Why is every layoff 10-15%?
blog.eladgil.com> Remote work
> Anticipate more mid-size and smaller companies will go back more fully into the office as times get tougher. This will not be one size fits all, but will be an increasing trend.
Up to this point in the article, whether you agree or disagree with the points, the author offers some arguments and reasoning supporting each. Here, they simply assert that small and mid-size companies will go into the office, with no supporting argument. Why? Won't many small and mid-size companies have come up under covid and not have an office lease in the liabilities column? Why would they pay (insert large city) rents to save money? How does it help?
He seems to be writing for CEOs. Reading further he seems to figure that CEOs will be able to reassert control of employees by forcing them back to the office since employees are not going to be able to easily jump ship for another job.
As CEO now is your opportunity to rethink remote work. You may decide you want to continue as is, or you may want to make changes. You have an opportunity to act.
Not that returning to the office will necessarily result in better results, but many CEOs will tend to believe that things will go better with everyone back in the office.
CEOs are also going to face significant budget scrutiny and will have to really justify signing a 10 year lease (which won't be cheap) instead of investing in things that are proven to drive growth.
Class A office space outside of super expensive cities runs about $35/sqft on average. Employees need about 175 square feet each. So every employee is $6125 more expensive -- but that's only assuming you're renting someplace turnkey, which you probably aren't, so even if you cheap out at an additional $100/sqft ($17,500 per employee) for a custom build-out (one-time cost, but still).
Where is all this money coming from? If your business is perfectly functional remote, with capital costs being what they are, why would you do this?
Your figures sound about right, based on my experience.
In London, the cost per employee I’ve used is £15k pa. That includes office space and maintenance, taxes, plus IT costs, entertainment, HR, etc.
The cost for fully remote employees is £9k pa. That is, the cost of the office is £6K per employee.
There are additional costs for remote employees, like remote support. But these balance against not having to buy office furniture, pay for cleaning, etc.
But in London you have to pay those employees more if they're paying to commute (and wasting hours of their day on the packed trains every day), buy food in the city, etc.
I really can't see it being worth it in massive, overpriced cities.
Absolutely, there are hidden costs, in both directions.
If you only hire within the pool of people who are willing and able to commute to your office, you'll both need to pay more and have less choice. Workers are more tired as they spend hours commuting every day.
On the other hand, it's harder to develop juniors if all your seniors are working from home. Written communication lacks context that helps difficult conversations move forward. Silos build up as people in different teams never see each other.
In the long-term, I believe the broader benefits to society and the planet mean fully remote working will become almost universal. In the meantime, a hybrid model of mostly remote with broadly-attended meetups is the best combination. But some companies will decide that everybody being in the office all the time is right for them, and they can perhaps leverage some benefits of doing so.
> with broadly-attended meetups
How often do you feel is enough?
It depends too much on the details to give a definitive answer.
Assuming the "typical" company made up mostly of people who've been there for more than a year, and where commuting is easy, maybe every 3 months is enough. New teams (even within such a company) should aim to meet weekly while they're in the forming stage. Small companies made up of very experienced ICs perhaps never need to meet at all.
I guess the best way of working it out is to ask people, and review what works.
> The cost for fully remote employees is £9k pa
I'm really surprised by such high figure. How was this clalculated?
I didn't personally calculate it, or see exactly how they came to it. But I know it included things that all employees need, whether remote or not, plus a few things specifically needed by remote employees. For example:
* Laptop
* Accounts like email, Slack
* Entertainment (e.g. Christmas party)
* HR (this covered specific HR services like payroll, not the whole thing)
* IT support
* Travel expenses
* Home working budget
* Training
They did say it includes taxes, maybe they are including a 3% pension contribution or even Employers' NI which can run to 12% of salary.
The taxes I mentioned are part of the cost of running an office - especially local government taxes ("rates" in UK parlance).
The £9K figure _doesn't_ include taxes on individuals, such as NI and pension contributions. That comes from a different budget, and is typically an extra 25% on top of salary.
25%?
Employer NI contributions are ~1/2 that. What other taxes do employers inccur?
I lumped a few costs onto that, which aren't taxes, but are tied to salary. Pension contributions, life insurance, health insurance, for example - these all come out of the same budget as national insurance contributions.
I’d really like to know what the numbers are for the company I work for. Even if they rent a building in a business park (because there is not enough room on campus for a group), they will completely revamp the building from top to bottom and make it completely bespoke. The last time I worked in one of these buildings, they brought in artists who spent a week stenciling words and artwork over a concrete wall. How much did that cost?
But, don't you feel engaged to come to a place with such inspirational artwork? Truly, a company that cares.
/s
On the other hand, would you feel inspired and happy about going to a workplace with nothing on the walls or better still, the last company's name on them?
If the place feels dingy or like the owners don't care to make it look nice, I doubt it has a positive effect on productivity and employee retention.
Yes? I am a fairly ascetic person (nothing on my walls at home), so that kind of stuff has never been particularly relevant to me. So long as the place is clean and has bright lights, I do not particularly care about the overall ambiance to the place. Far more relevant is my actual work configuration: privacy, noise, visual distractions, etc.
>On the other hand, would you feel inspired and happy about going to a workplace with nothing on the walls or better still, the last company's name on them?
I wouldn't really care, I have never felt inspired by something on the walls. But I would legitimately laugh and feel better every day if the old companies name was still on the wall.
> but many CEOs will tend to believe that things will go better with everyone back in the office
Many of us SWEs believe the same!
What makes you think this?
I haven't observed any advantages to an office beyond overexposing the company to real estate (not really an advantage) - there is nothing I could do in person that I haven't been able to do faster in MS Teams (and better - now I have a written record and recording of everything). Another advantage of remote is that nobody ruins my train of thought by tapping me on the shoulder and asking stupid questions like "hey did you get that email." Best of all, no stupid pressure to go to lunch with anyone
I think the reality is some people do better remote, some better in office. There's no one size fits all solution. I hated my time working from home, but it sounds like you enjoy it. There's no perfect solution for companies here except to cater to individual preferences, or mandate one at the risk of angering some employees
There is one an individual might find works better for them. Another tractor is cost add employee market. I have a much bigger talent pool to choose from when hiring remote and I can recruite from much cheaper locations.
Of course teams work better in person. So many factors that impact that though.
Very little people are advocating that WFH doesn't work better for focus work of clear and specced tasks.
However, in my experience that is maybe 30-90% of software engineering, depending on environment, role and seniority. There are lots of relevant activities that are more challenging remotely, such as 1-on-1 mentoring, pairing for debugging or programming, or designing and collaborating a project or interface across-teams. Maybe you are "lucky" enough to never have to bother with that.
> 1-on-1 mentoring, pairing for debugging or programming
I find these quite easy or even better remote. I just fire up a screen share or even better a Visual Studio Live Share and both of us can see the same thing while we have our own developer environment.
Take this from someone who works effectively fully remote except for a couple days a month that I go into the office: Believe it or not, some people like their coworkers and want to eat lunch with them. Humans have been hanging out with each other since (checks math) the beginning.
I think brainstorming, discovery, and discussion type of tasks work much better in-person, maybe 5-10x better (driven in part by a small percentage that are thousands of times better).
Delivery works great remotely, probably better for me and many.
If you want to mimic the in–office fast paced decision making then yes in–person works better.
If you adopt a written RFC based slower decision making where people have time to fully articulate their thoughts and have time to respond to those comments then it not worst, just different.
If the house is burning and we need to come up with a solution now the first works way better. There is a reason why the military have war rooms. But for long term changes the second can be as good if not better.
