn’t vote back in the day. It’s in the realm of possibility that the society will change and demand leadership accountability.

Zuck didn’t get hired. He owns a controlling interest in the company.

> don't over hire during COVID under the expectation that the escalated demand will remain permanently forever

I don’t think that follows. You want to overhire to make extra profits. Then just downsize when it’s over. Which is almost exactly what all tech companies are doing now.

so in that case, not a failure by leadership whatsoever, it’s actually them doing exactly what they should?

Exactly.

Layoffs aren't a bad thing.

> Layoffs aren't a bad thing.

This very much depends on whose perspective you're looking at them from. They are very much a bad thing for all the workers getting let go.

Probably not all of them. I know a few people happy to get a paid year off

Not in this bad econ timeframe

I guess if you run a warehouse that's true, but Facebook is a tech company. How many thousands of hours were spent recruiting, hiring, onboarding, and training those employees? How much institutional knowledge left with them? How many decisions took longer to make because managers were focused on picking who got laid off instead of focusing on the work? How many managers became hyper-cautious with their planning because they don't know how many employees they will have? How many hours were lost to employees worrying about job security and prospecting for a new job instead of worrying about solving business problems? How many projects got started because there were ample resources that now have to be shut down abruptly?

Large scale hiring and firing in technology is incredibly expensive and not to be taken lightly. Facebook has wasted a huge amount of time, focus, and energy on this and their leadership should absolutely be accountable to shareholders.

It's not just hiring. It's also training and ramp-up.

> How many thousands of hours were spent recruiting, hiring, onboarding, and training those employees?

Of course they are, the issue is that their side-effects aren't easy to track in pure quantitative terms and even less in the short/medium-term.

Layoffs affect morale, in R&D you see that directly on engineers' productivity and how product managers start to behave. PMs either get risk-averse (don't rock the boat, don't mess with profit-making schemes) which stifles innovation, or they get afraid on being on the next round of layoffs if they don't make an impact quickly, they start to push teams to deliver into their reactionary mode, catering more for short-term impact rather than long-term strategic value.

It's a complete mess that you won't see in pure financial terms, it will have long ripple effects into the company, some companies bounce back, others get crippled by those ripples. Employees that aren't engaged and don't trust their employers won't do their best work, employees motivated by anxiety and fear won't produce their best work. They will produce whatever they need to keep employed, that's not the best thing for a company.

> Layoffs affect morale

This is temporary in my experience. Especially in an organization that emerges from layoffs with better financial footing in an growing industry.

Morale doesn’t bounce back when the survivors feel that the industry or company is dying. I doubt Meta and social media is going away anytime soon.

The morale effect is temporary, the ripple effects of it, in my experience, linger for a very long time. That was my point, those are harder to visualise, quantify, but if you live the day-to-day in R&D/operations you see how people react to it over time.

The analogy used in some layoffs discussions of cutting off a limb is fitting here too, your body can still perform some functions but some skills are harder to perform, some movements aren't possible or are very impaired, etc. You are still alive but you aren't the same anymore, for a company it can create really weird side-effects like some examples I brought up on the previous comment.

The limb analogy is apt, but in my experience I’d change the analogy slightly and make the animal losing a limb a dog. There is a saying that “a dog is really a 3-legged animal born with a spare leg”. A three legged dog in a short time adapts and knowing a few tripod pooches in my life, my experience is they get along just fine, and to them, are not impaired compared to their 4 legged counterparts. I think companies are like that too. Layoffs can create definite temporary operational challenges. However, in organizations I have been in that have experienced layoffs, you just adapt and in time and eventually don’t notice the impairment the layoff caused. It’s just the new normal.

Yes. The figure of merit is profit, not how nice you are to your new hires.

You know, back in the golden ages, employers had actual relationships with their employees and the communities they served both as a provider of goods and a provider of employment.

That was the time when the economy actually worked for the people.

I don’t think this golden age ever existed exempt in your imagination. Have you seen working conditions in the 1800s?

Workers had little mobility or options, that's why they stuck around forever (that and pensions).

I'm not going to bother engaging with you from the perspective of morality and ethics, since it seems unlikely that would resonate with you. Instead, I will point out how wrong you are purely from a financial lens.

