Snap lays off over 500 workers 'to promote in-person collaboration' | Hacker News Reader

Snap lays off over 500 workers 'to promote in-person collaboration'

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60 pointscebert51 comments

Hot on the heels of recent research[1] showing forcing RTO doesn't do anything to improve firms' valuations, but does reduce morale. Remote workers provide a convenient scapegoat for low performing CEOs:

> Our empirical analyses find that the probability of RTO mandates is higher for firms with poor prior stock market performance. However, institutional ownership significantly decreases the probability of RTO, and CEO stock ownership does not have a significant effect on RTO mandates. Further, the probability of RTO mandates is significantly higher for firms with male and powerful CEOs, who are more likely to grab power back from employees through RTO (Cragun et al., 2020; Business Insider, 2023a). 5 Overall, our results do not support the argument that managers impose these mandates to increase firm values. Instead, these findings are consistent with managers using RTO mandates to reassert control over employees and blame employees as a scapegoat for bad firm performance.

[1] https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4675401

That paper is a joke. Here's how they collected their "treatment set":

> We collect RTO information for S&P 500 firms through manual news searches on Google and Factiva. Specifically, for each firm, we search by using the company’s name and the following keywords: ‘Work from Home’, ‘return to office’, and ‘days required working in the office’. We focus on S&P 500 firms because these large firms are closely followed by media, thus mitigating concerns about media coverage bias. Among the S&P 500 firms, 137 publicly announce their RTO policy and are classified as RTO firms in this study. These 137 firms become our treatment firms

They then correlate this with other (ahem) high quality datasets...like Glassdoor reviews.

Setting aside all personal biases, this is like bad undergrad research. You can't just look at titles and treat papers like pokemon cards.

"this is like bad undergrad research."

Unfortunately I think you just described the corpus of behavioral science over the past two decades

Sadly, yes. I mainly looked out of a sense of morbid curiosity, and I was not disappointed.

What is your concern with this approach? It seems pretty reasonable to me. Obviously the better the data the less chance for some kinds of errors, but nothing here sticks out as particularly bad. (Full disclosure I didn't read the paper itself.)

Among many other things, sample bias.

Sample bias in the sense that they may miss companies in the S&P 500 that aren't as well reported on (possible but I would guess not super likely), or that fortune 500 companies are not representative of companies overall (certainly true but still a reasonable scope for analysis)? Or something other than that?

People generally leave reviews because they are unhappy with a thing. That alone is sampling bias from Glassdoor. Rarely do people leave a review because they are happy with something.

Why is that a bias? When people are more unhappy, they post more negative comments. If they are less unhappy, then they post less negative comments. The bigger concern is that employers post fake positive reviews, which biases against the findings.

I know researchers especially junior researchers are very critical of others’ work. But they focus on s&p 500 because theses firms are big and closely followed by media.

You can tell it's a joke from the second sentence of the abstract. They don't even attempt to pretend that they're impartial or scientific, it's 100% obvious they're coming into it from a completely biased position.

From paper:

Table 1. Summary Statistics for Determinant Analyses

Panel A: Industry Distribution of Sample Firms in Determinant Analysis

Industry # of Firms

Agriculture, Forestry, Fishing 1

Construction 4

Finance, Insurance, Real Estate 97

Manufacturing 177

Mining 16

Public Administration 3

Retail Trade 21

Services 69

Transportation & Public Utilities 59

Wholesale Trade 10

Total 457

I find it odd how they removed the Information Technology sector and companies from the dataset.

I also count 6 whose core (i.e "essential") employees cannot, by definition, work remotely

They used the first 2 digits of the SIC code for each company, which has Amazon as 59 ("Retail") and Microsoft as 73 ("Services").

I really think RTO banaza has been nothing more than a soft layoff tactic to unwind the covid hiring surge.

My company had a push to get everyone in “strategic offices” several years before Covid. As far as I could tell it was also a layoff tactic. I think they learned it from IBM.

