Google is crazy too: they will spend more on stock buybacks than they will save through the layoffs, yet are investing nothing in fixing their actual, deep structural problems.
In my area, Amazon has tripped up so bad I can't even have the basic necessities delivered to my house due to a staff shortage (they throw an error at checkout claiming multiple items can't be delivered to my address...items I've ordered for at least 4 years straight on a monthly basis without issue) so I am going to go from spending tens of thousands per year with Amazon to zero. I am in a city in the United States. Amazon will happily sell, ship, and deliver some no-name brand item from a third party seller within 2 hours of ordering, but they can't be bothered to do the same with the stuff I ordered.
If they weren't making money off me (which I doubt, I spent $23,967 on Amazon last year, and their products are only slightly cheaper than local stores...like CENTS), why were they willing to sell to me to begin with? I've switched to a combination of Costco/Walmart for most of my stuff, and will soon be independent from Amazon completely, all because they refuse to deliver my core products that they've delivered for years on a monthly basis without issue (toilet paper, a 12 pack of my favorite energy drink, my favorite brand of protein shakes, etc)
Really Amazon? (note the error I receive says that the item cannot be delivered to my address, and to select another. It is a residential address tied to a house and I've ordered the exact same item month after month. they also blocked subscribe and save.)
Sorry, this is a rant, please carry on.
It doesn't change the decision whether it's better to reinvest in growth or pay out the profits to the owners; the primary reason for buybacks is that in the current tax law it's a slightly less tax-burdened way of paying out profits to shareholders as "dividends-that-technically-are-not-dividends".
Wow. Are groceries that expensive in America or are you buying for a family of 8? My family of 4 only spends about 8 to 10k on food stuffs.
I've started to notice this too - they seem to be experimenting with trying to push people to different "stores" within Amazon that are not unified: Fresh (which is now gone?), same day vs not etc.
I already didn't order high-margin items from Amazon because of the risk of counterfeit products, and Prime no longer meaning "this will be shipped from Amazon inventory within this defined time Window" makes that a useless marker too.
I cannot be bothered with any of this, and got myself a Costco membership, so Amazon (.com) have effectively lost all my business as I try to extract maximum value from that at this point.
Because they are making money off you. You are forgetting what the end price does includes the store margin (while in America it doesn't include taxes, lol).
Not only they are making money, they do it regularly. Maybe profits aren't big per user, but there are hundreds of thousands of such users so ARPU is quite high.
We may argue that this particular buyback was ill timed, but still, banning all buybacks is a very very strange idea
starting a company allowed some pricing power, plus individuals could start their own entrepreneurship (but weren't able to hire anyone)
This is not secret knowledge
I wanted to ask instead of assuming before making the following argument to the previous claims:
> You might be surprised to learn that companies still existed/exist under communism, with not a single investor around ;)
> Those were not actual companies that existed. They were just another part of the government with a different name.
> no, there were worker owned coops.
As I suspected, these "worker owned" cooperatives are completely dependent on the party (unlike current cooperatives). That is not my idea of "owning", since party members that are "workers" of the cooperative only in name would be deciding a lot of things in how the cooperative is run.
> Many cooperatives were vulnerable to exorbitant taxation by local officials, high interest rates on loans, and protection rackets run by criminals, the cost of which inevitably were passed onto consumers in the form of mark-ups. “Kooperativshchiki” (cooperative owners) thus became a term of abuse in ordinary Soviet speech.
So I agree with user nradov here: "Those were not actual companies that existed. They were just another part of the government with a different name. "
I must concede, at some point the lines can become blurred.
The obvious problem with USSR-style communism was/is the authoritarian dictatorship, so everything had to be integrated into the power structure, so only very small companies were allowed to be independent.
If you became successful without the Party? That's a no-no, so thanks and the Party will take it from here.
If you became successful with the Party? Great, now here's a bunch of chinovniks to help you.
As for individuals starting their own entrepreneurship - only in certain specific, government allowed situations. And even then it was frowned upon both by the government and by the society.
Also, being entrepepreneur didn't make much sense anyway, because money didn't matter as much as talons for items. That's why used cars (not requiring talons) cost way more than new ones -- as in, the taxi corp could buy new cabs, drive them for a few years, and then sell with a profit.
Worker-owned coops were nothing like what we know under capitalism. They were huge semi-governmental structures filled with bureaucracy.
Dividends aren’t great tax wise but some big SV companies like Intel pay them out.
Tax code can always be fixed if the gov wanted. For some reason, they don’t like profit sharing, only speculation. More tax payout I guess!
The companies want it that way, so they buy the politicians who will want it that way.
I say this as a heavy chat GPT user. I really love it but not nearly like sending and email to a senior engineer: “please make X” - which then turns into the senior engineer scheduling meetings with the required teams / individuals - navigating the technical and (unfortunate) political issues, coming up with a design and implementing it - getting things done in other words. I don’t know what future versions of GPT will look like but the current one is light years away from having that level of capability.
