Etsy is laying off 11% of its staff
cnbc.com
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Getting laid off in December isn't fun (getting laid off any time isn't fun), but I appreciate that our industry has developed a norm of generous severance. Four months+ pay is four months+ more than I got working at a non-profit in education.
If my work isn't paying for, whether due to "macro environment" or something else, it's better if I go do something where I am worth my pay, but not if I'm put in severe financial jeopardy during the switch. Providing several months of severance makes that transition, while still destabilizing and stressful, much, much easier. I wish more workers got this.
Now I'm thinking that next time I'm applying for jobs, one of my questions for them will be about any past layoffs. No company that's been around for a while will be able to say "we've never laid anyone off", but if one says "we let them keep their five-year-old laptop" and another says "we gave them several months severance pay", that will be a factor in my decision.
My previous company (a large corporation) did 1 week per year you worked there, capped at 4 weeks (one person I know that was laid off was there for 17 years, only got the 4 weeks). They actually used to be more generous but made significant cuts to their severance benefits shortly before layoffs so they could save a bunch of money on it (they also took away 401k match later, reduced PTO days, eliminated bonuses, froze raises, made our health care benefits worse, let tons of people leave without authorizing filling in gaps so many departments became overworked skeleton crews, all sorts of crap to save money).
So at least in that case, it wouldn't have mattered if I asked what their severance policies were while interviewing.
This serves two purposes, an indication of their seriousness about your position, and some peace of mind (e.g. have 6/12 months or whatever in your pocket).
That being said, there are scenarios where you won't see a penny of it.
Also, depending on your jurisdiction and job tenure, you may have a very viable claim for more severance. Nobody is likely to offer you more than statutory (or whatever is in your contract) without asking, but it may be worth paying a lawyer hour or so to find out properly.
Given everything I've ever heard about working conditions, pay, and benefits in video game studios, it seems more appropriate to think of them as opposite to the mainstream software industry rather than a part of it.
Sorry to be contrarian, but the only companies that do these bigger packages are doing it because it will be in the news.
I think you're being unrealistic as to what the industry as a whole is like. 1 week per year is not uncommon. I've been doing this 26 years and have had many dozens of friends laid off during this period, back in 2009, and back during dot com.
I don't doubt your experience, and I don't have a survey of industry standards. But I will also say that experiences 14 or 25 years ago are not a reliable guide to HR choices in the 2023 tech industry.
I didn't say only high profile companies gave severance. I'm saying 3+ months is rare and it seems normal because it is a marketing tool used like this.
Also to restate, my experience translates to what is currently happening in tandem with the last two periods. I know someone who was recently let go getting 4 weeks after 16 years.
But my friends have been laid off, and I've yet to hear of any of them getting more than 1 week per year worked. But I don't have any friends that work for big tech (I live in the Midwest, a lot easier to not know anyone in big tech here). A lot of insurance, health, and financial companies around here, not too many Facebook or Apple or Netflix offices.
Which inevitably leads to lying, poor communication, and surprise boom/bust layoffs.
In contrast, most other software development industries have figured out how to square the budget-time-people circle, most of the time.
It's a shame Rockstar doesn't do more interviews, as they appear to have a working incremental project development model, that reliably (if slowly) delivers results. My suspicion is they just hire/train professional PMs.
I suspect this leads to a trend where you have disproportionately more mediocre product/vision people at the large gaming companies, because if you have really good product sense in a space with as much passion as video games, and with a relatively low barrier to getting your foot in the door (if you have a small core team of very talented, dedicated people), what on Earth are you doing being a cog in someone else's machine?
If you want to work on a AAA level product (or even a AA product nowadays), that's increasingly becoming out of reach with a small team. Some people want to work on games that millions of people will play and enjoy. I know a guy who made and released a few small games on his own (I helped with one of them) and they sold like 1000 copies at most, but he maintains a day job in the industry for the past 12 years and is currently a senior engineer at Epic Games working on AAA titles.
Meanwhile I'm working on a small game in my spare time this past couple of years and I'm worried I might not break 1000 copies with its release either (not the prettiest game and a bit of a niche genre, but I'm on my own in my spare time). But at least I have a fairly well paying day webdev job so I'm not screwed if it doesn't do well.
https://kotaku.com/inside-rockstar-games-culture-of-crunch-1...
https://kotaku.com/red-dead-redemption-2-developers-speak-ou...
