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Comment by JKCalhoun | Hacker News Reader

> Intel would sometimes cut jobs during fallow periods but it backfilled them almost immediately.

Smells like corporate bulimia.

When I worked/lived in the Bay Area there was a sense that corporations, and residents of the Bay Area, were moving to Oregon because it was cheaper … but still close enough to Silicon Valley. (Apropos of nothing really.)

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> Smells like corporate bulimia.'

If companies have extra cash on hand, don't we want them to invest it and hire? The alternatives are stock buybacks or just sitting on the cash.

Obviously every bet is not going to pan out, but hiring even on the margin is probably good.

> If companies have extra cash on hand, don't we want them to invest it and hire?

No. Hiring should be a long-term strategic investment, not something you do whenever you have extra cash lying around. If you needed the extra people you should have been trying to hire them already, and if you don't then you shouldn't hire them now.

Depends who "we" is.

If I'm a shareowner, if the company doesn't have any intelligent ideas on how to spend my money, they should send it back to me as a dividend, or buy me out (share buyback).

Please don't waste my money trying to build some immortal empire as a shrine to the CEO's ambition.

There’s an enormous amount of money being made by chipmakers, and Intel is rapidly losing access to it. That doesn’t mean hiring stupidly is good, but spending money to regain its momentum and save the company from bankruptcy is an obvious priority. Stock buybacks aren’t, unless the plan is to extract revenue and shut the place down.

Bankruptcy can only happen if you are in debt, which Intel massively is, because they ARE spending enormously to try and catch up.

I'd rather they accept reality, slim down to size, focus on making good Xeons again, and stop acting like they have a monopoly they no longer have.

So far, LBT seems to have the right idea.

TSMC as a manufacturer and Apple/Qualcomm/Nvidia as designers make an enormous amount of money.

Everyone else, like AMD/Global Foundries/Samsung/Intel don’t seem to be making an enormous amount of money.

The margins are all in the best chips. Less than best is commoditized.

No. Generally speaking, I want corporations to return capital in excess of operating needs to shareholders unless they have actual high-expected-return, ready-to-be-executed plans for what to do with their money.

When corporations just invest because they have money, there is a gigantic agency problem, and executives have a tendency to burn shareholder value on vanity projects and fancier headquarters.

Stock buybacks are exactly what I want wealthy companies to be doing with money they don't have a high expected ROI for.

Not entirely disagreeing, but Intel feels more like a poster child of buybacks that (in hindsight and in comparison with their peer group) would have been much better spent reinvested into the company https://www.ineteconomics.org/perspectives/blog/how-intel-fi...:

* they've done about $152B in stock buybacks since 1990 https://www.intc.com/stock-info/dividends-and-buybacks. I think... ~$108B in the last decade.

* during the same time period they fell behind TSMC and SEC in semiconductor fab , missed the boat on mobile (couldn't really capture the market for either smartphone or tablet CPUs), and are missing the boat w/AI training https://www.hpcwire.com/2025/07/14/intel-officially-throws-i...

Discussion of Intel's buyback behavior as excessive and wasteful was also picked up on during all the discussion of CHIPs subsidies last year: https://news.ycombinator.com/item?id=39849727 see also https://ips-dc.org/report-maximizing-the-benefits-of-the-chi...

Intel did not do a good job with its (sizable) investments for the last decade. There's little reason (at least for me, a casual observer of their failure to deliver good chips) to think they would have done a better job by just throwing (more) money at the problems they were trying to solve.

The existence of markets Intel didn't dominate does not, to me, imply that it would have been a good use of resources to throw (more) money at the markets they didn't dominate. Not every company is good at every business, even if they dominate some seemingly related market.

Intel is the corporate version of Germany.

No stock buybacks, pay dividends, that's why the instrument exists. Stock buybacks are an aberration of hyperfinancialisation, just pay the shareholders proportionally to what they own.

Dividends don't currently get the same tax advantages in the US, so until tax policy gets revised, it's better for the shareholders in question if there's a buyback.

There's also the matter that dividends are meant to be long-term and recurring. So it's not great for one-time windfalls.

Companies should buy back their stock if their stock is undervalued.

This anti stock buyback meme is silly. It’s like people who are anti shorting stock. Companies list on the stock exchange in order to sell their own stock to raise capital. If they have excess capital, absolutely they should be able to buy back their stock. And buy other companies stock if they see it as undervalued also.

