After the Layoffs
42floors.com
42floors.com
I don't know if it's good advice or bad advice, but the dissonance was strong.
PS: I still respect the CEO. The actions (severance, health care, references, etc.) speak loudly, even when the words, no matter how heartfelt and sincere, aren't always the right ones.
I would lean to believing the other way given this comment, but it is not quite clear from the text.
It's an unfortunate natural response though because if you were truly empathizing with them you'd recognize that your feelings in that situation (since you're in the much better position of still having your job) don't make them feel better, but make them feel worse. I'd guess the problem is that comparing your state in any way to there's causes a more negative reaction because they're not in a place where they'd want to empathize with you - the approximate cause of their current lay off.
Outside of the interaction with the employees you're laying off (which I imagine is not the intended audience of this post) I think it's okay to talk about how it feels to have to do this. To the employees though, you can really only say that it's a bad situation and you'll do what you can to make it the least bad possible.
I noticed is that he took responsibility for strategy though, which is refreshing to read every now and then.
They don't seem to care - at all - about their industry, their space, whatever their value proposition to their customer is. They just care about being a startup. It's super annoying to be honest.
Weren't these the guys that famously wrote a blog post saying that culture is everything, and that people that come to interviews in suits are automatically denied?
https://web.archive.org/web/20140618142018/http://blog.42flo...
Not automatically denied. That's only ding #1.
You also lose-- ahem don't win-- points for leaving the interview on time, neglecting to bring a fancy gift, and failing to obsessively read the company blog.
My personal favourite bit is sneering at the guy for saying "you can never overdress for an interview" - I can just imagine the poor candidate sitting there in his suit, feeling horribly out of place amongst these imbeciles, trying desperately to make light of his situation with that remark (it's probably just what I would say myself, in fact) and unwittingly providing more fodder for their asinine blog.
It got me through the awkward moment, but I didn't get the job.
"it’s totally fine to ask someone before you come into the office what appropriate dress means" = it's totally fine to understand the market before deciding to enter it
"He was failing the go-out-for-a-beer test and he didn’t even know it" = they just failed the go-into-a-new-market-beyond-your-means-test
Maybe Jason Freedman's lack of humility in the past led him to the idea that led to these lay-offs, and hopefully he now has some humility and focuses on the business not how much of a cliché he can make his startup.
Perhaps we're going full circle and the people who want to tell their employees how to dress are back in charge. But now instead of getting a choice between a button-down shirt in white and one in light blue, the choice is between a tee with a funny picture on it and one with a vendor logo on it :)
Does anyone else see that as odd?
You're not trying to date the company, nor are you family. Don't get me wrong - being enthusiastic and passionate about your work is important. You don't know these people though - any form of gifting just seems like an opportunity to make things really awkward.
Then don't be. What on earth is wrong with transparently talking about the difficulties of starting a company? What is wrong with writing about the people side of things?
In my experience there's nowhere near enough of that stuff. I don't get the sense they're just trying to be a startup. But they're talking about what it's like to run a startup. I really appreciate that.
I'm glad that 42floors was decent enough to provide what sounds like a great transition -- health care, severance, job placement, etc. That certainly helps soften the blow and it's really only fair to those who basically changed their lives to partake in the experiment with you.
I think it's totally fine to do an experiment that may end up with you having to let people go, as long as you acknowledge that and take good care of them. And plan accordingly. Don't call it off when you have no money left and then use that as an excuse to screw everyone.
I felt mad because my team and I had worked crazy hours to pull off a miracle and the reward was everybody lost their job literally 1 week after the launch. I totally understand that raising capital has more uncontrollable variables than programming - I have to admit I was a bit angry that the other end of the company didn't meet the ass-kicking standard of the tech side.
I referred both guys to other jobs, one of whom took one of the offers. The other was a master UX guy so I was extremely bummed to not have him on a team with me anymore. He could get any gig he wanted in the blink of an eye, so it was no great loss to him.
It really does suck on both sides.
Also, I suspect you've learned your lesson to never accept investment in payments, or alternatively, unless it's in the bank it doesn't count. :)
That was a pretty dick move on the part of the angel. Did they say why they stopped paying?