It didn’t matter what office a person was at, as long as they were at an office. So the idea of “spontaneous cross functional collaboration at the water cooler,” they talked about never actually happened, as people were in offices with people who they had no common ground with (professionally speaking), and everyone was tethered to their desk all day. For myself, I was on a team with people spread across 5 states, 3 countries, and 2 continents… but at least everyone had an office, right… I was on the phone for 6-7 hours per day. I’m not sure when I was supposed to chat it up at the water cooler, or who I was supposed to talk with.

Covid kind of saved me in this respect, but they are pushing RTO now. It seems those near offices are resisting a lot. I hope that goes on for quite a while so the focus remains there and doesn’t shift to those who officially work from home now.

I worked at IBM and my office was like this after the original product was EOL. There were several in-house teams that worked for entirely different divisions of IBM. In hindsight, it does seem odd since you - if lucky - at least had 2-3 other people on the same team at the office.

I wasn't aware of any minimum per team or any other weird metrics. Every team was always distributed geographically anyway. Kind of crazy to think about now to be honest.

I hadn't even considered how this affected middle management either. It seemed less common, at least in our case, to have an off site first line manager. So we might have even had multiple managers per team that way but someone who was there would have to correct me. It should be no surprise the company has its own unique brand of dysfunction.

This is what jumped out at me:

"The company pulls in more than a billion dollars a quarter in revenue but still operates at a loss"

I'm at a loss for words

These companies operate at a loss in order to invest in growth for future profits.

Not saying it will work out but amazon famously was unprofitable for the longest only because it kept investing back into itself for growth

They weren’t operating at a loss though, right? I thought the profits of Amazon were basically negligible, as profits were getting reinvested. I read that as different than operating at a loss, which would imply their costs exceed their revenue.

I'm not sure about Amazon, but I know Uber was the more recent poster-child for the "operate at a massive loss to win market share then Jack up prices later when customers are locked in" strategy to keep the funding going.

I don't see that strategy working again for a long time

Amazon for sure did this with ebooks, but I don’t think the overall business was operating at a loss. All those profits were used to build out new areas of the business, like AWS.

There was _brief_ periods of loss, but only when they had a lot of cash on hand... they were putting in basically all their profit back into the business.

https://www.macrotrends.net/stocks/charts/AMZN/amazon/net-in...

That's a completely different strategy to investing money the company doesn't have that will (eventually) require additional outside capital/funding rounds.

Sounds like they're getting closer to profitability.

It’s a decision, they could become profitable yesterday, but what about tomorrow? They are betting for a bigger payday later.

The reality is probably that they're distributing enormous bonuses to higher ups. Why care about the profitability, when you're getting paid anyways?

Supposedly part of the justification for the layoffs was to recoup the large amounts of equity that had been given in recent years (presumably to senior members of staff) which had led to a dilution of the stock. Pretty bizarre if this was used as a rationale and it wasn’t the actual reason.

Doesn’t matter if BigCos say RTO is better. We need 10 years for remote-only companies to mature and start going public en masse. The cost savings, ability to hire anywhere, and attract the best talent regardless of location, IMO will vastly outweigh any “unquantifiable benefits” of forced in-person interaction. But we need the proof to come out where it matters the most, P&L.

Are there significant cost savings? Remote workforce management costs a TON.

Are we able to hire anywhere? Crazy costs associated with contract and tax residency management, complexity managing timezone overlap both during hiring stage and in the workplace, etc

And frankly, you don’t need to, and you wont be able to hire the best talent unless you’re doing envelope pushing work.

I work at a “hip remote-first startup that raised a ton of money” and we still only hire from within the country we’re based in, still have to have an office + office space for remote workers that require it, and have exploded the complexity of workforce management.

I’m just not seeing the benefit to the employer. To the employees, absolutely, but not employer.

There's an app for that. Sorry I meant SaaS. Its 2024 not 2014 after all.

remote.com and other similar companies that specialized in employer of record services.

For example remote charges $600/month per employee, $30/month for contractor, and provide the tax and legal stuff for hiring in like 200 countries. Thats $7200/yr per employee.

I dont know what it costs per employee if you hire a dozen and provide a 5000/sqft or whatever office space for them to work in. I heard rents in NY are crazy, _may_ actually be cheaper to hire remotely than pay for an office and all the rest. I dont know for sure, I haven't run the numbers.