It's not silly, it's a terrible incentive for companies flush with cash and paying bonuses to their executives in stocks, it becomes very easy to manipulate the stock price with stock buybacks for a larger bonus while letting the company flailing with underinvestment (or simply missed investments).

A great case to see the absurdity of it is Intel, doing stock buybacks for almost a decade to push its stock price up while flailing around and losing its edge, if it was paying high dividends while flailing around then major shareholders would be asking why the fuck would they be paying dividends while the business is losing competitiveness but by doing stock buybacks it kept investors "happy" so they could jump ship and let the company fail on its own.

Stock buybacks have perverse incentives, everyone responsible for keeping the company in check gets a fat paycheck from buybacks: executives, major investors, etc., all financed by sucking the coffers dry. The buybacks at Intel just made the company as a whole lose money, they bought back stocks when they were high and it only dipped since then (10y window).

The shareholders got what they wanted with Intel. If it was the wrong decision for Intel doesn’t mean it’s the wrong decision for everyone and should be banned.

The idea that the stock market can only be used to flow shares in one direction has no merit. If you want to regulate executive compensation do that with direct clear regulation on executive compensation, not via some indirect rule change on the stock market.

Stock buybacks are the indirect rule, it wasn't even allowed for most of the existence of stock markets, it's the odd one out which created perverse incentives.

It's not about regulating executive compensation, it's to close a gap that was opened and only led to poorer decision making at the executive/board level, there's no advantage to the company. It's a stupid instrument with no reason to exist except to return money to shareholders in a way they can avoid taxation events.

If you asked CFOs why they choose stock buyback over dividends, it is simple: tax efficiency. When you pay divs, holders are required to pay tax immediately. Buybacks act like reinvestment and are not taxed until the holder sells their shares.

The only reason there's a difference is because of the psychological and incentive-based effects of 'number go up'.

Buybacks are in effect and by definition a kind of fraud even if people make excuses for it or do not want to see it that way. It's the equivalent of a vested interest driving up an auction price or, you know, buying a bunch of your own product and then using the "sales" figures to convince others to invest or buy your product at a higher rate/price due to artificial scarcity.

The fact that c-suites authorize buybacks largely to boost the stock price in order to trigger their own performance bonuses tied to the stock price only highlights that point.

If you did something even remotely similar, you would be prosecuted for fraud, because it's fraud.

1) Wrongful or criminal deception intended to result in financial or personal gain.

2) A person or thing intended to deceive others, typically by unjustifiably claiming or being credited with accomplishments or qualities.

The problem though is that the incentive structure is so that none of the involved parties has any disincentive, let alone an adversarial incentive to end the practice, let alone has standing to do anything legally, short of sabotaging their own stock value.

It's a totally perverse and corrupted incentive structure, similar to why both Trump or Biden, or Democrats or Republicans have the real will or interests in ... non of the involved parties have any interest in revealing the rot and corruption, and all parties involved have every incentive to keep it all under wraps, suppressed, covered, up and distracted from.

In some ways, a civil activist organization could in fact buy a single stock of one of the most egregious stock buyback stock price inflation causing corporations and sue them for fraud and deception, but it would have to come with a claim at manipulation of the market due to fraudulent manipulation of the price discovery process similar to a light version of cornering the market through restriction of supply, i.e., cartel behavior.

They can only buy back stocks from people who want to sell them. The people who sell them do so because they believe it's a good deal. The process puts cash in the hands of those sellers, who can then go on to invest in something else, keeping the market more liquid rather than the first company sitting on cash reserves. The price of an individual stock is pretty much meaningless, you must multiply by the total number of stocks outstanding to determine the market cap. So it is not the buying back of stock that represents any fraud.

If there is any fraud, it would be having performance bonuses tied to individual stock price, rather than market cap. But blaming the buyback itself, is short-sighted.

The first paragraph I agree with but not this part:

    > performance bonuses tied to individual stock price

This is pretty common for the board to setup stock price targets for the CEO, then pay large bonuses (cash or shares) for beating the targets.

You are making a basic mistake. Assuming that the originating company or its interested parties are regular market participants.

They are in effect more like the guys who stand around a cup and ball scam to make it look like there’s action and winners and keys you think you could do better.