You'd think with a contract and a legitimate investor that you're ok, but it really is all hot air until the money is in your account.
Couldn't you describe any employee that way?
Despite best efforts on everybody's part, sometimes (I might be tempted to say "often" wrt startups) your job dries up. Even if it's obvious that the company was in trouble when you look back, for a variety of reasons you are never going to be given any kind of notice that things are not going to continue as they were.
Sometimes companies are very forward thinking and plan well. In that case they let you go while there is still money left to pay a severence. Sometimes they grind the company into the dust and there just isn't anything left. Often the business people are hoping beyond hope for a miracle to happen and when it doesn't there isn't any money that can be earmarked for severance. As pointed out, the law allows companies a fair amount of leeway here.
Don't leave it up to your employer to look after you. Make a plan. What am I going to do if I loose my job tomorrow? Make sure it is a viable plan. If it isn't, do what ever you need to do to make it viable as soon as possible.
well, you either give good severance and everybody on both sides if not happy than at least not depressed, or, well, you give small severance, if any, and a lot of hard feelings around.
My experiences of layoffs are:
1. A job in a huge software house. The company didn't hit the 12% profit margin it had promised it's shareholders, making a "measly" 10%. People knew when they were being laid off when the person going round with some fold up boxes dropped one at your feet and said, "pack your stuff". I wasn't laid off at that time but plenty of people I worked with were.
2. A minimum wage job when I was 19 years old. The owner calls us in and sacks a bunch of us in one go, with a big fat "sorry". I asked what the severance package was, since no-one else wanted to ask. He said, "erm, er....", and when it became clear there wasn't one because he hadn't enough empathy to even consider the proposition I said, "you can at least give us some money to go to the pub." He laughed, others nervously laughed. I said, "12 of us multiplied by a tenner each is £120". I eventually got £60 off the miserable excuse for a cunt who had his new Aston Martin parked on the carpark directly outside the window. (Yes I made sure everyone who got laid off got an equal share of that £60 at the pub).
This was 20 years ago though (man, that's depressing!) and nowadays I would have spotted the warning signs a long way off and planned my exit strategy / final negotiations much better.
I still think he was screwing us over, though. And I still think he was a cunt :)
That's the sad part about layoffs: Until your 30ies, not only you get screwed over but the experienced ones are long gone and aren't part of the battle [1].
[1] battle or discussion, depending on whether you need the job.
[1] First released in 1975.
The engine at least in the straight six version was a warmed over Jaguar AJ6 engine. This was however very good.
Why does owning an Aston Martin make someone a cunt? I am American and unfamiliar with British cars.
What I would have personally done in the situation would be to sell anything I had that I didn't need, to keep the company afloat, and my employees paid, because I know if we can weather it, it'll pay off in the end.
But a lot of people are assholes and don't give a shit about their employees... And that's why they have a revolving door and churn through employees like no tomorrow.
Contacting (in the uk at least) is much more honest, you work you get paid, you want to have a sick day, you don't get paid. If your crap you go, if your good they try to keep you.
It's OK to own nice cars. If the company is doing well, drive it to work.
If things are not good, it would be good form to at least drive a camry to the office.
Maybe. But most employees don't seem to care that:
1) the boss may have gotten the money to buy the car before owning the current company. Most people in business have had multiple businesses throughout their lives. Even if it's not, they risked everything to create the company that now employs you.
2) The boss probably lost much more than the employees. When an employee loses a job, it sucks. But they can often times get unemployment and find another job (I've worked for plenty of companies that went under over the years).
The boss loses: money (if they are a co-owner, they probably invested money), reputation, and credit is possibly damaged.
EDIT: Don't mean you personally. :)
Laying people off who are on minimum wage with little more than a sorry whilst having your fancy car on full display outside the window does, however.
Sorry for any offence caused.
Like I completely agree with where you're coming from, but adhering to your particular worldview, what words can I use?
Does jerk eventually become a taboo term as well?
I realize this is contrived but I think it is a relevant question to ask.
Where does this societal need for political correctness fall apart?
Why do I have to go around trying to not be crass at every single turning point? If I'm always trying to be completely inoffensive how can I possibly hope to make meaningful statements when so many of those statements are reliant on offensive ideas??!?!
