Treat people like professionals: admit that you did a bad job but that you’d rather protect yourself and not give up any of your salary/benefits and instead you are going to layoff your “family”.
They just forgot to mention it is a pretty dysfunctional one.
Samsung executives by contrast have a tradition of taking serious pay cuts during bad years. Which is still largely performative given their existing wealth and status, but is at least is a measurable material sacrifice.
> If you feel genuine responsibility for the people, then figure out a way to NOT fire them.
I have never seen that end well. One deep, clean cut, is far better than many little ones.
If you have to do back to back cuts because the first wasn't deep enough people start to panic. If you cut back the niceties, you're telling folks there is trouble and you're likely putting off that inevitability (and making the eventual cut deeper, with smaller pay outs for everyone).
The moment you sense the issue, look at the numbers. Figure out what the worst case scenario is, and look at that. Does a deep cut get the people going severance, and the "lets save everyone" approach mean your locking the front door and handing out last paychecks?
> Or be honest and admit that the company needs to make more money/cut costs.
This isn't the convo you have with the people who are leaving, this is the conversation you have to have with the people you didn't let go. Your choices are A) look like an asshole for cutting too many people or B) look like you did not cut deep enough and people panic or see that it isnt the last round. There is NO in between. The only thing that spares you in scenario A is that you gave people enough runway in their exit - 16 weeks (from the article) is a great starting point, but a week per year is an insult.
like reduce the salary of the c-suite staff by 50% so they are only making 300% more than the average workers. or reduce c-suite salary to the lowest wage while allowing them to live off of their stock and other benefits like company cars, expense accounts, etc. granted, that's for the larger companies, but the bigger companies never do anything like that
2.) The c-suite are compensated at market rate the same as anyone else. If the CTO at Patreon is making 400k/yr you can't just cut his salary to 200k, he will leave and take a job somewhere else.
It makes much more than a dent to the ~20 people not laid off, and a likely morale boost to everyone remaining.
Edit: who are the sociopaths who downvote this? You don't think that someone not being laid off isn't going to have a much better outcome than had the been laid off? At least make an argument to the contrary...
there are some people on this venture capital company forum that are venture capitalists. layoffs to boost profits is just another monday
There's a large contingent of HN users that are all too happy to brown nose their corporate overlords.
Also, this is still a ycombinator forum, it wouldn't be surprising if some people around are the ones that lay people off. You know, the sociopaths themselves.
And believe me, most people in well-managed company would accept it to keep the company alive. And y CTO with 400k wont "just find a new job with same payment" next day, thats an illusion. Especially nowdays in these times.
If I would be asked: "reduce your salary by 50% or get fired", for sure I would stay if there is a perspective that the situation may recover in the future. If the company has no perspective future, then you would leave anyway (either implicitly or explicitly by them)
And if you could support your family on that 50% for an undefined period of time.
Depends on how much those 6 people make.
Have you seem C-level compensation in comparison to worker's salaries?
Yes, there are outlier companies, but not C-Suite isn’t just taking a massive check home, it’s a compensation of a inflated salary and comp package, which it most companies never would cover the amount of people let go. That’s often the case at every company.
Perfect way to lose your staff to your competitor.
But they aren't foresighted enough to have handled the situation appropriately in advance. Or they might have run into the limits of their ability to empathise and only understand that they feel bad but not that the fired people probably feel worse. I'd bet more on the former.
In many ways it is a triumph of modern society how ordinary the people are who head these large and complicated world-spanning corporate entities.
But I was told that CEOs were descended from Mount Olympus itself! Billionaires too!
The mediocre have just enough capability to do something right, but little enough that they're constantly surpassed by their more talented peers and never feel safe. So they go into "soft skills" that their more talented peers aren't interested in, and sandbag themselves with authority once they get it. For an extreme example, nobody is ever firing Mark Zuckerberg no matter how many obviously stupid bets he makes, and even if they did his family would have enough wealth for the next 10 generations at least.
This problem is hardly new or exclusive to tech, but we've endured enough decades of Silicon Valley navel-gazing TED talks without now trying to whitewash them as "well they're just ordinary people". Yeah, and I wouldn't trust an ordinary person to fly a plane, why should we feel good about them running companies?
Maybe their more talented peers should learn some of these soft skills and take an interest in authority positions instead of acting like losers? Is there some smart-person conspiracy to put idiots in charge that nobody has clued me in to?
I don't want to be going too far in telling my talented peers their business, but if capable people aren't interested in doing anything to take a leadership position then the leadership is going to be incapable by definition.
Boeing's leadership doesn't care about their aircraft quality beyond legal liability, Meta hasn't cared about the quality of the facebook newsfeed in over a decade, Elon Musk doesn't care about making cars or colonizing Mars anymore, and rest assured Pateron's leadership will be just fine in every material sense, the worst they have to worry about is reputational loss that will likely be short-lived.
Put it all together and you get an incentive structure where outside of small companies/divisions, and the rare exceptional leader, the people who care about the products the least are the ones that make it into leadership, and good luck convincing that club to change their priorities.
Needing to make more money is a given, and they’ve probably explored that as thoroughly as possible. Cutting costs assumes that they have been so wasteful that the costs they can cut for meaningful savings doesn’t include employees that are no longer fuelling growth or revenue. Because if they were, they wouldn’t be letting them go.
That kind of sounds like saying "if you're poor, make more money". It's not bad advice but odds are, they tried.
If a company can take a hit to its bottom line by being bloated and inefficient but saves jobs, is that the right thing to do?
Edit: I can see good arguments either way. The neoliberal idea that all waste should be eliminated seems almost communist / soviet IMO. The USSR grew like crazy by putting people into factories and working them as hard as possible, removing all waste. But with no slack they couldn't innovate and productivity growth stalled. Our productivity growth has also stalled. We outsource or privatise so much that everything is just a race to the bottom with no space to grow, and finding looopholes in metrics or rules is the way to get ahead (like soviet factories finding out that they can churn out crappier products that no one wants but it helps hit a quota).
OTOH boated orgs kinda suck.