A buyback is a removal of the security from the market, not participation in the market.

It’s like people buying their own books to drive up sales in order to get in lists to promote more book sales, which is when they then supply the market with the books their bought once the price has been artificially elevated and has become sticky.

You may not like hearing that and it’s clearly not the mainstream street preferred narrative, but that’s what it is.

I don't find anything you said very convincing. You are simply characterizing a transaction as nefarious, and perhaps conspiratorial. Of course, there are incentives and perhaps even misincentives around such sales, but that doesn't mean they are inherently bad.

There are mechanisms that are commonly employed to REDUCE the price of the stock, (ie. a stock split), and nobody bats an eye about that. Buying back stocks is a reasonable way to employ cash reserves, and protects the firm from exposure to foreign exchange rate, and inflation risks.

I will agree with you that the way executive bonuses are structured can be a perverse incentive that borders on fraud. But blaming the buyback of stocks itself, isn't grounded in any inherent economic misdeed.

Do you realize how extensively companies have to document their buybacks? Who is deceived?

There is zero fraud implied or even suggested by stock buybacks. They are heavily-publicized-in-advance returns of capital to shareholders. That's it. The sales are often offset by the creation of new stock via RSUs, and in that case just reduce the dilution intrinsic to RSUs.

Shareholders want executives to be incentive-aligned to reduce agency problems. Stock based compensation furthers that goal. If a manager doesn't think they have a better use of spare capital than returning it to shareholders, returning the capital is exactly what shareholders want. There's nothing nefarious here.

You assume that simply because information exists that people will not only understand it, do so correctly, and act on it rationally and not emotionally.

Again, it’s like the Epstein narrative; the right and good thing is to release the information, but the whole system, both sides and most in between have a vested interest of one kind or another to keep it under wraps. We know there as organized human trafficking, sexual slavery, abuse, rape, and various types of racial master race level eugenics associated with out of control “intelligence” agencies, including for foreign governments against the American government …. It everyone is just covering it up because everyone is implicated or is mentally compromised and the “peasants” unlikely have the organized power to change that.

That is also all documented, in fact it was documented for how many years? 10? 15? 20?

Ever hear of a guy called Madoff? He sure made off with money of sophisticated and smart people for several decades.

Don’t lie to yourself about the confidence in the system.

On the other hand, the Shanghai stock index has been basically flat for years, despite Chinese companies rapidly growing and dominating industry after industry. Our companies have been very good at returning value to shareholders, while Chinese companies have been re-investing. There’s a very real possibility that we may come to deeply regret it.

Because China is starting from a position of weakness and catching up, it is by definition easier for them to find high ROI projects to spend money on. Just wait 10–20 years when China is thoroughly technically ahead of us, and Chinese companies will be more like American ones.

China is massively investing in the entire energy generation sector, renewables, advanced nuclear, batteries, EVs, full self driving. This is the future we were supposed to be investing in, but we’re losing it. Maybe we got some share buybacks instead.

The share buybacks enable and encourage investors to move their money to invest in other things for the future. That's usually a better idea than e.g. Intel, who know nothing about other wind farms, building their own.

This is the thing we tell ourselves because we like share buybacks. The question is whether the numbers actually tell this story.

The investors are quite capable of taking the money from those US stock buy-backs and investing them in Chinese growth sectors.

I mean, I'm basically doing that.

That said, I'm an unsophisticated retail investor, and if I understand right all people like me combined only add up to about 20% of the market.

My concern is that America will become a sprawling no man’s land as the economy contracts to 20 percent of its present size. Rapid collapse is unpredictable and seems like a bad idea for a country with such a huge military presence.

Rapid collapse is indeed unpredictable, and always bad; but the military is heavily dependent on the economy, so it starting huge probably won't make a huge difference.

Especially if the US happens to do the collapsing at around the same time the rest of the globe moves away from oil etc., given how dependent the existing military equipment stockpiles are on petrochemicals.

I would not read too much into the lackluster performance of Chinese stock markets. Something is weird about a place with a fast growing economy, but the stock market performance is so poor.

This is completely opposite of how budgets work inside companies. If a department has a specific budget, then it is generally considered very bad to return part of it ever. Instead, they just find new things to do with it. Now, of course, sometimes, the new things are vanity projects, but I find that 80% of times those are actually very good investments.