I want to be a good person m8. I'd also like to be genuine.
What if I'm genuinely offensive? Seek to make changes in my nature I guess?
If words to blacklist or be offended by ran out, new ones would need to be invented to keep the fervor alive. There is now a large culture built on being offended all the time.
If you want one with a V-12 (Which, if you're buying an Aston you do), you're looking at $200k, minimum.
The 2005 Ferrari F430 your boss drives may have cost as little as $100,000, and your boss may have financed part or most of it. Good credit + an above zero net worth will get you very nice finance terms. If you looked at the car alone, you might deduce that your boss is quite wealthy, but in reality their net worth could be less than $25,000.
Even if you are into cars, a person's choice of vehicle is probably not going to give you any meaningful insight into their personal finances. Many people just like status symbols because they communicate how the person wants to be seen, not how they actually are.
Flashing status symbols in front of people who can't or don't realize they could obtain them is uncouth, though.
Only $100K?! Holy fucknozzles, I'll take five of them!
[eyeroll]
[eyes nearly roll out of head]
Low end for okay new cars is $10->30k. Most BMWs are quite nice, reliable cars with low maintenance costs. Acquiring a used one for the price of a new lesser car is a perfectly reasonable thing to do.
Now, if you're snarking at spending $15k on something, I'm not sure what I can tell you.
If you've never spent $15k or more on something in a year, I guess you've owned neither a vehicle nor a house, and don't rent in a highly desirable part of a metropolitan area.
I like mine and it's reliable, but 'low maintenance costs', that I wouldn't say...
Your guess is absolutely incorrect. The difference is that I don't consider $15K to be chump change.
By all means, though, do continue your condescending snobbery. It just makes everyone around you look all the better.
We're getting pretty close to trading up the lower-valued car for a 5-to-8-years-used one with around 100k miles on it, costing us about $13000-17000. That requires planning and savings, and maybe a bit of financing. $15k is serious business to a middle class household, and we would expect that purchase to last us at least another 5-8 years, whereupon we can pawn it off on a kid as their starter vehicle. We want to ride it all the way down the depreciation curve, then take whatever is left in it as a charitable tax deduction.
It definitely is not chump change, but it isn't entirely out of reach for the middle class, either. It is, however, well beyond the ken of lower-paid employees.
The range of $10k-30k for new cars is completely bogus. You are looking at a bare minimum of $12k for a glorified go-kart and $16-18k for a decent sedan with automatic (or CV) transmission. Those used B-Mers going for $15k are probably about the equivalent of a year-old Honda Civic. If you can afford that, you are well off, and very much above the median household income for the US.
Ancestor post shows a serious lack of knowledge of the economy outside the Bay Area. For huge numbers of people, the value of that car is still well above anything they might be able to get for themselves. Deprecating $15k as not being all that much money is somewhat insulting to all those people for whom such an amount would exceed their entire net worth. By that perspective, the guy driving the $100k car in to work, to fire some people, is lucky that so many people in the US respect other people's property, even if they are hugely self-centered assholes. $100k can buy an entire house in some places, complete with rooms, floors, and indoor plumbing.
Furthermore, if anyone with a net worth of $25k is driving a car valued at $100k, they have no business whatsoever making business decisions at any company that employs me. If they make shit decisions in their personal life, they will probably make worse decisions with other people's money.
>If you can afford that, you are well off, and very much above the median household income for the US.
Agree on point #1, disagree on point #2: one of my points is that you don't need to have 15k cash-on-hand to drive a car worth 15k, but driving said car makes you appear to be much wealthier than you are.
>Ancestor post shows a serious lack of knowledge of the economy outside the Bay Area.
Not at all. SF is just a good example because of the prevalence of "luxury" cars and "rich" people who don't actually own their surprisingly low-cost cars outright.
>If they make shit decisions in their personal life
This was my point exactly. Appearances can be massively deceiving, and in many cases, they actually are. Judging someone's financial situation based on the car they drive doesn't factor in their income, how much they're willing to spend each month on a car, and how much debt they're willing to take on for it. People do silly things. I think the combination of easy access to credit (i.e., debt) and "keeping up with the Jones" is to blame.