But it still seems to be a mixed bag of experiences (with the expected "certain locations have shit management" and "QA always gets shit on"). And at least they shipped a finished product, that was arguably improved by crunch.
In contrast, there are a ton of games that don't measurably improve/ship and people are asked to crunch to cover management screw-ups.
I'm baselining at things like Star Citizen and Beyond Good and Evil 2, of the "How are these people even allowed to call themselves professional managers/directors?" level.
Games have massive cost efficiencies from scaling. Studios are incentivised to always make the biggest games they can with their budget. Games team sizes vary strongly with the project period. They can’t handle more than a small team early and can absorb almost any number of people at any skill level before release.
End result is that game development is always boom and bust. Small core teams build a game up slowly, then more and more are added until just before release when a mad scramble for anyone and everyone they can be bought borrowed or stolen to get the game released on time. Then there’s no work except for the core team on the next game.
The obvious solution is to have many games running in one studio to even out the team sizes and absorb the crunch, but that implies either studio sizes beyond anything we see currently (and no increase in per project scope) or much smaller scope for games.
I’ve seen models like they work, and be much less painful to work with for everyone involved, but it did require different market conditions to justify the alternative model, I’m not sure the entire industry could switch.
That’s not to say fixing the problem is impossible, just that the bad incentives will always be there to push back against improvements..
I wouldn't take your experience at one to be representative of how termination and severance at US tech companies is usually handled.
A small startup I worked at shut down and they told us on ~Nov 15th that our pay and benefits would all be ending Dec 1st -- what an absolute nightmare for anyone with bills or a family.
My friends who have worked with NGOs and nonprofits have all complained that they actually have the worst work-life balance; imagine your middle manager doing normal stereotypical office gaslighting about working longer, harder, not getting commensurate pay etc., but instead it's also tinged with morality and "do it because our mission is so important"
I would naively expect non-profits to have more humanizing cultures internally but it's just objectively not the case. If anything it's the opposite, using the mission as cover for absolute cultural rot. And some of the best cultures seem to be at trading firms like Jane Street and TGS which also pay better than the alternatives. Go figure.
I'd love to work on something I really care about, but it seems like most of those jobs just give management excuses to treat you terribly.
That's a specious claim. I'd argue just companies that have brand recognition do.
I know someone who was days from telling their boss about the Apple offer they had accepted who were then given a layoff package.
Probably was fun for them to get a ~30k+ 'leaving bonus' when they were planning to anyway. :)
What if you had unions or proper labor laws that actually guaranteed this? As an European it's weird to see you having to rely on the "kindness" of the company to not get fcked over.
Or please direct me to some literature supporting your opinion.
Edit: Page 19 here [0] would directly question your assumption.
[0] https://www.wipo.int/edocs/pubdocs/en/wipo-pub-2000-2023-en-...
It's about labor market flexibility. https://www.investopedia.com/terms/l/labor-market-flexibilit...
Overly strong labor unions make the entire economy less nimble in rapidly changing environments.
No need for gig economy "flexibility ", making rich millionaires.
Is the cost worth it? Do I want fair conditions and a good work balance, or do I want to brag about something that made my employer's shareholders really proud? Is the pay worth it if I can't miss a day of work to tend to more important matters?
I run a website for immigrants in Germany. I have to spend a lot of words explaining that it's okay to take sick days, that you won't lose your insurance if you lose your job, and other things that Europeans take for granted.
I think this is a completely wrong take from the armchair philosophers.
You actually can't do great things when you treat people like shit. The people who actually do great things strike the right balance between applying pressure and requiring excellence and treating people well. The results of purely treating people like slaves is mediocre.
Even the pyramids were built by well paid craftsmen, not slaves as is commonly believed.
Half right. It's currently believed that the bulk of the workers were lots and lots of paid laborers. Not craftsmen. That would be expensive!
https://www.britannica.com/video/226777/did-enslaved-people-...
After a certain value is for show off only, or maybe lit cigars with burning notes.
Is life better in every respect? No. But there's a lot more to life than earning potential.
Is that supposed to be something positive? Why would you want a relaxed work culture if you like your job?
The only companies that treat their employees poorly are those that have people lined up to work for them. The employees must think the tradeoff is worth it.
Employees should be able to choose a company with stability and lower pay or higher pay and less stability. The other option is to take the high pay job and pay for additional private insurance to cover what your employer will not. The people who want stability shouldn't force it on the people who are comfortable without it.
