"With our culture of bringing our whole selves to work and seeing team as family, with shared values we live by,..."
In the American business world, you are an employee until you aren't. Confusing being an employee with being "family" is a mistake, both for the company and the employee.
When times get bad, companies do what it takes to survive, including throwing employees overboard. That's just a fact.
Buffer may have thought it was different, but that flow-chart of how they decided who to layoff was entirely about how an employee can help the company, not how the layoff would affect the employee. That's not how normal families make decisions.
I have no problem with any of that, but anyone who thinks that way has another thing coming.
All of this isn't to say that Buffer was thoughtless or callous in how they handled it. From the outside, it looks like one of the better handled layoffs I've seen.
But still. Don't confuse your job with your family. It's a business relationship that is only maintained as long as it is in both side's interest to do so.
> The key concept is summed up in the 23rd slide. “We’re a team, not a family,” it reads. “Netflix leaders hire, develop and cut smartly, so we have stars in every position.”
Your last sentence here is really important. If that's the mindset a person is in, when a business-centric action happens they won't feel as betrayed. Trust me, feeling betrayed while also fully logically knowing you shouldn't feel betrayed because it's a corporation in a capitalist ecoystem is such a bad feeling.
I agree the whole family thing is ridiculous. However, the performance focus of Netflix is probably too far on the other end and ridiculous too. People are not machines and performance will not always remain high. And also measurements of performance of people are often silly and useless. Performance will fluctuate and change with time. So a level a loyalty in the face of bad performance is still very advantageous even for businesses.
Some happy medium between family and performance oriented needs to be found.
I actually think this is important. Working with an asshole is a big problem, and I fully admire leaders who know when it's time to let someone go because the situation cannot improve. It certainly beats working in a caustic environment because people are afraid to fire someone.
There's plenty of agreement with you, so I'll offer a counterpoint.
When a company is small--less than 10 or 20 people--it really can feel like a 'family' in that everyone would rather see the company fail than break apart. "Layoffs" aren't realistic in such an environment; the company is either working or it isn't.
As a company grows, these rules necessarily change. It's just a fact of having more people, as the momentum of the company becomes bigger than any individual. It's part of how a company grows. I've watched it happen; it's a strange thing and it feels like something has been lost, no matter how necessary it is.
The change from a tight-knit team, battling for success against all odds, to a sizable company with growth curves, finances, lawyers, outlooks, audits and EBITDA can sneak up on you. I think it would especially surprise early employees and founders, who remember the days when it didn't feel like a company at all.
Employment is never quite 'family'. But there's reasons to be empathetic to these founders' mistakes and choice of words, rather than a blanket "anyone who thinks that way has another thing coming."
Judging by the downvotes, it looks like your comment is controversial.
I actually agree with you. In a relationship we trade constantly, something for something else: love for love, company for company, or any combination. They are like constant bi-directional streams.
As long as both parties are happy with what they receive and give, they will maintain the relationship; when that's not the case, well, that's when we get divorces, friendships destroyed, etc.
Yes, blood relationships are somewhat special, but if for instance you permanently severe the relationship with your kids, even though you can still claim they are your kids, I don't think is any different than not having kids at all.
However, if you factor in the fact that humans are emotional and highly unpredictable by nature, you'll quickly realize that constantly applying strategies from the business world to your personal relationships will quickly blow up in your face.
Flexibility and balance in how you approach things are key.
How many times do I have to get annoyed at my kid for waking up in the middle of the night before you're OK with me kicking him out of the house? Keep in mind that he is currently 11 months old...
Perhaps true, in a real super rational techy view of the world, as long as by long term you mean the entire life of all the family members.
But not a particularly useful observation, just as the concept that "giving to charity is an act of selfishness, since people only only do it to feel better about themselves" might be true but is not useful.
I really appreciate your further comments. I agree for most part that humans and other living things ultimately act out of self-interest.
However, there are circumstances when rationale breaks, like when member of your family develops a terminal decease. A purely rational decision would be to cut emotional and financial losses and abandon them, wouldn't it? Yet, luckily, we don't see that happen.
The length to which we go to keep family relationships is irrational, yet I suspect it's a huge component of how we managed to ensure reliance of a system and develop huge societies.
<The blow was softened by my getting a ridiculous severance package–all my vacation days paid out in cash before I walked out the door that day, plus six weeks of severance pay...>
But as it turns out, that was two weeks of severance plus the bonus he had already earned implemented as four weeks of extra severance.
I agree 100%. I've worked for multiple companies that say "we're a family", then lay off people with no warning or remorse. Businesses are not families.
And businesses are cutthroat capitalists when it benefits them.
All that family nonsense is just to talk employees out of looking after their own interests.