I love WFH (and probably will not ever go back to the office), my team would all also say the same thing. Individually we will all tell you we are more productive. However, I know for a fact that my team as a whole is less productive now than pre-pandemic when we were 90%+ in office.
I also know other teams in our organization in the same boat. Sooner or later leadership is going to realize it and the gravy train will end.
Many or a few?
Most software engineers find themselves most effective in work from home. This breaks in favor at 3:4 or higher.
The software engineers that want to work in office are the odd-balls.
I am interested in the break down when one factors in whatever concept of '10x developers' -- which do the most productive of us prefer?
I haven’t met any SWE that want to go back to the office. Heck, even my managers manager has said she never wants to go back, and she is a complete extrovert. These developers online that claim they want to go back must be as rare as hen’s teeth.
About 30-40% of my engineering team prefer spending 2-3 days a week in the office, if we’re doing anecdata.
My team seems to have roughly 40% prefer full-remote, 40% prefer hybrid, 20% prefer full office.
Is there a big commute? Since I moved to a 15 000 pop town and work here my view on remote as the best thing ever has changed. Also we have private offices. So I don't know if it is the commute or offices that makes it so much better.
We have a remote of you want policy and the only two guys who use it also live in the nieghboring towns.
I recently switched teams from one where all but one other person (who was hired when the office was closed down and would have an inconveniently long commute) works from the office most days to one where I'm the only person who doesn't. So that's about 80% at least partly in office.
Another anecdote: I love WFH but i still want to spend about 20% of the time in the office, just to see and talk to people face2face.
There are dozens of us! DOZENS!!
For me it would be more of a toss-up if software engineers generally actually worked in real individual "offices" (like we used to, as a 49 year old I still remember the before-times).
But when compared to the modern nearly-universal open office plan... yeah there's no doubt I'd much rather work from home as often as possible, and based on my experience in both environments I'll be far more productive doing the job from home. Everyone's mileage may vary.
> But when compared to the modern nearly-universal open office plan...
Indeed. Give me a proper office with a door, like I had for the first 18 years of my career, and I'll happily go to the office every day.
But open office? Nope, nope, nope. Work from home or nothing.
Not just open office. My company doesn’t even have fixed seating. Basically you show up and wander around until you find an open desk. You have to take all your stuff with you if you need to go to a meeting or to lunch. It is ridiculous.
I just want to be able to choose which I want on a day-by-day basis. Some days I am much more productive in the office because I need to, say, communicate with a bunch of people or there's some sort of back and forth that needs to occur. Or I just need to get out of the house for a bit. Other days, I just want to stay home and spend the time focusing on something in particular without being bothered. But I need both to have both to do my job effectively. However, I work at a small company and am the primary software engineer which changes the dynamic a bit.
> Some days I am much more productive in the office because I need to, say, communicate with a bunch of people
But on that day all of those people might've chosen to work from home so you sit all alone in the office.
The hybrid solution only really works well if the office days are the same for everyone.
Forced-hybrid is just using a sledgehammer on the calendar rather than providing the flexibility that is actually liked by optional-attendance-office.
If the staff actually find this face-to-face time valuable, they'll organize and go into the office themselves, personally I've had zero requests from anyone to do that outside of explicit team-building activities.
In the before times, "Is there a Zoom for this?" was a live question. Zoom fatigue, such as it was, did not dominate working life. Savvy collaborators anticipated when a conversation would demand more than Zoom, and they made judicious use of the public transit between our offices to keep things smooth.
My enthusiasm for RTO is not about changing the venue from which we take our Zoom calls, but about changing our relationship with Zoom to something like its pre-pandemic state. To have some conversations naturally again. But there's no getting around that the WFHers would have to either show up or be excluded from them.
I personally find Zoom excruciating, and I blame the transition to remote meetings for all communication for turning a once optimistic and joyful career experience into a miserable slog.
We have a weekly slack poll every Friday for office days the next week. Works pretty well.
We used to have so that every Thursday was "come to the office if you can" -day, but switched to the poll system.
I'm currently working for a fully remote company with colleagues in multiple timezones. I still would be happy to go to an office to work besides my colleagues but only if it would be 20 minutes from my house on foot or by bike and had team sized room with 4–8 desk in it (no open office BS). I enjoy being surrounded with likeminded people, and during lunches talking about project they are working on outside work or activities they did just to broaden my views. But this is a very little upside compared to a typical office work.
The one thing I can see (as a SWE) is if you want to be able to fully box-off your work-life balance.
For my first few years of WFH, my office was my bedroom, so I just threw a KVM between my home PC and the work laptop and shared monitors and input devices. I eventually set up a standalone office.
Nit: Many can still be a minority.
It can also be understood as the majority, per wiktionary
> the generality; the common herd
GP was countering the possibility that GGP meant the above.
You're conflating productivity with the wish to WFH. I like working from home because it's easier to slack off and pretend to work. I know a lot of people are the same, whether they admit it or not.
I also claim that I'm more productive but it's obviously a lie in order to continue WFH.
Uhhhhh want to back that up?
Edit: Clearly not so your assertion is bull.
Everyone in the office? Really? All the time?
No, only when you're not stuck in traffic
Um many? Not me. Not any of the engineers I have talked to, which makes those who want to return the minority.
I think on remote it’s worth reframing the argument a little. If you’re totally pro-remote, I’d like to hear your thoughts on this formulation. Consider an early stage startup of six employees.
Working full remote - everyone at home, communicating via slack and zoom, working hours roughly the same.
Vs 9-6 ish hours, some flexibility, where they all come into an office. That office is a small, modern, comfortable office in a workspace. The office has a closed door, and only the team are allowed in the office. The team chat amongst themselves as needed during the day. They take breaks alone or in small groups outside of the office in the kitchen space or on the sofas in the workspace. They chat with folks from other companies. But no one from outside the team ever enters the inner office. It’s their space.
Do you think remote will be more productive for the team as a whole? Do you think the startup will do better with the small office or the remote scenario?
You can add an hour extra at the computer for remote (saved from commuting), but you’ll need to surrender quite a bit of that to interruptions when remote - realistically, delivery men (in the office scenario, deliveries go to a reception), families or pets, a bit of domestic chores, making lunch alone where no work discussions take place.
No, your vaporware office scenario still isn't going to get me to come into the office. :-)
And I find it very hard to believe. When I started working in the 1980s, everybody got a cubicle, we didn't even like cubicles!, but you had walls and it was quieter and people treated it like your personal space.
In my last job, I could've stood up and put my hand on seven different people's shoulders without moving my feet.
So your quiet shielded office doesn't sound like anything an actual company does.
> you’ll need to surrender quite a bit of that to interruptions when remote -
No, you get a lot fewer interruptions when working remotely than in an office. Deliveries do not take an hour a day, particularly when there are two adults who can split the task.
Pet interruptions take basically zero time per day because they aren't actually an interruption: I don't have to stop thinking about my problem for one second, but if I have to answer a single question about some other technical thing, I blow away my whole thought process and have to build it up again.
Also consider my situation which is even better:
- no deliveries (i only order to a dropoff or buy in person)
- no pets
- able to exercise and clear my mind during small breaks
- able to have a homecooked meal or go to my favourite places for lunch
- __not__ talking about work on breaks is actually a huge plus for me
> Consider an early stage startup of six employees
A small company is then going to have to lose the flexibility of hiring from anywhere in the country and have to compete for local talent. On top of that, one competitive advantage could be over larger better paying companies (especially now that hopefully most people have wises up enough to know that “equity” in a private company is statistically meaningless)
> The office has a closed door, and only the team are allowed in the office. The team chat amongst themselves as needed during the day.