Just in tech, Europe developed ARM chips, ASML lithography machines, and DeepMind's AI breakthroughs. These underpin a few trillion dollars of global economic activity.
Which is a good thing. Massive tech companies are a negative thing, not a positive thing.
Secondly, I strongly doubt shitty labor laws have been the secret formula behind the success.
That is to say, you're not wrong but if the hope is that people are going to be like "by golly, I've never thought of that, I'll just run right out and join a union" um... no.
Then hiring would be much more expensive, much less new companies would be able to start up, and as a result, salaries in tech would be 2-3 times lower, like in Europe.
What would you choose, a 2-3 times higher salary or a guarantee of things that you would often get anyway?
The fact that you have no security net in the US is probably also harmful when it comes to startups. Few can take the risk.
If it meant a guarantee for all workers, allowing people to not become desperate enough to become porch pirates, or break into cars to steal stuff, or point a gun to my head because I have more stuff than them, or any other social malaise fanned by the lack of safety nets, I'd take the guarantee 10 out of 10 times.
Yea, I am OK with the American model.
Are you personally willing to work for 1/2 or 1/3 the pay you receive, so that if you ever get laid off you have a slightly better severance package?
I am not.
I would rather get paid what the most I can/am able to negotiate, and live in a country with so many opportunities, that if I did ever get laid off, I could move to another opportunity with equally attractive pay and benefits easily.
Giving up a huge chunk of your earnings potential in order to have your severance package, should you ever need it, be slightly better doesn't seem like a good tradeoff to me.
That's a false dilemma. It's not like you would have to give up half your salary for this.
> and live in a country with so many opportunities
That's only because you're a SE. The rest of your country doesn't have those opportunities. I think rather most of them would have preferred the social security net of most European countries instead of working for less than minimum wage begging for tips, being laid of on a moments notice.
I mean, how's SV with all the homeless, robberies etc.? Is that kind of society worth the slightly larger pay? Isn't it nice if your neighbors also have it good?
I don't even live anywhere near SV, I used a $110K average for the USA in my example, if we were talking SV that would probably be closer to $400K, so 10X what a programmer in France might make. I really don't think anyone in SV would be willing to work as a programmer for what an average programmer in SV makes so that they were guaranteed a better payout if they got fired.
Also, how many SWEs in SV make $400k? Do you think they're a representative sample of white collar workers for that city?
10x means 90% difference, all consumed by the more expensive healthcare? That's like one order of magnitude wrong.
> how many SWEs in SV make $400k?
Saved you a google: > The average total compensation of a Software Engineer in San Francisco Bay Area, US is $242,000.
the topic was programmers, all "white collar workers" is not relevant to this conversation.
Healthcare costs could help to make up for that for many employees. The average American spent ~$13,000 in health care expenses in 2022, but a full time employee making minimum wage only gets ~$15,000 a year. Even if someone earns twice the minimum wage, healthcare costs will eat a huge percentage of what they'd earn.
Obviously software in the US is an exception, although here too wages and benefits are being slashed at every opportunity. The tech industry is hard at work suppressing wages and hiring from a global pool of talent (and waiting for AI to replace employees) so jobs in software might not stay so nice for very long, except for a select few with the most rare skills.
To answer your question, yes, I want to live in a society where I can pursue an extremely high quality of life for myself and my family. My neighbors have it pretty damn good from what I can tell.
Edit: wait, I was once on the French side of the alps. Hardly enough to let me speak with any authority on any thing but snow, though.
Oh, and USA is one the countries with most inequality, which plays in favor of a minority at the expense of the vast majority. Different story in France, for instance, where solidarity between rich and poor is higher through taxes, although not perfect.
Really depends what you want out of life.
You’re disregarding that Europe is reaping what it has sown when it comes to economic development.
Not sure how you are measuring "inequality", but even in a backwater like Hungary you don't have adults rationing insulin made for pets.
It is possible in an era of remote work to outsource any American software job to a lower paid, better skilled worker in a low cost of labour country.
Companies choose not to do this. Maybe they want people they can meet, maybe investors don't like it, maybe the paperwork scares then. I don't know the reason but every American programmer who has a job has it because thier employer chose not to hire a better cheaper foreigner with less rights.
Looking at it this way we can say that the American job market and salary expectations are not related to international salaries. And it follows that the same can be true in Europe.