Your relationship with your employer is inherently antagonistic, and anyone who tells you otherwise is selling you some BS. That doesn't mean you can't work well together, but sometimes your interests align with the company, and sometimes they don't.
From my perspective, it's not so much the "warning or remorse" (or lack thereof) as the fact that the company _will_ do it.
The Buffer guys clearly feel remorse, and wish they had better sense about warning. They regret that the layoffs are necessary.
But they are still doing it--which they should--its the people (including themselves) who deceived themselves about the relationship they have with the company that are in trouble.
Not only is it not cynical, but should be taught to every college student, regardless of major and specialization in their general business elective class.
There is very little overlap between a family (or even a friendship) and a business (unless the business is mandated by law to provide benefits similar to what a family does - which it usually isn't)
Companies want you to be family so you can give more. In a family system, the family tends to fend and tolerate dysfunctional members. Usually it's the company that is the black ship and everyone tolerates and busts their ass carrying the company. Once things get tough, the family analogy gets thrown out the window and it's all business.
And, don't confuse your family with your job. Family relationships ("better/worse, richer/poorer, sickness/health") are unbreakable, by original intention at any rate.
Job relationships ("voluntary, subject to termination by you or company at will, for any reason or none, with or without notice, at any time") are not even close to family relationships.
Until we get job-divorce judges like we have family court judges, with the power to divide assets, the idea that a workplace is a family is wishful thinking, at best.
Family and community and culture happen organically so long as we are all humans. The company is what is structural and functional, with its existence depending solely on the performance of its functions. The problem is that the structure that gives rise to these functions are real humans. That is why restructuring implies firing people.
In the beginning the rewards from the human elements are far greater than the performance of the company. It could even be all you've got. You could have no profits, be in stealth, just prototyping, etc. Here the company could just be a promise written on a napkin or a handshake between founders. It could dissolve any minute.
Eventually though, once the company grows to the point where it hires people and makes money and pays taxes, the value of the company begins to far outweigh that of any individual member, or of any organic human elements that tends to adjust themselves anyway. This is when the company you founded might turn around and fire you. But congratulations, that's also when you know you've (sort of) made it...
The takeaways is to know your function. So long as you do, you should be able to predict if you belong. And if you know you don't, you should expect to be let off, knowing only that the people running the company are doing their job correctly.
"Buffer may have thought it was different, but that flow-chart of how they decided who to layoff was entirely about how an employee can help the company, not how the layoff would affect the employee."
I read that chart differently, they are retaining their longest tenure staff in each area without regard for ability. Seems a lot more "family" like to me.
So how do you account for companies like ours when, during hard times the CEO and CTO took no pay for two months so that they could continue paying employees?
Or by offering employees the same class of stock as the founders with the same voting rights etc...?
Two whole months (rolls eyes)? You think they did because of a sense of "family"? Maybe they didn't want employees leaving in this labor market and I'm guessing they didn't want to lay people off because others would take that as a signal to jump ship. Trust me, if things get bad, they'll let people go. Two months is not really bad.
Founders effectively have the same class of stock as employees when it comes to value, except for voting rights. Voting rights are usually sensitive, because the new normal is for founders to have a different class stock upon going public to preserve their ability to control the decision-making process, even in the face of an activist shareholder.
You actually want your founders to have these voting rights typically. Most activist shareholders tend to say things like "your business would be a lot more profitable without this expensive engineering team. You don't need A players to maintain the technology you've already built, you should fire most of your team and outsource them." Suddenly preserving founder control sounds a lot better, eh?
> "With our culture of bringing our whole selves to work and seeing team as family, with shared values we live by,..."
This is total BS that employers might say to employees but either people will be foolish to believe so.
In India I worked for a large company that indeed operated like family. The company avoided layoffs by cutting salary of high performing employees to retain non-performers. Promotions were based only on number of years of service and not ability etc. But that is why I left for USA.
Employers should not feel ashamed to lay off people. It is not the case that people cant find other jobs. In fact being honest and transparent about it can help people find other better jobs. Similarly employees must leave the company at the first sight of the distress and go for greener pastures.
"Employers should not feel ashamed to lay off people."
On the contrary, they absolutely should. It means they failed. Management should be punished for letting it get to that point, not rewarded for doing it as they often are.
I think it would have been a better decision to lay off 3-4 more people and let the remaining employees keep their perks and annual salary increase. 3% doesn't keep up with inflation. Maybe make that 4-5 people and create an incentive fund for those who kick some ass and help the company fight its way back from its mistakes.
3% absolutely does keep up with inflation[1][2] (whether it adequately compensates for increased experience as well is another matter).