Even a simpler task like fixing a bug cannot remotely be handled by ChatGPT.
It is almost like LLMs are a new dimension - we used to have X and Y, now we also have Z. Yet, we are thinking that this is just more “Y”.
The real reason is these companies have been overpopulated and produced basically no visible changes in 5 years. Google search is worse with auto-generated results not written by humans, YouTube has become super rabbit hole instead of discovery, Twitter shipped NFT profile pictures and Spaces.
I suspect it is more likely that the benefits will accrue to start ups as they will not have so much inertia working against them in terms of leveraging AI. People with ideas and limited means will likely be the primary benefactors due to AI amplification I think.
Don't forget fleets rip
Look, if you want to not need employees, you need to do capex. If you spend more money on stock buybacks than you save in payroll by doing layoffs, you're taking money away from capex.
I was specifically addressing the phenomenon described in the article, where the threat of the large number in future is demoralizing and destructive.
Reasonable people can consider them facets of the same phenomenon.
I worked for a company like this as well. It’s easy to ignore investors when you’ve had an upward trajectory year after year. They’ll put up with almost anything when the stock price keeps going up.
But as soon as your growth slows or stops, reality hits like a ton of bricks.
Investors have lots of place to put their money. If Amazon cant deliver what these investors want, they’ll put their money elsewhere.
Amazon is free to ignore them, they’ll just have to deal with the consequences of that.
I mean, as an employee, would you stick around for less compensation? No, most people would find a better paying job.
The consequences aren’t necessarily that significant: mainly the cost of raising further cash from the markets, which doesn’t look like Amazon will have to do for many years, if not decades.
Many people who decide on these things, though, are mostly compensated in stock. They need a good price to sell their stock at.
Yes I'm aware stock-based compensation is also an expense. But as I understand it, that expense = the initial value of the grant. So if the stock price goes up it's like the employee got a handsome raise funded entirely by Wall Street.
Choosing to reinvest that money in the business caused some consternation, but the consistent revenue and growth let them ride out periodic misadventures and hits to the stock price. It turned out to be a good move in the long run, because they weren't bluffing about their business fundamentals.
Amazon had the no profit strategy because Bezos had ideals and as the Czar of the place, finance would not convince him to change strategy (But I bet they tried, must have been a fund meeting to watch). Now he is worried about his yacht and pet projects, so he let finance rule the place for the benefit of his stock price. Same with Google. L&S don't have their ideals anymore and just want their money protected. Finance has this covered. There is no care for the brand nor its other stakeholders anymore.
They basically became another IBM, Microsoft, etc...
"their actual, deep structural problems"
at this point I think Android and Chrome are their most high-quality things.
Calendar is okay too, but it does what it did 10 years ago, oh, sure, it has Meet integration too (which sucks, and 720p)
Maps' mass transit things are getting better, but it's not going to save Alphabet
My Pixel 5 phone is still under warranty and has developed a battery fault. I contacted Google support:
1. No option to repair, only replacement and only by post (unnecessarily inconvenient given that it's just a straightforward battery swap that any number of local shops can do -- I did this myself in the past except that this phone's still under warranty and I'm too pressed for time to be sourcing parts etc).
2. I got repeatedly prompted to confirm that I was using the charger that came with the phone (this seemed to suggest there might be warranty implications if I wasn't -- not sure this is even legal in the UK).
3. I had to consent to a page worth of legalese, including granting Google permission to access my phone usage data -- wtf is that?
In the end, I chose to walk into a third-party repair centre and just pay for an out-of-warranty repair. Took an hour, £50 ($60) and a voided phone warranty -- IMO a great deal compared to getting warranty service from Google.
I don't know about Chrome, but if Android is their most high-quality thing, then at the very least they are also losing in developer experience. The churn in libraries and frameworks there is, from what I've seen, only second to Web frontend, and bugs in newer things are really embarrassing. "Ready for production" (they claim in the FAQ) Jetpack Compose is great when it works, but even the Android Studio-generated Compose template crashed the IDE several times, while manually setting it up crashed Kotlin compiler[1]. WorkManager and Room are important things that bugged out for me, too. And I'm at it for just 5 months - there's got to be way more dragons that I'm yet to see.
And yeah, there's Flutter, and now there's this new Jetpack/Compose whatever. But as is tradition it's nowhere near production ready. And when it becomes finally solid, they just abandon it.
Angular went through the same cycle. I'm looking forward to their new React++ :D
google has essentially one product (85% of revenues, after fiddling revenue sources) which was developed almost 5 years ago. Everything else is a rounding number and most are money losers.
The company has been drifting all that time, seemingly unable to release any new products of significance. Google cloud is an also-ran. Android worked in that apple isn’t a monopoly, but no money spinner and seemingly abandoned. New “products” appear and then are dropped. Even the layoffs (source of this thread) were conducted in a ramshackle fashion.
They even let a random small company swoop them in machine learning. They had the pole position in that race but after jg left they seemingly lost interest.