Given the nature of financing, and the nature of an automobile as an asset, I have to question the sanity of anyone obtaining a loan to buy any new car, which drops in resale value the instant you drive it off the dealer lot. If the car in question, new or used, retails for more than $25k, I no longer need to question; at that point, I know the person is insane.
If you can make a $25k down payment on a $100k car, you could pay cash for a $25k car and own it outright. The only reasons anyone should be taking a loan to buy a car are as follows:
1. Owning the car would increase that person's potential to earn disposable income to a greater extent than the loan costs would reduce it.
2. The person has no realistic means for saving up for the purchase price of any acceptable car without having such a car already.
The traditional, rational means of buying a new luxury car is to first buy the best beater you can afford at that moment, run it into the ground, and repeat that step until the money saved by driving beaters and junking them is enough to buy a reliable car that can eventually be resold. Then, you continue saving and trading in your old vehicle until you finally achieve the quality of vehicle that you desire. The best trade-in point is right at the end of the flat part of the maintenance cost bathtub curve for that car, at which point you buy the best car you can afford that is still a few years/miles away from that point.
In that light, all those people buying used BMW 3-series instead of new luxury cars are showing themselves to be somewhat prudent car buyers. But you still don't know if they gradually built up to it, paid in cash, or took a loan.
Even so, just about everyone middle class or lower will look at someone driving an obviously expensive car and instinctively think, "what an asshole." It's probably related to the deep-rooted primate instinct for judging fairness in social interactions. All the other monkeys hate the monkey that gets more bananas and doesn't share. That's really the primary reason to avoid ostentatious displays of wealth in public, especially in the wrong social contexts.
This is a classic example of overextending a company. If this new vertical was that risky, then it should have been said every day to those people hired to do this job. "This is a new venture for this company and if it fails we can't support your role. Are you still interested?"
Oh, and the "I feel terrible" bit, as much as you may feel terrible, comes off as insulting to those you are sending home - good severance packages or not. If you really care about them, you give them complete transparency in what's happening WHILE it's happening, and give them the chance to correct the ship for you or get out. Holding on until you can hold on no longer and have to do a massive layoff is a huge failure.
To be fair, sometimes it's not always obvious that it's "happening". It can be a pretty tricky timing thing, and sometimes you try to hold on a bit too long, hoping to turn it around. But, maybe I missed a nuance in the post that you gleaned, which gave a better picture of the timing here.
On another note, maybe I'm old school, but a CEO dropping a bunch of f-bombs in a public forum just isn't professional, IMO. I think it's cool for companies to be edgy and non-corporate, but using language that is generally considered offensive shows a certain lack of appreciation for your position as a representative of your company, board, partners, customers and other stakeholders. This, as well as a lack of respect for an audience whose sensibilities almost certainly vary.
And, the repeated use of it in the phrase "I f*ed up" comes off as overdone to the point of disingenuousness and, oddly, maybe even a little narcissistic.
So the people who were not getting laid off found out before those who did? And they knew who was getting laid off too? That seems kind of wrong to me. Like I get that managers would know that, but why would everyone know that? I think the people affected by the layoffs should be the first to know, right?
Ben Horowitz has some interesting insights on this in this blog article: http://www.bhorowitz.com/the_right_way_to_lay_people_off
I think this is essentially just a better way to make sure that the people 42 floors really wanted to keep knew personally that they were important to the future of the company.
And reading the article again, all they told people is that they were staying, and what was going to happen the following day. They didn't say that the people staying were told who was going to actually get let go.
I think in the context of a pivot away from a failing business model, this move seems smart, not wrong. People affected by the layoffs are being let go - their happiness, in some sense, is definitely going to be impacted by the layoffs. But for those people staying, it seems like they really needed to go through some stuff, and I'm sure they all appreciated the heads up.
It's already going to be a bad day for the people being laid off, why make it a nasty surprise for the people who are not being laid off as well?
Layoffs or rumours of layoffs make that channel blow up with speculation and comparing notes.
I saw a round of layoffs go by at a company I worked at that caught me by surprise. It always felt extremely disrespectful to me that I wasn't alerted beforehand. A simple heads up the night before would have done wonders.