You just described an agency problem.

Investors in a corporation don't want individual teams to spend money "just because it was budgeted, even if we didn't have a good thing to spend it on".

I, as a manager of a team at a corporation, of course have a partially adversarial relationship with investor goals; I want my team to be happy, in part because happier teams often are more productive, but in large part also because it's just nice to spend my work life working side by side with people who are enjoying their perks.

If my entertainment budget directly (or even partially) reduced my team's bonus pool, that would be crappy for team cohesion, but it would probably make me think more carefully about taking everyone out to lunch.

Or even dividends, once they've set up a solid rainy-day fund. Anyone remember dividends?

Roughly 80% of SP500 companies pay dividends

There is a good reason for it: Many pension funds and large money managers have a hard rule that they will not invest at full into a company without a dividend. I'm not saying that you have to agree with that strategy, but it is incredibly common for US pension managers. Also, some stocks pay one cent as their div, just to qualify.

It's the disposable side of the practice that I disagree with. Hiring should feel like a marriage or a commitment for any business. Just my opinion though.

I think we've become too complacent/accepting of corporations just laying off employees with what amounts to a shrug.

I'm kinda with you that in most situations corporations would probably be better off hiring slower and then riding out downturns on cash.

But big picture I disagree. We kind of need creative destruction in an economy - we need to be able to lay off people in horse buggey industries so that they can be hired to make Model T's. We're better off focusing on our social safety network and having a job market that encourages some amount of transit between careers.

I agree with the social safety net. It feels as much of a long-shot though as corporations acting more responsibly. :-/

> Hiring should feel like a marriage or a commitment for any business.

Treating the employer/employee relationship like some life-long commitment sounds like pure hell. It is a transaction. I don't want it to be anything more than that.

I wish it weren't such a big deal in ones life they keep their current employer (from the perspective of things like health insurance plans, retirement plans, PTO balances, basic income). If it weren't so god damned painful to change jobs or have some gaps longer than a month or two then maybe we'd have a chance to just treat jobs as jobs we move between instead of a sacred vow for life lest we be thrown into chaos when broken.

> Hiring should feel like a marriage

it does though doesn't it? divorce is so common that marriage no longer feels like it has any permanence like you imply it does

I guess I meant hiring should feel like I feel about marriage.

Married 27 years — still on the first wife. :-)

Good for you, terrible analogy though

The average marriage lasts about 20 years. Companies should be able to fire people, but they shouldn't be overhiring in good years and then tossing people out in the next rough patch.

Divorce may be common, but a divorce without trauma is still a rarer thing.

getting fired is without trauma?

Are you still producing your fired certificate, 17 years down the line, for every background check, rental application, and date?

I don't know what a fired certificate is unless you're making a funny about you needing to do that with a divorce certificate? I also don't know what that is either. There's a divorce decree issued by the court, is that what you mean? Have you actually had a date ask to see legal documents about your divorce or any of the other situations? I just have no experience with any of that so it seems very strange, and feels like your just belaboring the point.

Yes, divorces are processed through the courts. Yes, it comes with a certificate. Yes, it affects your legal life forever more.

As that's all pretty basic... Maybe you... Don't understand divorce well enough to say whether or not it fits an analogy.

Been there done that got the decree and everything. You’re right, I don’t understand your musings as not once has anyone ever asked to see proof of my divorce. Some forms that ask about marital status might have a divorced option, but not all. It does not affect my credit. It does not affect job interviews. I really just have no way to relate to what you’re saying as it has never happened to me, nor have I ever heard anyone else complain about needing to provide this certificate. You are literally the first person. That’s such an outlier that I have to question its legitimacy.

Go get a background check, as legally required for most job applications. Equifax cares about more than just your credit rating.

But as you call it a "decree", and I only know one legal system that does (Texas), we're probably from different backgrounds here.

I've had plenty of background checks. Not once have I ever been asked to provide divorce documentation. I've had security checks as well. Have I been asked if I'm divorced? Sure. Never have I needed to show someone the details of the divorce itself. It's not my employer's business who got what in the divorce.

