Comment by paxys | Hacker News Reader

Comment by paxys | Hacker News Reader

I was with him until "[Musk's] axing of half the Twitter team since his takeover in October should provide inspiration to other tech bosses". While yes it is likely true that Google and other tech companies have excess staff, there is a right way to handle that situation so it doesn't adversely affect the business, and what Elon did is not it.

Twitter's problem was cash flow and avoiding getting margin called amid falling ad revenue, high expenses and interest payment obligations, all related to Elon's buyout. They needed to stop the bleeding, and fast. Large tech corps are meanwhile sitting on hundreds of billions of dollars in their bank account and posting profits of tens of billions every quarter. It would be idiotic to further disrupt their operations for no reason.

Should Google do more rounds of layoffs, kill employee morale, increase overwork and burnout, shut innovative businesses, send talent to competition and significantly weaken the company's long-term prospects, all for a few hundred million in payroll savings that will go towards stock buybacks? The sad part is that the activist investor class will reply with a resounding – yes.

There's a huge difference between "in a company of 150K+ engineers, a non-negligible number of them are probably not very productive" vs "over-hired talent to do fake work".

At that scale, there will always be inefficiencies and imperfections. I also don't think a big mass firing was a smart move long term, but it does make some investors happy for some reason, and gives a short term stock boost.

Quick correction: Google does not have 150K+ engineers.

When you’re hiring a lot of people, a significant number of people will be underperformers - people who are either not motivated or capable of delivering enough value to justify their salary.

In a bull market, large companies don’t want the negative publicity that comes from layoffs. So instead of firing them, they get shifted into underperforming teams.

The axeman cometh with the bear market. That unwillingness to tell people you’re cutting costs suddenly becomes exactly what they want to hear, so you take the opportunity to get rid of all those underperforming teams.

It’s garbage collection at an organisation level. This is capitalism.

> So instead of firing them, they get shifted into underperforming teams.

I work at Google. I've seen this one time. A manager didn't want to do the hard work of firing somebody on their team and then misrepresented their productivity to another manager when that person tried to switch teams. This manager received a bad performance review and left the company (I don't know if it was their choice).

It is easy to move teams within Google (or, it used to be at least). But it is very hard to move teams within Google if you have bad performance reviews. You can't really shift underperformers to underperforming teams at scale.

I’m fine with the tech layoffs and “Musk being right” movement. Mostly because it has generated a large shitlist of companies I will never work for, will never invest in and will never integrate with or recommend.

That's a weird form of investment strategy, what is your yearly returns looking like?

Pretty good so far. I put it all into property and ETFs and beat any market investment I would have made.

Not investing in a toxic and volatile shit show is a good investment strategy.

My father threw a lot of money into Tesla and is breaking even. His entire life is consumed with "oh shit what did Musk say now"

In this case, contrary to your assertion you are probably pretty heavily invested in tech giants that did layoffs, assuming some of those ETFs are index-based.

That's fair. The point is that they are diversified thus limiting the risk of an individual company or group doing something bloody stupid. 90% is in property though.

I don't understand the need to show your ego and chess thumping but I guess "this is Wendy's" so well done sir.

While I wouldn't say fake work, "busy work with dubious value" holds quite true. Eg spending 5 months a year in the perf/promo dog and pony shows, cloning existing documents and deprecating older ones in the name of inflating artifact count, meetings to show case leadership and influence all point to this.

> It would be idiotic to further disrupt their operations for no reason.

Tech has the worst P/E ratio, even big tech. It is fine if the value is inflated for disruption and future growth, else the valuation should be less than half of what it currently is if we say $1 of tech profit is equal to $1 of any other profit.

And...? Thanks for this non-sequitur.

Please explain how you come to this conlucsion of the worst P/E?

Google brings 1.30$ after tax for each 1$ invested into operations and it trades at 19.5 P/E. This is very conservative.

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