That doesn’t alleviate the chief complaint about in office work - loud open offices - if I still have to listen to other people talk while I’m doing deep work.
It was not clear to me from your description, but it sounds like all of the developers are crammed into a shared space? For me, that is a huge differentiator of WFH - so many companies have trash working environments. Open office or similar which look pleasant, but are horrible for concentration.
I want a private space where I can close the door and have minimal visual and auditory disruptions. It does not have to be large, enough space for my monitors + chair. If I need to talk to someone else, we can do it in a different location.
yeah, no, dude. Fuck the mandatory office the same way fuck the meetings that could have been an email.
SWEs that want to force everyone back to office have no life or a personality outside of their job.
For real. Make some friends outside of work. Or enjoy time with your family. Or take time to make a family.
We are still talking about working during work, right? Or are you playing with your kids and having beers with your friends while you work?
It is a strawman argument to claim that people who want to go to the office have no social life. It is in fact easier to claim that "only antisocial people want to hide at home like a hermit with their webcam shut off."
When work and social life are the same, you never need to leave work.
I've seen too many buy into that just to lose their entire social lives over a job change, and also have horrible life satisfaction over the long term.
So yes and no. Depends on how you define work.
Yes if you have no life outside of work then it can't be good. However I still don't know if that's a common enough problem to solve for by making everyone work from home.
I think the more common issue would be lack of collaboration and ties to the company and colleagues when working fully remote.
No, but I have lunch and coffee break with my girlfriend.
Hope your wife doesn't mind lmao gottem
We're just gonna gloss over, "quick your employees don't have leverage, make changes they won't like" like that isn't indicative of a capitalist hellscape? If shit like this doesn't radicalize you into democracy in the workplace then we're fucked.
Especially since right now that lack of leverage was literally manufactured on purpose by the fed.
Different employers offer different compensation packages. That package includes salary, but it also includes things like the extent of 'democracy in the workplace'.
To a certain extent, as an employee I'm happy to trade off some 'democracy' for more money in that package.
As an employer, I would be happy to give people more 'democracy' if that's cheaper to provide than more money.
You’re just stating the exact problem just one level up. The fact that employers can choose whether or not to offer democracy is the fucked up thing.
Do you not hear yourself? For the average American, your employer has more control over your individual liberty than your government and we look at like that’s somehow a good thing. Like sure, if you land a cushy office job then you can forget the abuses the rest of the job market has to suffer. The railroad strike that happened this year was fought over fucking sick days and the government almost stepped in to force the workers to accept whatever their owners gave them.
I _don't_ want democracy in my workplace. I want to be able to choose a workplace that doesn't offer democracy. Why would you want to remove that choice from me?
I don't want my working life to be governed by what a bunch of other people vote for. I get plenty of that from the real government.
I'd rather have strong and competent management that can make credible commitments. And the mechanism to get there is not ballot boxes, but my ability to walk away from any workplace I don't like. The ability to vote with my feet.
Just like I don't want to eat at a burger place where the other customers get to vote. I just want to be able to eat at Burger King, if I don't like what McDonald's has to offer.
Worker cooperatives are already legal in most countries. Including worker cooperatives that are run on whatever theory of democracy you prefer.
> that lack of leverage was literally manufactured on purpose by the fed
As was the leverage. They artificially drove the economy in the other direction in an unsustainable manner for a number of years before that.
What starts with U and gives them nightmares? That's right.
Seemingly lot of other points are similarly made without the supporting evidence. Eg: wage growth driving inflation - what wage growth? Checking this, the pandemic pushed the US out of a period of low wage growth, it's not extreme and is similar to the 60s thru 80s: https://tradingeconomics.com/united-states/wage-growth
Re: printing money and money drops, that seems to entirely ignore that was happening while unemployment was in the double digits.
Re: drivers on inflation, Karie Porter has some really interesting presentations that input costs are not increasing proportionally to profit increases (regardless what you think of her, the data presented stands on its own). That evidence suggests simple price gauging is a significant factor (citation: https://www.marketplace.org/shows/make-me-smart/corporate-pr...)
Those are just some examples of yet more statements given as assertions, which seem somewhat foundational to the remaining conclusions. These flaws really gives me pause for any of the analysis presented.
Companies will require RTO because it makes employees more productive. I've worked at one small and one large company during the pandemic involuntary WFH. In both cases productivity was noticeably worse, most especially for new employees onboarding remotely. I think WFH a couple days a week makes me more productive due to focus, but I'm unproductive and miserable now when none of my teammates ever come in. We're laughably disconnected and not functioning like a team. Zoom and Slack are just no substitute.
>> during the pandemic involuntary WFH
There you go. A lot of companies that were forced to WFH -don't actually want it- and so haven't invested in changing their culture to actually be effective at it. Some companies that -have- embraced it...also haven't changed their culture to actually be effective at it. But some want it, and have, and, oddly, I think they're in the majority, since studies keep showing an increase in productivity and employee happiness https://www.apollotechnical.com/working-from-home-productivi... .
You can't measure productivity during the pandemic and assume it speaks for work from home in general. There were a lot of things about the pandemic that caused a reduction in productivity that had nothing to do with whether or not workers were in an office.
Also consider that productivity might be best with employees choosing their office schedule. Some might be more productive in the office five days a week, others zero... and the majority will probably be somewhere in between, spending some days at home and some days in the office.
Bottom line, though: the pandemic is not a good time to measure productivity for any reason, and consider it representative of the norm.
I work at a big company that is remote only and productivity is high. Might it be that they actually thought about how to implement it and kept improving the tools and processes needed?
How did you measure productivity?
It's a personal view obviously. But teams are shipping way more than some startups I worked at, including things customers really want. We have quarterly meetups and a myriad of events to keep the human connection too. No full-time-open-office-all-in-the-same-room-serendipity I've seen in other companies was actually valuable. It's just that it was the only way people knew to work, until companies were ready to go remote. 10 years ago we didn't have the tools.
my remote only company is way more productive than my previous in-person company, so there’s the counter anecdote to your anecdote
I'll take any IC or low-level employee's productivity claim with a grain of salt.
For a CEO, productivity is at a first order is operating margins. 99% of HNers have no clue how to calculate that (nor have the necessary data).
I mean being Real, most CEOs seem to not know how to do that either… All the “top companies” are cash fires with VC backing.
> 99% of HNers have no clue how to calculate that
This is just plain wrong. In big organizations it's the front line worker and not the CEO that can confidently gauge productivity changes simply because C level bean counters always try to quantify productivity with flawed metrics likes lines of code when most people know it's nonsensical.
I think, being generous to the GP doesn’t matter how “productive” a single person or team works, if the whole thing isn’t working well (usually measured in margin) then it doesn’t matter if the engineers “feel” more productive.
And what’re your qualifications and citations?
How would a C-level person measure my productivity? Go on GitHub and filter for my PRs and count .. merges/week? commits/week? lines/week? lol
I worked in companies where remote worked but the whole structure of collaboration was built to support that. Can't imagine company that worked on site transition easily
Currently working for company where we our team gets together once a week and that part works well, but management is mostly stuck in old ways so sometimes it's weird.
> In both cases productivity was noticeably worse, most especially for new employees onboarding remotely
Then that means your company doesn’t have a proper onboarding procedure. I was hired at $BigTech in June 2020 and didn’t meet any of my coworkers in person until 9/2021. I had a complete organized onboarding experience including all of the prerequisite indoctrination.