My personal theory is, the world runs on dollars. America prints dollars. The closer you are to the fountain the more water you get, so Americans get more dollars.
I’ve been through this twice in the last two years and let me tell you, this is not the norm. Most companies would pay you only two weeks if it wasn’t for the WARN act.
Most companies are paying 2/3 months based on the local laws. For smaller layoffs where the WARN doesn’t apply, they’re barely providing a month of severance. And yes these are the same tech companies.
This is a great idea in theory, but do remember that organizations are made up of people, and the decision makers in the past may not be the same decision makers in the future.
They killed the site to hunt metrics.
The legit boutique sellers still exist but they are buried in a sea of mass produced, private label junk you could find on Amazon or eBay.
Sure can! Easily.
I just see the same ones on Amazon by OXIIK brand. I had, some grandmother in Canada in mind.
Check out journalist.ai, etc.
They ruined the culture and ecosystem, it's just ebay/amazon/aliexpress now
There are a few exceptions. Some are covered in the book "small giants". It's great.
Now I actively avoid sellers with too many sales and never buy anything that looks like it has a stock image for the listing.
I don't buy things from Amazon for a reason, and it's incredibly annoying to have been forced to do business with them anyway, even indirectly.
In what way? I mean if you got good enough tools it can be made Ikea straight, right?
You'd want to start off with carefully-selected invites to specific sellers, and then maybe do a referral-based system to bring on additional sellers. Video calls and photo ID for verification. Reporting systems if buyers get mass-produced junk.
Sounds like it would take quite a bit of human effort and care so I can't imagine it getting funded :)
Example: search for toilet paper holders. You'll find stuff like a railroad spike, animal sculptures, pipes with valves...they are far more creative, weird, and eclectic than a typical Amazon search.
Hot take: Etsy's customer doesn't actually want something handmade, what they want is something that's thinking "outside the box" of normal home goods. They want a marketplace of unique ideas.
Whatever Etsy has done is working: https://www.statista.com/statistics/409371/etsy-annual-reven...
Yes! Especially an artist in a rich country. You're paying for the artist's time, and in rich countries that's very expensive.
On Etsy I found some great wood art from a Chinese artist, priced at a few hundred dollars.
I do like Etsy for household knick-knacks like napkin holders or nightlights or photo frames. I can go on Amazon and get some random made-in-China junk, or go on Etsy and with a little digging find something a bit more interesting at, say, $50. That's probably ten times what some Amazon dreck would cost but I can splurge on a napkin holder or photo frame.
I wouldn't mind an assembly-line hand-painted painting. I like the texture of hand-painted things instead of a print.
Even companies aren't immune to fundamental attribution error.
Does anyone really question that growth over the past 10 years, particularly in the 2020-2021 COVID money printing era, wasn't due to the macro environment?
Given how cheap/free money was for so long, it made total sense to hire and focus on growth and cornering markets without being concerned about margins or long-term profitability. Now that money isn't cheap, companies are concerned about those things and are making changes to their businesses. This is all intentional.
You're right. People pretty much know that external circumstances are responsible for a large part of the growth of companies.
I think the parent commenter was highlighting that execs routinely claim responsibility for growth(and collect outsized rewards) while attributing a majority of problems to external factors out of their control(also while escaping consequences by redirecting them to rank and file). It's a sweet gig if you can get it!
How many people have increased their salaries significantly over that time? Do you think they put it down to their own achievement or do you think they believed that they were merely riding an economic wave?
You won't find that in the reporting, but it's begun materially impacting Etsy, and other large marketplaces like Amazon and Wayfair.
If you do a couple Google searches during the US evening hours for the kinds of products people often buy on Etsy, you may notice Temu shopping ads in all the top slots, outranking and outspending every US marketplace including Amazon and Etsy which would typically hold those first-page above-the-fold spots in the past.
Late this summer, the places Etsy sellers congregate to chat started getting widespread reports of sales dropping off a cliff, to levels not seen in years, for new and veteran sellers alike. The plummet in Etsy traffic coincided with Temu beginning to replace Etsy in Google Shopping ads at the top of Google searches.
Apparently, Goodwill impairment, Cost of revenue, then marketing.
From: https://www.sec.gov/ix?doc=/Archives/edgar/data/1370637/0001...