How would the person sitting across you know you are not going to have a job... unless you talked...
Except for close friendships it is quite unlikely Person A who is staying knows who isn't.. no where did Jason mention that he volunteered info on who is going...
Nevertheless, I agree with a CEO giving the heads-up to the staff that's staying, in effect saying, "Look, we're having layoffs [tomorrow or later today] and I just want you to know that your role is safe and we value your continued contributions." That takes the anxiety away from that person without making any meaningful change in the privacy of the affected employees, especially if it's same-day, but evening before is also OK if timing doesn't permit same-day.
I've gone through a few at different places (including financial services post-LTCM and post-9/11) and there is no perfect way to handle it. People are losing their jobs; Americans have this weird tie-up between their job and their identity; when a bunch of people are losing their job for reasons other than incompetence/ineffectiveness, there's going to be a lot of butthurt. No way around it, and the CEO has to balance optimizing for those leaving with the ongoing health of the remaining business (lest more rounds follow). Everyone focuses on those leaving, which is normal, but if you don't leave a healthy company at the end of it, you might as well close it all down and lay more people/everyone off.
Almost all real estate brokers in the non-tech world work as 1099 contractors anyway, paid completely on commission -- no salary and no benefits. This has always been the "standard" in real estate, and pretty much everyone gets into the brokerage business knowing that. Sure, there have been some innovative exceptions over the last couple of decades (limited-service residential brokerages like HelpUSell or Assist2Sell, for instance), but full-commission is the general rule.
So... you are a broker and you take a salary or semi-salary job with a tech start-up... You ought to realize that you are stepping outside the way your business normally operates. You are much more likely to be standing on shaky business ground, much more likely to be discarded when the boss changes his mind about the deal he signed (which happens in real estate all the time!).
Laid off from that company with the snazzy HN post "42 Floors is Hiring!" from a short time ago? If you are a competent broker, you have a career path available that has always been there and will be there for the foreseeable future-- back to being a commissioned salesperson. If you can produce sales, you can get a new spot quickly and without much hassle.
If it were any other demographic, the boss would have had a harder time.
I survived because I had some specific value to the company that the laidoff employees didn't have. This was a plus.
I now knew that I was a better candidate for better jobs.
So as soon as layoffs started, in my mind, I was already out the door, only now I had time to look for a better, more stable, job.
Each time, I found such a job and quickly left.
Side note: the first time I went through layoffs, people were zombies afterwards, even though most of the people who were gone were dead weight. There were enough people who were also let go who were covered under contract that we knew that there was the chance of more to come.
So it made sense to look for someplace else to go.
> Wally was inspired by a coworker of creator Scott Adams at Pacific Bell. In Seven Years of Highly Defective People and What Would Wally Do, Adams explained that his co-worker at Pacific Bell had made a bad judgment call, so management froze him at his position and pay scale rather than fire him. Then Pacific Bell started offering a generous severance package for the lowest ten-percent of workers, so the coworker, knowing management had hinted that he should leave the company and knowing it was better to leave with money than without, had an incentive to become a low performing worker. Adams was inspired by this co-worker's serious dedication toward this goal, and the concept of a completely shameless employee with no sense of loyalty became Wally.
"Wow. Can I take it?" says I.
"No, you're a co-op."
I'll always be grateful to have a place to go that sends me a check for the privilege of my company, even if I hate going there.
42Floors was trying to be the Redfin of commercial real estate? Well of course that doesn't solve the problems created by the existence of brokerages, especially when we're talking about renting or leasing a space, where ROI is already ridiculously negative from the get-go. Where commissions are just unnecessary garbage expenses. Why would it ever have been a good idea to involve brokerages at all?
We’re going to step decisively away from that model now and focus only on providing a great search experience. We’ll leave the deal closing to the professionals.
Over time, we’ll develop our new business model, which will be based around premium listing opportunities for those that want greater exposure to tenants
So the idea is to package the potential client list from a "better search engine" and sell it to those poor, struggling brokerages like it's insider information? Sounds like the MLS on steroids. Doesn't make much sense.