So let's just flip this. Why have you been asked, and what were they asking to see? Proof you are divorced? Did you claim something that you were awarded by the judge and had to show proof of it? If someone is asking for that kind of information, did you not ask why they needed and get an answer? It would be much easier if you just explained your experience as it is the outlier here

You're the outlier - and the explanation is simple. Where you are, divorce and family court filings are part of the public record. A request isn't necessary, because the background checking org already can see the full documentation. They care to, because who you are in debt to, can influence you in future. And it takes about 3sec to confirm this, rather than sitting there saying "no, you".

Your employer enjoys your data without your say so [0].

EU, UK [1], Au [2], NZ... They have to ask. So they do.

[0] https://www.dshs.texas.gov/vital-statistics/marriage-divorce...

[1] https://www.equifax.co.uk/Products/learning-centre/marriage-...

[2] https://www.auscheck.gov.au/what-we-do/background-checks

There is also a bit of strategic, defensive hiring that happens, i.e., hiring people so your competition cannot hire them, let alone at a lower salary if you were not hiring. It's a little talked about issue, because it is mostly expressed as a type of C-suite FOMO tied to their performance and stock option incentives, i.e., "we need to hire because X is hiring and we can't look like we are not growing/hiring because that will drive the stock price down and risks my stock options, even if we are doing massive buybacks to glaze the stock price".

It is another significant flaw in the "capitalist", i.e., publicly traded corporate system that incentivizes all the various financial shenanigans to generate false stock performance to enrich the c-suite.

You have omitted shareholder dividends.

Stock buybacks are shareholder dividends with better tax consequences and less expectations.

For buy-and-hold investors stock buybacks do nothing at all whereas dividends create real income.

For buy and hold investors, stock buybacks do nothing, whereas dividends create real taxable income. Either you take the income, minus taxes, and spend it, or you reinvest it into the stock, again minus taxes.

If you reinvest it into the stock, you've had to pay taxes on the dividend amount, so you've lost vs a buyback.

If you want to spend money and your stocks don't issue dividends, you just have to sell some of your shares. Selling $X of shares will almost always generate less taxable income than receiving $X of dividends as some of it will be a return of capital; so again, if you take $X out of the holdings, you've lost with a dividend vs a buyback and you sold $X.

This is disregarding the definition of buy-and-hold investors. As the name implies, they don't sell stock. Whether or not buy-and-hold is irrational or not is a completely different topic.

Dividends create real income and decrease stock value.

Any time you want that to happen for you, simply press the sell button for some percentage.

Why would you want the company to decide the timing and the percentage for you?

Because dividends are (at least in theory) perpetual.

Selling a couple percent of stock every year or two will work for at least a century before you have to adjust the plan. Something else will come up first.

Can buy-and-hold investors use margin?

Of course, but margin is expensive for retail people.

If one is pushed out of the Bay Area but wants to stay on the Left Coast and have the next best approximation of the Bay Area, then the Portland metro is a natural default. At least in my case...

> there was a sense that corporations, and residents of the Bay Area, were moving to Oregon because it was cheaper … but still close enough to Silicon Valley.

It's a different state and a 9-10 hour drive away; in what sense is it close?

At least in the past, Intel owned a dozen 35-50 pax regional jets (https://www.planespotters.net/airline/Intel-Air-Shuttle-Airc...) and had regular scheduled flights back and forth between their Santa Clara, Phoenix, and Portland offices. (They now seem to be down to two- rise of Zoom?)

Note that these were NOT executive jets for C-suite, these were for all employees who had meetings at other locations (at least according to people I've met since I moved to AZ a few years ago to be near my in-laws).

^^ Can corroborate. Intel had a fleet of airplanes for employee use commuting between sites. You did not have to be an exec or VP to fly.

I remember the airplane tail had the number 386, or 486. It was difficult to get a seat, but it was based on first come first serve, so you just had to be diligent on the booking web site.

Coming out of San Jose, the plane would enter this corkscrew to gain altitude. I guess to avoid SFO airspace.

I would often see high level executives on the same plane.

> airplane tail had the number 386, or 486

Ha, you're right:

https://www.planespotters.net/photo/1640095/n486hf-intel-air...

https://www.planespotters.net/photo/355961/n386ch-intel-air-...

There's even a 286: https://www.planespotters.net/photo/1738295/n286sj-intel-air...

Same for Nike, I think to LA and back – although it might have been cut as well.