...I checked quickly. Say 5000sqft. Google says $80-$90/sqft rent annual, lets use $80. Thats $80 x 5000 = $400,000/yr in rent alone. Its $80,000/for 1000sqft, but idk if you can squeeze a dozen people in 1000sqft for 8 hours. Plus you need offices for CTO/CEO/C-whatever-O, managers, conference room(s), 2 washrooms, kitchen/break room/area. And the upkeep, furniture, heating, electricity, water, internet, insurance, security system, whatever else.

My company is a remote only business and somehow HR and IT have figured out how to hire US / Canada / EU / Philippines / various South American countries. But I’m not the accountant or HR expert. I don’t know why you need offices, that’s absurd

Regulatory requirement.

The question isn’t whether it’s possible, the question is whether remote-first is a significant value-add to the employer.

It's unfortunate your industry is regulated in such a way that you need a physical office location for many employees. That seems like a fixed cost for anyone in your line of work. Mine does not have such onerous requirements, and I would assume that's the case for most tech companies.

It depends on what you mean exactly by “tech companies”.

Physical PoP comes up as a requirement in many places. Even the famously remote-only GitLab, has offices throughout the globe.

So...hire within the same state/timezone/whatever.

The savings? Potentially up to: Your entire building lease, utilities, maintenance, and furnishing costs. Hiring compensation incentives. Relocation costs. Talent loss from a commute-radius hiring pool. Spend to battle weaker morale. Crucial morning employee energy that was formerly burned in traffic, etc.

Remote work has such obvious, massive upsides that I'm baffled anyone could miss them. Excluding bad-faith doubt, perhaps the cause is worker Stockholm syndrome.

You’re very emotionally charged on this topic. Kind of pointless to engage in the discussion in this state, don’t you think?

snap was so overhyped during pandemic. People thought this would be as big as Instagram, not even close

Honestly don't know how you could use Snapchat once your frontal lobe is fully developed

Sure. Though their users are a large demographic with plenty of disposable income at a lifestage where lifetime value of a customer is a high. The app’s design is embarrassingly bad (probably a CEO micromanagement problem), but that is less important than being able to talk to your friends. A usable and well design app is ultimately less important than getting the right features and clearly Snap did this well. Their real problem is Apple’s ATT pulling the rug out from the entire mobile ads business.

I don’t quite understand this kind of comment.

Is it to feel superior for not using something that you don’t get? Are you trying to make yourself feel better or to put down Snap users as brain damaged and/or undeveloped?

They have hundreds of millions of users, using it for all sorts of use cases. There’s many features or products that are not for me, but I still try to see why instead of this kind of dismissal.

Why make snarky remarks like this?

I was in a bad mood at work. Sorry about that.

I'm young enough that when Snapchat came out, I was in the core demographic. I think Snapchat in particular makes me angry because it was extremely sticky in my friend group despite being annoying to use.

snap, formerly snapchat, which removed the “chat,” promoting in-person collaboration. through layoffs. for an app that somewhat expects not being in person.

if it weren’t for there being individuals impacted, it might be funny.

I had no idea what snap was, but this reminded me that snapchat was a thing, but I can't actually remember what kind of thing it was.

It’s huge in high schools.

somewhere, a marketer gained their wings.

I'll go out on a limb and say that snapchat isn't meant for professional collaboration.

the app or the company?

The employees will certainly be collaborating with 500 fewer of their colleagues going forward.

I suppose the remaining employees had better collaborate as much as possible, quick while they still can.

The app

That's like complaining that the people making fish-finding software aren't doing it from onboard a boat. Just because their users are expected to be remote from one another doesn't mean remotely is the best way for them to work.

same could be said about a company’s commercial real estate holdings / leases - arguably more accurately.

context matters, and experience lends understanding. so yes, remote workers may better understand a remote context, which may be a benefit, or not.

whereas accounting is mad that money is being torched needlessly.

just because you don’t see the relation, correlation, or even causation, doesn’t make it not there.

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