The goal of a CEO of any company is to generate long term shareholder value - eg. to make the company more valuable than they found it. Mark Zuckerberg has been the only CEO that Facebook has ever known, and obviously he has created a lot of shareholder value during his tenure. On the other hand, Facebook has also lost about half of its value in the last year or so. A dropping valuation is typically a lagging indicator of a major strategic blunder or disruption. The market is essentially saying that he has done a rather poor job for the past 2-3 years and the outlook of investors is diminished accordingly.

And yes, hiring a ton of people and then having to lay them off in a short time frame is a huge part of this. In a tech company, profits today are the result of long term execution of strategies and represent a return on capital investment. A designer or engineer hired today is not going to deliver much that will create revenue or profit this year. There is an old axiom in tech companies - if you want a little profit today, hire a sales exec. If you want a lot of profit in three years, hire an engineer.

Bulking up your technology team only to have to skinny it down later is a massive strategic and employee distraction and is absolutely a sign of mismanagement.

This is why they call people 'resources' rather than people.

Wouldn't you prefer to hire contractors to fill short-term demand and transition them to full employees if the demand ends up being more robust than expected?

Except that:

- I'm guessing many of the full-time people they hired wouldn't have taken an offer as a contractor and

- I'm sure the layoffs are not purely LIFO anyway.

> I'm guessing many of the full-time people they hired wouldn't have taken an offer as a contractor.

Speaking for myself, personally, if I were to join a role as a contractor basis rather than a full timer, I would expect extra compensation to justify the added risk of being laid off whenever. Hiring people by telling them they're full time, and then laying them off and treating them like contractors, is a breach of faith by management by hiding the risk factor of "demand after COVID will return to normal level" behind pretty promises. They made some extra profit by underpaying the nominally full time workers who were left carrying the extra risk of losing job, and it's showing now.

Coming to US from Europe - in US employees are contractors(hi at will employment), actual contractors are just people who are smart enough to know that.

Well, contractors don't get severance when their contract ends, whereas layoffs for employees are typically attended by some small payout. That's not much but it's not nothing. Contractors also have to deal with their own taxes and buy their own insurance (for worse rates).

Of course, if I were a contractor I could probably get double my current salary ... but I'd still rather be an employee, even in the face of at-will employment. Particularly given that my employer is doing great and didn't over-hire during COVID.

Employees only get severance depending on your home state laws. Its far from universal, too.

Employees are always entitled to unemployment insurance benefits (a pittance, but its still cash) which is not true for contractors.

In my experience contractors seldom go back to being employees.

My brother has a degree in Aeronautical Engineering, and contract work was his foot in the door to a full-time developer position at Amazon.

When I quit my contractor job, subcontracted out to a defense contractor over 20 years ago, the primary contractor offered to hire me directly. It was an open secret that my employer hired people strait out of college, billed them out at very high rates, and the client was allowed to poach a top performer now and then in exchange for paying such high hourly rates. I went from being a contractor to a regular employee at a startup.

Granted, this is a sample size of two.

Though, in neither case were the contractors in question independent contractors. I suppose you're getting at that few independent contractors are willing to go back once they taste the flexibility.

I mean, yeah. I was a contractor but not an independent contractor, and I was paid like shit. My take-home has gone up nearly three times since leaving that world and joining a company full-time in 2018. Independent contractors have it much better, as long as they're able to keep work in the pipeline.

Hum... How actually is it supposed to work?

Did those extra people jump into productivity immediately during the short term boom instead of taking time to learn the business and fit in, like developers always need? By what magic did all the large US companies manage to do that?

The boom itself lasted for about an year. It's enough time to get some of those people to contribute positively. It's not even close to enough time to compensate for the drag of increasing your headcount by 30%. And the most competitive period was the first few months, where new people were all drag.

Nope, I do conclude that they expected the boom to stay forever. They could have expected things to stop growing that quickly, but they clearly didn't expect a contraction.

To be fair, none of them are on the area of economical forecasting. And the crazy decisions of the US monetary policy isn't something that one could expect people to just guess. But the sheer amount of overreaction from those companies on both situations isn't something to take lightly. That's clear display of incompetency.

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