Nike still has 3(maybe 4) jets in the Hillsboro hangar. I run by there regularly. Saw one taking off yesterday.

It is actually cheaper to rent in Portland and fly commercial daily to SJC than it is to live in the bay area. I did this commute regularly since my family is settled in Portland. End to end it is only slightly slower than Caltrain (sfo->SJC) as well... Actually one of my more pleasant commutes. I live close to the airport and with TSA precheck I would show up 15 minutes before boarding, be in air for 90 minutes and then to the office. If I leave at 7 then I'm perfectly on time for 9AM and then fly home at around 7:30 to be back in bed around 10. Even have time for dinner and drinks after work.

> If I leave at 7 then I'm perfectly on time for 9AM

I don't doubt you but most people would not find a 2-hour one-way commute pleasant.

There's a lot of downtime in that commute. Sitting in an airport. Talking to people. Flying is fun if you're into it.

Anyway, a 2 hour commute is normal in the bay area . I used to do the south bay to San Francisco Caltrain daily... Flying is better. Free drinks for one thing

Everyday? No. But a few days a month? Absolutely. It works really well.

I thought 9-5 + 1hr commuting was bad enough. What you just said is crazy.

Different strokes for different folks.

You don't have to answer this question, but: do you live off the I-205? I'm always astounded (well, annoyed) at how, living in the inner east side, getting to Multnomah Falls via I-84 would sometimes be quicker than getting to PDX fir the 205.

I live in inner NE. I'm two miles from downtown via the broadway bridge, and four miles from the airport via surface streets (about a 10 minute drive. If someone texts me while picking up bags at baggage claim, I will be at the airport before they are out). If I lived farther out, then commuting to the airport would be a problem. However, central Portland is very livable compared to most cities.

How much did you pay per flight? Your carbon footprint must put Taylor Swift to shame...

I didn't commute daily. Just a few times a month

Yeah that's absolutely insane. I can't imagine the mental gymnastics needed to do that.

Why? I own a house in Portland. Company closed the Portland office. My family is settled there. It doesn't make sense to move your whole life just for a few days a month in the office . I didn't do it daily. However I did price it out and it is cheaper.

Pure financials can more than explain this, if you have a family and want space for them. Let's do some napkin math, from a quick Google search it's 150$ round trip, so 3000$ a month assuming 20 work days (maybe even less with frequent-flyer status, cashbacks and rewards).

For a 4 bedroom house, Zillow gives me around 7-8k a month in rent for SF and around 4k for SJ, so you'll at least break even and have a better quality of life for your family even if you won't see them much during the week.

Anyway: The fact that a simple adequate house for a family runs at 4k in the US is ... maddening. 1500 sqft is around 140 m², a comparable house in Berlin (one of Germany's hottest markets!) runs ~2500€. How one is supposed to live in the US when not on a typical techbro salary, I have no idea how y'all even manage that.

Did the employer know you didn't live there?

Yes. This was part of the deal; that I show up in the office every once in a while. They paid for my flights too, so it was actually cheaper than renting in the bay area, and certainly more convenient (my wife and kids are well settled in Portland). The flights were so cheap ($90 - $110 round trip with south west)

A lot of people "on the coast" were happy to relocate a bit further north where they still had beaches, mountains to romp around — only more affordable.

Definitely not close as in "commute close".

Maybe more like "close to feeling the same as the Bay Area"?

(You can believe Portlanders hated Californians that moved up there. Or so I've been told.)

> (You can believe Portlanders hated Californians that moved up there. Or so I've been told.)

They still do, only it's not really Portlanders anymore, it's all the smaller cities that hate them. Why? A couple reasons: they came in and pay over asking price for housing, driving up prices across the board so those working for local non-conglomerates have a hard time affording housing. And then they vote contrary to how the locals do (locals, I might add, who didn't have any problem with how things were run before, even if their "betters" felt they were "backwards").

Basically, they end up burying the local culture and replacing it with California.

Another thing that would've sweetened the deal -- given certain priorities -- is how close nature is: Oregon's restrictive limits on urban area boundaries means that in 45 minutes you're out in nature, and in 1 1/2 hour you're skiing on Mt Hood.

Also, no sales tax!

PS – as someone who spent hundreds of hours on Glider PRO as a kid, thank you!

Culturally, also that is physically close in the west.

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