(The link to the homepage in the final paragraph is phrased intentionally to boost search rankings for keywords like "search for office.")
We think they offer a great service, but we disagree with the CEO's attitude and view of his employees, and the world. This concern kind of began with the black hole phone number for recruiters. It seemed like overkill, and kind of a dick thing to do.
Sometimes just because a company offers a great service is not the best reason to use them. We disagree with the CEO and his attitude, so we chose not to ever use their service.
We've had great luck finding both our offices on CL and I'd recommend it to anyone looking for office space then have to stroke this guys ego anymore.
Often severance can be negotiated on an individual basis. Typically you start with some base amount (4 weeks + 2 weeks for every year at the company), but that can vary for different roles. e.g. when a CEO is fired, they typically get larger severance packages than bottom-of-the-org-chart employees (because, try putting out a job request: "Will be CEO for food." World doesn't work that way.)
Also, severance payments+benefits aren't some magic gift from a company—it's a legal contract giving you monetary compensation in return for things like not disparaging the company in the future. Any time a company tries to bind your future actions outside of employment, you have room for negotiation.
"Here is 8 weeks compensation, in return for signing this non-disparagement agreement"
"No, I want 12 weeks compensation or I won't sign your agreement"
But, once you counter, they have the option to re-consider their entire offer, including perhaps withdrawing it completely if they consider the transaction no longer worth it. Then you're still dismissed and get nothing.
All of this is assuming policies under american at-will employment. Any other contracts or government regulations can alter matters. Some countries even have mandatory severance of a year or more when fired, but those countries tend to not have great economic growth prospects (that's where Mitt Romney once said "I like being able to fire people" with the implication of otherwise dead weight just sits around knowing it can do nothing and still get paid).
It's all about making a legal guard against employees trying to "retaliate" over being suddenly released from employment against their will. At large employers, edge nodes in the employment graph can't do much harm to the overall company because they probably don't have insight into the deeper machinations of what's really happening outside of their compartmentalized roles (employer->employee power dynamics are fun).
If I worked 11 years, I get 11 weeks. Under your plan, I'd get 26, aka half a year. I think I need to find a new job.
What does this mean?
"I wouldn’t fault them if they chose to leave."
What would it mean if you did?
And personally I'd rather read this blog post after being layed off than nothing at all.
+it seems like they handled the layoffs pretty well
> he clearly assigns blame to himself
I've only fired people before, never laid people off, but where I'm from the process is long and drawn out, and you have many many meetings that need to focus on a person's failings. Being able to say "it's not you, it's me", and sending someone on their way with generous severance sounds like a bucket load more fun than having to document - in excruciating detail and face to face - why someone you like as a person is incompetent and needs to go.
Everybody but me in that room got laid off and the next day I was in the office by myself with no instructions, no tasks and nobody to report to! I was a young guy without a ton of experience so it was bizarre and I didn't know what to do.
I did busywork for about 2 months until I joined one of my former co-workers at a new place. Two weeks later the former company shut down, letting everybody know by posting a sign on the front door that the business was closed.
If the answer is yes to all of these questions, than no wrong was done. It's just business, and they knew what they were in for. The company did the right thing.
I know what is going through his mind when he spoke of breaking down desks because I've had a similar experience.
If there's a bigger gut punch for an entrepreneur, I don't know what it could possibly be.
1. When you hire, what's the likelihood that you'll want to pay for the skillset 1-2 years from now (= the startup's runway), and does the budget support it?
(Corollary: experiments are planned. A 3 month experiment that results in mass firings is either flawed, not actually an experiment, or sociopathic.)
2. Communicate #1 during the hiring process.
3. As an employee, ask about the above.
I hope that everyone went in with eyes wide open with respect to the above questions. If that was the case, this shouldn't have been so bad. If it wasn't... I'm curious what the board meetings were like.
I don't find this behaviour particularly galvanizing in a leader. Your feelings and tears aren't worth much to me but your business acumen is. I'd prefer you spent more time analyzing the business strategy that apparently lacked careful scrutiny and cold logical evaluation so we could have avoided this situation altogether. Give me the Steve Jobs and Larry Ellisons of the world so we can stop the group crying/healing session and get back to work innovating and generating wealth.