> Why would they pay (insert large city) rents to save money? How does it help?
This is still a bit of an open question. Productivity can be a weird metric because it doesn't capture if you're making the right thing, just that you're making something. WFH productivity was also measured at a pretty weird time, so there wasn't a good control. What you'll see is a lot CEOs pick policies by which model they prefer, and in a poor labor market, they'll have the leverage to do it.
> Won't many small and mid-size companies have come up under covid and not have an office lease in the liabilities column?
Were they started during Covid? Office leases are typically at least 5 years, so most existing companies will still have them, hence return.
Edit: removed assertion assertion
There’s a lot of 50-100 person offices used by 5-10 people a day right now because the friendly nudges and incentives to bring people back to the office are falling flat.
If there's only 5-10 people a day, they should be getting nice offices rather than the typical open plan. That might actually entice others to come in.
In lots of tv shows the high-social-value characters have very nice offices (ie, it has a door and a couch). I'd go in-person for one of those.
Hahaha, no way that is happening. Open plan stays, and people are actually coming to the office and attending most meetings on Zoom sitting at their desk.
I am no fan of that. If I come to the office I want to see real people.
The incentives are mostly bad ones.
Companies that understand remote work have done a really good job of netting talent that is not in the Bay or New York, and I'm very happy to be working for one.
This is a minor nitpick, but it was a question, not an assertion.
You’re right, my apologies. I shouldn’t write comments after a scotch on a long day :)
No biggy my dude, it was clear from the jump that you didn't intend anything combative. Enjoy your scotch
Cheers!
Indeed and many are in long term leases that can be 10 or 20 years and these companies leased (or even built) for growth. They have also invested in building rooms, buying equipment, power and networking. To these guys it is feeling like they wasted a lot of money and of course they are going to think about this investment and want folks to come back to the office.
As the job market is changing, I am worried about my work-from-home status despite having started over a year before the pandemic. I just think there is going to be a mass get your butt in the office email that will include everyone.
I think employers might have a hard time convincing their entire remote workforce to sell their house / break their lease and move to entirely new city.
Edit: he has another article with si6nce explanation about CEOs need to directly interact with employees when the company is of certain size
https://blog.eladgil.com/p/back-to-office
But reading between the lines, he seems to consider remote workers being the lowest performers and a danger to the company culture and mission.
If fell he is also deliberately missing the point of remote work even when it hits him in the face, for example
> a few companies anecdotally see more employees going back in NYC offices than SF. This probably has more to do with local work culture
For our ~200 person company, remote has been more expensive than an office in the financial district, sf, fwiw. Cost of travel for team get togethers/offsites for a distributed team is expensive.
That doesn't sound like being remote
How much more expensive would salaries have to be to convince those same 200 people to work in SFO?
Ironically enough, I was just at a team meeting in the SFO financial district. They would have to pay me at least $100K more for me to even consider moving to San Francisco - and that’s only because my kids are grown and we could give up our nice big house in the burbs in a much lower cost area.
Is it more expensive than keeping an office for entire year, though?
Yes
...how fancy are your offsites exactly? :D
This doesn't seem like you're remote at all
The cost of office space for tech employees rarely exceeds 5% of pay (for high-paid tech workers).
It's not as expensive as you might first expect.
To the people who actually go into the office, it's probably well worth it.
If employers offered the same working environment as a home office, it would be much more expensive.
Open plan is only cheap on the books. It costs a lot in decimating the focus of people working there.
Ymmv, but for me work from office is far more productive than from home. It also allows a very effective context switch so you don't feel like working when you are at home.
My commute to and from the office took 3 hours+ per day.
Now I work from home 2 (two) jobs, one full time that used to be the office and one contract. I make 2x what the single office job pays me and only so I'm close to a decent pay while still below US average for developers (I live in EU).
No ducking way I'm going back to half pay plus wasting half a day in traffic for free.
Well 3hours commute per day is, of course, not too good. I get to office on foot in 90 seconds, so it certainly affects my POV (on the other hand, it used to be longer, but I just moved close to the office).
On you working 2 jobs: I knew people who were working remotely 2 full-time jobs at the same time. I think their employers wouldn't be thrilled if they somehow found out about it
I have the suspicion that your situation is not really representative of software developers in general. It's great if it works for you but don't expect others to help you if they're not getting their share of that 2x.
It’s easy for me to context switch. I have a separate office. I only go in there to work.
Yeah, but not everyone has the luxury to have a fully separate office room/space for themselves
If you can work remotely from anywhere you can afford a house in the burbs with space for a separate office - somewhere in the US.
What happens to people who were hired as fully remote during pandemic?
At least at Twitter, sounds like they are in trouble.
Yeah, they’re all effectively fired unless they have the flexibility to pack a back and fly to SF or another Twitter office on Monday, at least from what it sounded like on the leaked call (there was mention of special circumstances but that sounds like only for people in emergency situations). Kinda fucked up.
It's ridiculous because getting rid of the office entirely is the biggest cost savings going.
The one fully remote company I knew of personally was a small consultancy. Everyone just contracts out to larger ones, so no nead for their own office, but I guess they were onsite with their clients
> Won't many small and mid-size companies have come up under covid and not have an office lease in the liabilities column?
There are way more small and medium sized companies which are older than 3 years.
Remote is cheaper and there is a squeeze happening.
imo, this isn't a decision that can be made in isolation; it depends entirely on what your competitors are doing. If your competitors are working from an office and out-producing you, you have no choice but to follow suit.
Like in sales, you're much more likely to close the deal if you meet in-person than over a Zoom call. If your competitors are flying out salespeople to meet clients, but you're still stuck on Zoom, you won't catch a bid.
When I was running a startup there were lots of times when I felt kind of lost and it's very tempting to listen to things like this because they seem plausible. It's a huge mistake.
This kind of generic armchair general "advice"[1] is everywhere when you run a company and is basically completely useless because every company is a complex and unique special case and if you're in charge you don't have to make the decision that would on average be the right decision for companies of your type, you have to make the best decision you can for your specific situation. This goes double for people decisions because they have a huge impact on those affected so it behooves you to take the time to really do your utmost to do it right.
[1] By which I mean the kind of phoned-in powerpoint analysis that would be produced by someone with a career at a 2nd tier wannabe McKinsey consultancy
I wouldn't hold any special reverence for McKinsey.
In general with any of the management consultants, you're going to get people with very little actual experience telling you how to run your company.
Whilst some of the stuff, usually more accountancy / factual based, doesn't require experience, and thus may be delivered to a high standard, you're also going to got a bunch of hot takes that don't make sense in reality.
Outsourcing, the Spotify model, and not really agile Agile are all sold by the top tier consultants, even though you basically can't name successful examples.
Completely agree. We had McKinsey crawling all over one company I worked for and in the "workstream" I was the main point of contact for they had the first meeting where they "were in listening mode" and at the end of the meeting I said "look, if your plan for this workstream is to take everything I've just told you and put it on powerpoint slides and tell it back to us while charging for your time that's not going to work. So if we have a session tomorrow you actually have to bring something". They called our CEO and shut our workstream because they said they didn't think they could add enough value.
All the other workstreams continued for a while with them burning our investors' money and also all ended with a big nothingburger.
Basically the team we worked with had one guy who was genuinely brilliant - razor sharp, really knew his stuff etc just great - and like 8 people there whose function was to pad the billable hours, make slides, carry printouts and drink the free coffee.
I'm sure some management consultants provide utility to a lot of larger companies which might be inefficient. I know some of them have identified procedures or process that are irrational or time consuming and can offer ways to improve efficiency. But a lot of it doesn't lead to any change in the end.