Revenue: $2,566,111,000
Costs: $3,224,671,000
- Cost of revenue: $744,592,000
- Operating expenses:
- Marketing: $710,399,000
- Product: development $412,398,000
- General and administrative: $312,260,000
- Goodwill impairment: $1,045,022,000“ If the goodwill asset becomes impaired by a decline in the value of the asset below the purchase price, the company would record a goodwill impairment. This is a signal that the value of the asset has fallen below the amount that the company originally paid for it.”
https://www.fool.com/investing/2023/02/02/etsys-1b-problem-t...
> In this case, Etsy believes that it overpaid by $1 billion for Depop and Elo7. A company normally takes write-downs like this when the results of an acquired business don't live up to the expectations at the time of the acquisition. That's not so good, noting that these two businesses are expected to be long-term growth drivers for the company.
Investopedia: "Goodwill impairment occurs when a company decides to pay more than book value for the acquisition of an asset, and then the value of that asset declines. The difference between the amount that the company paid for the asset and the book value of the asset is known as goodwill."
> Goodwill impairment: Goodwill impairment expense consists of non-cash charges related to the impairment of the goodwill of Depop and Elo7.
This is a level of circular definition that makes the head spin. Depop and Elo7 were Etsy acquisitions. I haven't read the SEC filing in depth, but I assume this means that Etsy is acknowledging they overpaid on both these acquisitions, and that their value is in reality far less than they thought at the time.
I'm not sure what the accounting advantages are here for Etsy, maybe someone else with more knowledge could weigh in?
Goodwill is basically the extra value paid one company pays when buying another company. So if Etsy buys Depop for 1.6B, and of that 1.6B, let's say 600M were actual 'assets' (cash, inventory, whatever (not that Depop had those things when purchased)), then Etsy paid $1B (1.6B - 600M) in "goodwill" for Depop. That "goodwill" is basically the Depop brand, the desire for existing and potential customers to use Depop, etc.
Suppose Etsy wakes up one day and realizes that the $1B worth of Depop brand must be worth less. I don't know how they determine this, as the most realistic way would be if they were somehow shopping around to sell Depop off to another buyer, and all the offers are markedly lower than the $1.6B they paid for the same assets + intangibles. That difference is the impairment, to the goodwill.
Not sure if that made it sound less circular. I'm also not an accountant, but I've tried learning quite a bit about the subject.
You could make an argument that the two concepts are the same thing, but that's not really how business works.
For example you could have paid exactly what the market value was for something, maybe even gotten a "good deal" as of the date the deal closed, and the market could subsequently shift.
Like if they invent a cheap way to convert water to unleaded gasoline tomorrow it doesn't mean you "overpaid" for Exxon three years ago, per se.
The way this is generally used in practice is that when a company is having a bad year or quarter and knows they are going to report losses, they will tack on a bunch of impairment so that future quarters and years don't look so bad. Having a bad quarter followed by mediocre quarters is much worse than having a very bad quarter followed by good or okay quarters.
It's not entirely nefarious, though. If a company is operating with good fundamentals and finances, you don't want that constantly being hidden by a bad decision or massive loss that really happened years earlier.
Goodwill impairment means they're (essentially) admitting to making a huge miscalculation on what that company was worth without a change in the tangible assets.
Now that the layoffs have started I haven’t heard a peep from that crowd.
The industry seems to be moving in the other direction - how much can you cut and still maintain profit? Interestingly, this seems to have always been (sory of) Apple's model.
It use to be build a great game with mass appeal and profit. Now its just how small can we make it and how much DLC can we sell to a small subset of people to equal profit.
Companies need to be shamed for potentially destroying people's lives while simultaneously reaping great rewards for their efforts.
Like, Etsy is based on a well-understood, popular business model - provide a digitasl storefront to sell physical goods. There are no hard or unique problems - their main advantage is name recognition in the indie-maker community.
So where is that money going?
- They have nearly 3000 employees, which seems like way too many
- Marketing and ads to increase reach and presence
- Acquisitions (h/t to ojbyrne in this thread)
Remember Uber was losing $2 billion a quarter, much of it going to pay for those reasons. Also I'm not sure how stock buybacks are accounted for, but Etsy did $290M in September according to this one chart:
To the previous shareholders of Depop and Elo7.
Better yet, stop using these services.
But the long term solution is a legal change that ensures that the board of directors contains representation from employees along with share holders.
Can't think of any service that isn't "these" service.
recently
https://chicago.eater.com/2023/8/22/23842186/evanston-chicag...
They were also against raising minimum wage.
See: Uber