Most company leaders are probably clueless on how to react to a downturn but feel they gotta do something. 5-15% of a layoff is the sweet spot and generally accepted practice when recession looms. Look at what Elon did by cutting 50% which is fireplace style survival mode and will crater team moral permanently. I think this article just builds reasoning around the 5-15% number to sound impressive.
Usually 10~15% are considered as "for redundancy". If you go further than that, you will likely lose continuity on your core business. The risk is just too much to take. Unless there's a good evidence that the business can sustain with 50% or whatever numbers, it'd better be safe.
It might true that some companies are extremely bloated and their competitors may be demonstrating a similar level of productivity with 30%~50% of people but different companies have different history and contexts; path dependency is the thing. For that level of productivity loss, the root problem is more likely deeply ingrained in the structure (especially management and decision making) so cutting more and more people usually won't help.
< looks over at twitters 50% layoffs >
More than 15% often means a change in the business model.
Look at Facebook's employee curve in the article - it looks pretty much exponential. If they lay off 50% of their employees, they'll be at 2018 levels when they had essentially the same business model.
Their revenue had also exponentially grown (doubled between 2018 and 2021) even though IDFA kicked in, which pours huge complexity on Facebook's business. Unlike people's typical tech stereotype, revenue growth is not something automatically granted with "the right technology"; you need product management, sales and and engineering infrastructure just to keep it.
they can't afford to make same mistakes they did in 2018 though. when you're as big as facebook, mistakes you make shape the regulations in the world.
I think if you only need to get rid of say 3%, then you can probably just do a hiring freeze and wait for natural turn over. If you need to get rid of 40%, doing it all at once is probably too much of a shock to the company (too difficult to figure out who to transfer responsibility to). So 10-15% is just right: enough to be worth it, not too much to cause excessive turmoil.
Hiring freeze is actually a mistake as you trend towards mediocrity. Natural turnover tends to lose you more good people than bad (head hunting, opportunity).
Sure, but i imagine layoffs are even worse for that. The company can pick who to layoff, but once they do i imagine the really talented people start to jump ship.
The trick is to do it when everyone else is in a freeze or doing layoffs :)
Yeah, this is why all the experienced people bail even if they don't get laid off
Sometimes its team specific. E.g. Recruiting team if you plan on a hiring freeze for 12 months etc.
Fortunately I've never had to invoke blanket headcount cuts.
But, as an employer, I've been given the advice "cut once, cut deep" many times. The theory (which I understand) is that employees get skittish once you get to a second or third cut.
The author suggests some companies could stand a 50% cut if that is what is needed.
This month though we've seen twitter cull 50% and twitter users, and customers (advertisers) became equally skittish.
Do twitter employees feel safe? Does the "cut once, cut deep" have the desired effect here? Are customers reassured [1]?
Maybe twitter is a unique case because of other factors - Elon? The fact that people can make their opinions heard on, well, twitter? The fact that other media are reliant on twitter traffic and buzz?
My guess is that employ confidence after a round of layoffs is dependant on their faith in management to begin with, and the clarity of communication between management and staff. Perhaps a transparent financial reality helps employees understand that what they do affects the bottom line, and that line pays their salaries.
yeah I think Twitter isn't useful here. Having a dramatic change of management + a layoff + serious product upheaval is definitely different than just a layoff.
Now Elon is ending a policy literally called "Work From Home Forever" and with no flexibility -- back to the office 5 days a week.
Why would an employee feel safe when literally everything about Twitter changed overnight?
Yeah, Twitter is basically a running case study in what not to do when it comes to acquiring a company successfully, and can't be held up as anything other than "what happens when you do everything wrong". Certainly, it's not a useful example for others, even as a warning, because you can't easily tell what bad actions led to what bad consequences; there are so many of both.
While I suspect you're right, isn't it a little early to conclude the acquisition wasn't successful? Who even knows what successful means in this case?
I didn't conclude it wasn't a 'successful' acquisition. Just a case study of what not to do. Even if it somehow ends up in a place it gets spun as being a success, only Elon fanboys are saying "4d chess! Brilliant!"; anyone with an ounce of sense recognizes how dumb everything about this has been.
> how dumb everything about this has been.
Including pre-musk twitter as a directionless and weird company imo.
You're being downvoted because it's too soon to judge so harshly. You may be just as biased in the opposite direction as the fanboys. There's been a lot of dumbness and silliness involved but it's pretty hard to assume that a random HN commenter is a better businessman than Musk.
So that comment is currently sitting at 1, so upvotes balancing downvotes. The original +12.
But I really don't care either way; to your point - even Musk didn't want to acquire Twitter once he sobered up to the fact he was in too deeply to pull out. It's just his brilliant business acumen meant he went into it waiving due diligence. Which, yes, this random HN commenter knows better than to do, for any company, let alone a social media company.
Success might be difficult to define. If this produces the results that are desired by Elon and the investors then it's probably a success from their perspective. I worry if that's the case, it'll be like all the buy out, chop up, and liquidate value takeovers they made movies about.
> I worry if that's the case, it'll be like all the buy out, chop up, and liquidate value takeovers they made movies about.
In general, if a company is worth more when chopped up than alive, it deserves to be chopped up.
Elon Musk took on significant debt (i.e. interest payments) when he acquired Twitter, and Twitter was already losing money when he did.
It will take significantly more than just liquidating Twitter's assets for him to succeed, he essentially needs to turn Twitter into successful company.
Twitter was doing pretty okay though, looking at revenue and profit trajectories. A fairly sharp layoff of around 20-25% might've been needed to trim back down from the pandemic hiring spree and the lack of the anticipated growth, but that should've been sufficient to restore profitability looking at their last reported numbers.
With Twitter Blue steadily and exclusively rolling out new features like edit functionality that might've begun contributing more to the bottom line in time too. It was still too new and too geographically limited to be certain.
None of this was necessary.
The debts are a choice though, he could just sell other assets if he didn't want that.
So? We're in the timeline where he made that choice, so now he owes those debts and the interest on them. Yes, in theory he could have bought Twitter without going into debt, but he didn't.
...presuming the goal is to retain any of the current employees, rather than just building a new company around the existing IP+assets.
And when the firing is coordinated by an outside party with little-to-no relevant expertise. It's hilarious that they immediately tried to hire back people they fired.
The timeline also feels relevant here. The new CEO has only had a short time to really get to know the company. Who's to say that he won't cut more as he learns more and settles into his role? Combine that with the economic pressure and it looks pretty likely that either more people will be laid off or whole teams will be "managed out".
Knowing its financials, I would feel more "safe" after a 50% cut than a 25% cut.
But why would we want employees to feel safe? They should feel like they need to produce value, or they'll get cut.
You're being down-voted (not by me) because your point is both cynical, and common as a caricature of management.
Employees need to feel safe because that improves their ability to focus on the job at hand.
Employees that do not feel safe spend time updating their resume, playing office-politics games to make others look worse, spend time with other employees (detracting them) to either spread rumours or get gossip.
In an unsafe environment, where the unsafty is internal, people don't "work harder" they work much less.
If the risk is external, then yes, people can pull together for the common good. When covid started our staff accepted huge pay cuts so that all jobs could bd preserved. They did a fantastic job, and all ultimately got back-pay, and all jobs were preserved. But that was "us against the world" - cuts included management, and salaries returned from the bottom to the top, not the other way around.
That sounds like a great employer.
I only have anecdotal data but from recent discussions with friends who got laid off, they all lost trust in their company's leadership and losing arbitrary team mates has made them unhappy and reduced morale. I don't know if it's something special this time but if great teammates you worked with since before the pandemic are cut off while ones joining after and never having achieved or released anything remained (paraphrasing) does that. These layoffs seem haphazard.
Higher management doesn't know who is productive and who isn't. The good lower-level managers have that visibility, and let's say the poor (or mediocre) managers don't.
But whoever has that visibility, they would have already taken steps to get rid of underperformers and replace them with good performers. Therefore good managers have disproportionately good people.
So when the senior management says "everyone lay 10% off", the good managers lay off good and bad people, and the poor managers lay off random people. The result is lots of good people get laid off, even if everyone is trying to avoid that.
>But whoever has that visibility, they would have already taken steps to get rid of underperformers and replace them with good performers.
Putting a lot of faith in management to cull weak performers. Depending on the organization, it can take a lot of effort and political capital to get rid of someone ("What do you mean you want to fire the guy you just hired?"). Significantly easier to just coast and let them hang around without any boat rocking.
I doubt they feel safe, and twitter is a unique case.
In general the cut once advice is not to make people less skittish immediately, it's to avoid the long term mistrust that comes from cutting repeatedly. When you do that, the message is you are either incompetent or you hid information from them the first time. A bigger one time cut is more shocking, but things settle down after and you have an opportunity to start building trust back up and put the company on an upward trajectory people will want to stay on.
> Maybe twitter is a unique case because of other factors - Elon?
really, you think that a rapid change of leadership preceded by an extended legal battle is MAYBE a unique situation? Elon is very clearly one of the most erratic ceos of a 10b+ public company right now
customers and employees are uncertain about the future because the ceo and controlling shareholder seems to change his mind every day about twitter's product, company culture, and general philosophy every single day. if he laid off nobody it would still be mayhem.
Is going back to the office such a huge thing in other countries? Here in Germany almost nothings changed from the main COVID time in terms of home office.
It seems like our standard of working has transformed and will not revert back.
Yes and no.
When COVID more or less "left" corporate culture, a lot of US businesses wanted to go fully back to work or to make remote work a benefit, i.e., you'd take cuts elsewhere for the privilege to work remotely/from home.
While some of it is likely power-tripping on the part of managers, I suspect some of it is more complex involving expensive building leases and trying to justify costs, fear of "what happens if the culture shifts again and we need to find office space", which I do think is a reasonable concern, but not to the point that it should shut down remote work entirely.
Anecdotally, I do know quite a few higher management ones who were very upset by remote work; they liked the idea of having "their" employees in a single spot so they could check it at any time for various projects; some relented when after an honest talk they conceded they never really checked in person and did everything by chat/call/email anyways, but there were a few sticklers that just honestly believed "butts in chairs or we lose all productivity", even though 2 years of data from COVID times shattered this belief entirely.
Part of why I think the position was so predominant in the US was that the job market power was so vastly different there; in European countries, it was far more competitive for a company seeking candidates and this gave a lot more negotiating power for employees I think since there was certainly a job lined up for them, whereas in the US it was a bit more uncertain that you could get a position since there were so many more candidates than positions in many cases, so businesses had the ability to be far more exclusive and demanding.
In office work is definitely a bit of a cargo cult, despite the evidence that companies did just fine.
The quality of the data senior leaders typically use to make business decisions like this are usually either very poor and would never pass any kind of statistical or scientific bar, or non-existent. It's usually just a gut feeling and they roll with it. Managers just usually have no idea how to manage a remote team and go about replicating the physical office in digital form.
Same here in Denmark. Maybe it is easier due to a flat company structure, and micro-managment being less common. It is not expected or even tolerated by workers, who will just jump ship if it happens.
Micromanaging mostly. My company wants to return to the office by Dec, but I don't really see that happening.
I always assumed it was a ritual sacrifice to telegraph a message to investors that a company is reducing operating costs to pollish the annual report.
This is also why employees should be nervous about firms that sync a hiring cycle with Q2/May.
In the US, a CEO must make the profitable decision, or face direct legal peril. It often has nothing to do with the character of those on the board. ;)
That is at least in part an urban legend:
https://www.nytimes.com/roomfordebate/2015/04/16/what-are-co...
The CEO might still get complaints, but legally there is no obligation.
Really? I thought the share dilution scams were only viable in places like the TSX, and that was why many avoided the foreign exchange in favor of US firms.
I just survived a round of layoffs at someplace mentioned.
I think this is overthinking it or looking for a conspiracy theory. Layoffs aren't deeply calculated or hand-wrung over in advance. They're somewhat arbitrary and ambiguous but purposeful: to stop the hemorrhaging of cash. There's no clean or perfect way to do a layoff precisely in limited time, so they happen in discrete units of reduction in particular areas. They're rarely pleasant and never perfect.
I've had to do layoffs in my team (as head of Engineering, I had all visibility).
It was pretty straightforward and un-conspiranoic: The CEO got us all execs together and showed us the P&L which showed that we had 10 month runway. It also showed that (as in most companies) the highest burn rate was from payroll. Then he mentioned that we had to expand our runway to 18 months. Which meant cutting in various places (including no free sodas). Finally we agreed to cut payroll in 10%-15% , which would have a strong impact on the runway.
And that was it... pretty straightforward.
Decimation is a concept going back to ancient times. The Romans would punish units by having every 10th soldier killed by his fellow legionnaires.
It’s a number big enough to reduce cost and create fear but not enough to cause panic.
It pays to be a 10x legionnaire.
10–15% is about the maximum amount of dead-weight employees (the kind who don't have the skills to perform the job-role they're hired for, who were hired due to favoritism, bribes, blackmail, or pure hiring-process "throw a dart" laziness) you can have on a corporate balance sheet before the aggregate lack of expected productivity per OpEx dollar starts to be suspicious. The further below this limit a company is operating at, the 'safer' hiring managers can feel in making arbitrary/capricious decisions without being called out on them.
And so — presuming at least some hiring managers in each bigcorp are unethical and lazy or able to be manipulated — 10–15% dead-weight becomes an equilibrium point: the number of dead-weight employees asymptotically approaches 10–15%, where firing one means being able to hire one more, and hiring one means being unable to hire one more.
(Which isn't to suggest that there's top-down awareness in all these companies of these employees being dead-weight; rather the opposite — they survive because the structure of these companies has no continuous visibility into employee productivity. But when they consider layoffs, that's the time to do a point-in-time productivity audit... and that's when they find that this dead-weight has been accruing, and set out to burn it off. And, if they're smart, to also "burn off" the people who were willing to commit malfeasance by hiring/endorsing them.)
It seems to me unlikely that they both couldn’t tell who was performing in normal times and then find them with surgical precision while panicking.
How so? You just don't bother to ask these questions, until you need to know the answers. The information is there at the leaf nodes of the org-chart; it's just not normally being propagated up to anyone who can do anything actionable with it. All it takes is asking the hard question, recursively.
I guess I just don’t believe the leaf nodes in your example actually know who isn’t performing, but had decided to keep them on the team for reasons. And that if they are asked, they will suddenly name names with pinpoint accuracy. In my experience, in this situation, the managers are clueless and figuring out what is actually going on is a hard problem.
Think of it like this: you have direct reports who are awful at their jobs. You have no idea who hired these people; you just inherited them from their sociopath ex-manager (now promoted, per the Peter Principle) who hired them for bad reasons. However, the job is a very technically-complex job, where everyone is going to be awful at any new task for the first ~6 months of doing it. Just coming into this situation, you don't really know whether these people are not-good, or just not-good yet. You have a suspicion, but you don't want to air it, because you might be wrong — they might be trying and it might just be too early to see results yet — and there's no internal corporate zeitgeist of purging deadwood to give you any confidence in avoiding backlash if you are wrong.
Later, that zeitgeist comes, and your boss's boss's boss asks your boss's boss, who asks you, to have the hard conversation with those direct reports you've been suspecting — and with their peers — to find out if they're actually making any progress in learning what's required to become productive, or whether they've just been bullshitting you. So you have that conversation, find out the ugly truth, and report it.
Interesting, but I think they're over-thinking it. A lot.
At any given moment, most companies can probably justify cutting 10-15% of dead weight. But when you cross that line, that's a much different smell. The most talented get a whiff, update their CVs and head for the door.
The goal is to cut the bottom and leave the top. Take off too much bottom and your top will leave "voluntarily".
I found the context interesting, but this line addresses the question nicely without much overthinking.
> 10-15% seems to be the number that reflects “big enough that I can tell myself and my investors or board I am doing it, but not so big that it causes truly uncomfortable conversations for the team”
Exactly. Take a look around and imagine your company with 10-15% less.
Most people don't find that such a terrible idea.
That really depends on the distribution of the layoffs.
The 10-15% percent aren't necessarily all bad performers but might just be people working on teams that are to be disbanded entirely.
Yeah, if it is mandated "all teams cut 10%" it can be disaster.
Team that managed to hire good people and fire bad performers already ? You're basically taking productivity out.
Ops team that every other software team is dependent on and already overloaded ? Now every other team will feel delay in dealing with their stuff.
Yeah, I was going to say, the average BigCorp has probably 30-40% dead weight. So cutting close to half of that is probably not a terribly heavy lift. Most managers already have a stack rank, in their head at least.
Yeah, exactly, and you only actually use 10% of your brain. Probably don’t need two hemispheres to be honest.
Since we know that to be false, I assume you're just being a smartass. If you disagree, there are more polite, constructive ways to say so.
Sorry if it seems flippant, but I provided just as much justification for my argument as you did.
No, you made a straight up false claim. He was merely estimating at an unknown.
You made up a statistic, what good does it do to spread misinformation?
He made an estimate of dead weight based on his experience. I think we can all agree it's >1% and <99%. Of course, "dead weight" is a ill-posed, incompletely defined notion, so definitional issues abound, too.
The next step is to discuss the usefulness and your own perspective, not to mock.
You are calling it false, yet you haven't provided any citations either.
That's not how burden of proof works. You can't just brain fart random numbers and then demand others disprove it.
Because generally their workload goes up concommitantly, because there is no backfill.
If 10-15% of employees are "low performers" for their roles, you'd expect 10-15% of CEOs to themselves be low-performers for the CEO role. And so, in 10-15% of these layoffs you'd expect to see the CEO get replaced.
I think Scott Adams figured this out in 2005: https://dilbert.com/strip/2005-06-11
This reminds me of a story I heard about Steve Wozniak's time at HP: They were going to lay off 10% of the staff, but instead they decided to reduce everyone's pay by 10% and give them an extra day off every two weeks.
Conventional management advice -- at least that I've gotten -- is that you cam increase people's salaries, but you can't cut people's salaries. Without a very unique culture, they take it personally and will likely quit. Better to fire underperformers.
Side note: if staff took better to getting their pay cut, they'd get more frequent (faster) raises. When a company is suddenly more profitable, compensation increases lag far behind, as they have to first feel very secure of the higher profit level. After all, if it falls back to normal, they can't cut salaries...
Note: my personal experience is limited to managing a few dozen people and there are surely plenty of exceptions to the advice above.
It depends on the messaging. The company will often try to spin it as a mission where everybody is taking a hit so your colleagues can keep their job in difficult times. This is doing your part for the greater good. Me, I'd reduce my work effort by the equivalent amount.
> but you can't cut people's salaries
What? You can. Many companies even do it every year with some arbitrary bonus system.
I said salary, not total comp. Employees often don’t consider bonuses as “true” salary as they aren’t guaranteed, much to the dismay of the employers who pay them with real money. Just my limited experience.
That does seem appropriate as opposed to making salary not guaranteed.
Yeah, let's ignore the extra day but why isn't anybody doing that today instead of the 10-15% layoffs?
I guess the fear seems to be that it will lead to uncontrolled attrition of good people. But I would assume hiring freezes in the industry would still prevent this. Also, you will retain the truly "loyal" employees that are willing to suffer a bit for future growth.
It also addresses the wasteful folks in a fair way. I've definitely observed shifts in company cultures of new hires not being attached to the overall mission, demanding more and more benefits (e.g. business class flights) without "giving back" in equal amounts by working hard.
Well, it would result in exactly that, best people leaving
> I guess the fear seems to be that it will lead to uncontrolled attrition of good people. But I would assume hiring freezes in the industry would still prevent this.
The best are near-immune to that. It's the average worker that will have problems finding next job, not the best one.
> Also, you will retain the truly "loyal" employees that are willing to suffer a bit for future growth.
That doesn't mean productivity
> It also addresses the wasteful folks in a fair way. I've definitely observed shifts in company cultures of new hires not being attached to the overall mission, demanding more and more benefits (e.g. business class flights) without "giving back" in equal amounts by working hard.
It's a job for money, not charity, and you're competing with other companies. New hire have no reason to be attached to the company either. It's fine to like where you work, but people don't live with their work.
They have family and hobbies, that's why they work, to fund that, not to "have a mission", in job where someone on top is earning way more than what they put in effort.
I know many many people who went the extra mile for their company (doing more work than expected).
Is it healthy? No. Is it needed? Not always/necessarily. But a company that's laying off members to save costs should likely try to retain those that do go the extra mile.
Also, I mean you can argue all you want that those people aren't productive but in my experience that's just not true. People who live and breathe the company tend to care a whole lot about quality and thinking through user experience. The typical "it's just a job, I can quit any time and find something better" folks just don't stick around long enough to suffer from their decision or care about the company's image / their coworkers.
I mean I've been there. A bunch of folks get hired because they were at Google or Meta before and they must know their stuff, and get elevated to somewhat high positions, but they never deliver on their promise and I cannot say they were particularly productive and they generally also do their "I only work as much as I need" or "Sorry I won't join this one time meeting that needs to happen at odd hours to accommodate time zone issues, it's 30 mins past my end of day" routine. Then after a year or so they leave for greener pastures, probably getting paid more.
Again, I think for a company where it's the norm that people protect their time it might not matter and I'm not saying it's an issue. But if you take a company full of heavily invested employees that see it as their family, and you add, simply because there's a bubble, equal the amount of people who just see it as another job and the company tanks in an economic downturn, retaining more of the latter portion (at all cost) does not seem wise.
The people who don't see the company that way / care are still likely to leave the sinking ship soon, but the damage to the laid off as well as remaining loyal employees has already been done.
And no, if companies were able to accurately identify low performers they could have dealt with them before. I've seen many good folks lose their jobs in the last few months and folks who never released a single thing or provide other tangible output (design docs) be retained.
I'd heard of something like that at a city government level around 2009 when cash was tight. A friend of mine had a 4 day week every other week. I think they called it a mandatory furlough in that case
The last company I worked for did something similar. It cut everyone’s salary (60 people) to avoid a layoff right after Covid hit. As soon as they did, I started looking for another job.
Your best employees can leave and you are left with the “Dead Sea Effect”
Why did you leave? Was it because you weren’t being paid enough or purely principle (or both)?
Oh it had nothing to do with principle. My manager, the CTO was the best manager I ever had. He was new to the company when I was hired in 2018 and they were bringing development in house from a contracting shop and he tapped me to lead cloud initiatives even though he knew I didn’t know anything about cloud.
I would have left anyway over the next year. By the time the paycut came, I had already basically purposely “put myself out of job”. I trained other coworkers. Put processes in place and I had nothing left to do but normal CRUD development.
They were pivoting to selling various microservices to large health care providers and he wanted to move away from VMs to Fargate (serverless Docker) and Lambda along with some other projects.
He was a great mentor and he was very straightforward and unapologetically blunt (after we got to know each other).
3 months after I left, they gave everyone additional equity to make up for the paycut and they restored everything a month later.
When they got bought out six months later for 10x, everyone made a decent amount of money from $50K - $200K (we aren’t talking a tech hub), the founders gave everyone bonuses and they reached out to someone who had been there for years and who had left and gave them an extra “thank you” bonus.
I would have stayed, but a recruiter from Amazon Retail reached out to me about an SDE position. I didn’t want to be an SWE at any large company, I didn’t want to relocate, and I wasn’t about to spend months “grinding LeetCode”.
We kept talking and she suggested I apply for a fully remote position at AWS ProServe as a consultant specializing in enterprise app dev + “devOps”.
It was too good of opportunity to pass up.
The rest of the story with the startup. Soon after it got acquired, the CTO left and most of the best employees went with him to a new startup in the same space.
If I were working anywhere else and he could afford me, I would definitely work with him again. I still give him free advice from time to time when he calls and we meet for lunch every now and then.
No, the reason is
https://en.wikipedia.org/wiki/Vitality_curve
> The vitality model of former General Electric chairman and CEO Jack Welch has been described as a "20-70-10" system. The "top 20" percent of the workforce is most productive, and 70% (the "vital 70") work adequately. The other 10% ("bottom 10") are nonproducers and should be fired.
10% layoff means you are being ranked.
A head of large company once said, "I can cut the bottom 10%, but I don't. Because new 10% will be formed to take place"
When employees realize they are being ranked, they will hire the most mediocre people possible, so that their ranking relative to other employees goes up. This is how Ballmer almost killed Microsoft.
Yeah, just cut 1% at a time so they don't notice
There's also the WARN act.
10% comes from the ancient Roman tradition of Decimation https://en.wikipedia.org/wiki/Decimation_(punishment)
>> The dual purpose intended was to stiffen discipline amongst the army at large and to demoralise the enemy
I'm sure every executive is calling back to their days studying roman history when they decide how much of a layoff will balance the books/turn the company profitable for its stakeholders.
I think it's entirely reasonable that they come from the same place. 10% is about the right number to apply in both contexts if one was choosing arbitrarily. We are effectively 'decimating' with our layoffs.
Though one notable difference is that with layoffs it's an excuse to drop so-called poor performers, but I believe decimation was more or less random i.e. drawing straws.
10% is just the right amount, that has been proven empirically over few millennia, to stiffen discipline and improve results
Nothing like a decimation to improve performance <s>
That only creates discipline if the other 90% of Meta is forced to kill the 10% with rocks though. Also make sure to pick the 10% with the short straw method to let everybody know they're not safe.
Layoffs by dice rolls is probably better than pick and choose.
Way too much friendship and "office politics" involved in who to pick anyways to be better than random.
Last in first out is probably good too.
Wasn't the point of decimation, if there was one, to make the soldiers themselves decide who was executed?
> MAMA (Meta, Alphabet, Microsoft, Apple)
This is such a lost opportunity for MAGMA (Meta, Amazon, Google, Microsoft, Apple)
Is Meta still part of this now that they're struggling? The big four remaining allow for other combinations.
holy shit, isn't Apple 10 times bigger (valued) than Meta right now?
It's simple: There's federal law governing mass layoffs: https://www.dol.gov/agencies/eta/layoffs/warn
10% is already a mass layoff for unicorns.
It is 10-15% because that's how the HR do their incremental grading of their employees across performance scale.
And it is easier for corporations to discharge the bottom feeders if and when they need to improve their bottom line.
Mostly Optics.
Anything larger is desperate.
Anything smaller doesn’t really move the needle that much beyond normal churn.
It's pretty ingrained in management culture whether they know it or not - https://en.wikipedia.org/wiki/Vitality_curve
> One venture firm I know is encouraging companies to assume they should cut 50% and then use financial modeling to prove otherwise.
Is there any common tooling to do that kind of financial modeling other than spreadsheets?
Because to investors, 10-16% shows you’re cutting fat. 25% or more shows you’re cutting off limbs and the firm is in distress. If I owned the second I would probably look to sell it.
Substack is very annoying with the modal that appears as soon as I start scrolling the page
A correction to the last bull market
10-15% is a lot to let go of in one go, but hopefully no one would do something as idiotic as laying off 50% of their workforce, though right?
> many companies have had their mission drift during the Trump years and COVID. Rather than founder-led customer-centric mission orientation, companies drifted into a number of other arenas often driven by a small proportion of their most vocal activist employees.
What does this even mean? How would "activist" employees change the company directions and its finances?
The more obviously related changes were the variations of moderation on free speech. “Fact checking”, “hate speech moderation”, “community guidelines”, etc.
Apart from completely illegal stuff, all of these platforms more or less just let whatever fly until the Trump era began.
Goldilocks firing.
because that's roughly the amount of ESG dead weight.
nobody's firing productive workers.
>> nobody's firing productive workers.
Remind me why Twitter is trying to rehire workers they let go, within a week?
They are only rehiring a handful. Stop spreading propoganda
...I'm not? "trying to rehire workers they let go" is missing the word "all". Perhaps -you- read that particular qualifier into it, but it's just as valid to understand it, as it was intended, to imply "some", especially since the existence of -any- rehired employee refutes the statement it was in response to.
I assume you got terrified when you heard, say, "Jeffrey Dahmer ate people", and started to question your own existence since obviously if he ate ALL the people you couldn't be here?
They'll be rehiring more when the people they thought they were keeping leave because remote is a deal breaker.
I think by now it's understood that the goings-on at Twitter are extraordinary and out of the norm.
because twitter's own execs and HR had their say
https://mobile.twitter.com/RichardHanania/status/15911538663...
That has no bearing whatsoever? That link itself says "Mr. Musk's team brushed aside the suggestion", meaning that didn't effect who was let go, but -even if it did-, it still would have no bearing, since regardless of who made the decision, or for why, the fact they're being sought after to be rehired so soon means your initial statement "nobody is firing productive workers" is false. Someone fired workers who were sufficiently necessary as to realize they -need them back- within a week.
it does however suggest that some people might have been fired for reasons other than merit
First off, it doesn't apply, given that the very link you included explicitly states that while there was a recommendation from execs and HR, Musk's team chose not to follow it. So it's irrelevant.
Second, even if those recommendations were followed...that's an argument -against- your initial statement that "nobody's firing productive workers." I.e., if they were fired for reasons other than merit, than -somebody fired productive workers-.
I would be surprised if even the execs ordering the cuts thought they weren't firing any productive workers. A percentage based layoff is a broad brush to paint with that has a lot of collateral damage.
"Now is a time for CEOs and their teams to give themselves permission to toss out old assumptions about their company, mode of operating, growth targets, team, culture and mission. There will be few opportunities to make big changes like in the current environment."
Good luck. If you think CEO's give a damn about success you really don't know what the job of executives is for.