The last 10 years US inflation was 3.2,2.9,3.8,-0.4 1.6,3.2,2.1,1.5,1.6,0.1 according to the world bank[2]. Giving the US an average inflation rate of just 1.96%.
That might have been the plan to profit from that announcement to get rid of the perks. In the long run, if your company keeps growing in size, the perks might hurt.
Very good point - you are only "family" during the good times and so not really family at all. I don't think that "being an employee until you aren't" is an American-specific thing but perhaps the selective conflating of "family" with work colleagues is.
I don't think it's cynical at all, I think a lot of how people view their job has to do with their evolution as an employee. If you fall in love with the mission, like the people you work with, it's easy to conflate family and work. You spend 8+ hours a day with these folks and the people you work with most likely care about you as much as you care about them.
The reality is that it's still business and decisions are made with the numbers in mind, especially when things get rough.
> Buffer may have thought it was different, but that flow-chart of how they decided who to layoff was entirely about how an employee can help the company
To be fair, this is not quite correct. The flow chart shows they fired the most recent people in redundant roles. Not the "worst" performing (what I guess Netflix would have done) or highest salaried. Giving seniority the benefit of the doubt, instead of only using unemotional cost/benefits analysis, is rewarding loyalty and is protecting "the tribe".
Spot on. The same is true in the UK. I've liked a lot of my colleagues over the years, and still count a fair few as friends, but the idea of a business being "family"? No way.
Working for a company is a transaction, plain and simple, unless of course it's your company. That obviously changes things, because you'll inevitably be more invested in it - including emotionally.
Learned the hard way by a man with powerful emotions.
>In the American business world, you are an employee until you aren't. Confusing being an employee with being "family" is a mistake, both for the company and the employee.
I would say this is just a common philosophy for successful businesses. A happy family is a wonderful unit, but that happiness depends on giving preferential treatment to the least rational people. Which is a bad business philosophy.
True, an employer-employee relationship is very different from family relationships.
However, I would have really appreciated this level of detail and transparency when I was laid off. I think the first thing the person who called me to lay me off said over the phone was "So you probably know why I'm calling."
Uh, no, yes? Is this supposed to be a guessing game?
"With our culture of bringing our whole selves to work and seeing team as family, with shared values we live by,..."
It's moronic drivel, isn't it. Apart from being nonsensical (how can you bring less than your whole self to work, unless you've had some sort of psychotic breakdown) and the poor English ("seeing team as family") it just reads like corporate babble. It's not a family. I care about my family. I don't care about my job, its stakeholders, its values, its products or its customers. It's just a job. I'm a wage slave so I do it for the money and for no other reason at all. Whenever I see a company stating their values I immediately lose any respect I might have had for them. It's as if they've been on a fact finding trip to north Korea.
That's the way you see it, and to a certain extent I feel the same way. But two things:
Even with unabashed cynicism there's no denying that structuring a company like a cult has a huge advantage in terms of retention, dedication, salary requirements, etc. This dovetails perfectly with SV's youth worship because young people are more likely to buy into this crap, and they are also more likely to be willing to conflate their work and social circles.
Somewhat more charitably, not all companies are the same. Given the choice I would prefer to work for Apple than for Facebook because I think the former is generally doing better things for the world than the latter. On a more extreme level, I would definitely consider taking a lower salary from a company or non-profit I felt was doing really good things in the world. The point is, while "we are a family" is straight bullshit, the values of a company should matter. If I were to treat my employment as a purely mercenary transaction with no regards to anything but the transaction then I would be complicit in furthering the global corporate hegemony which unbridled capitalism is leading us toward.
I agree with you. I have other reasons why I do the job I do, but would never do it if the money wasn't there. At the end of the day, the feel-good nonsense has no place in business decisions, and that really goes both ways in an employer/employee situation. You can like your job, even love it, but if you're not looking at it as a business transaction you will get screwed one way or another. Replay job and it for employee and them, and the same holds for the business. It's a mindset thing, and has everything to do with professionalism and nothing to do with touchy feel goodness. Polite but firm negotiations where both parties feel good with the outcome can be achieved no matter whether you like each other or not. (Although the friction may vary along that axis.)
> I don't care about my job, its stakeholders, its values, its products or its customers. It's just a job. I'm a wage slave so I do it for the money and for no other reason at all.
I guess that's what a decade of bad management and shitty start-up/big-corp work does to you. Personally, I'm happy that some people have an optimistic enough view of "the work" to want to change that reality, and make it a positive and good experience when enough money is involved to do so. If you read more into Buffer you will see that it is indeed not your typical company.
> how can you bring less than your whole self to work
This means basically wanting to be somewhere else rather than at work. i.e., their culture is one of being dedicated to work when you're at work; at least that's how I understand it.
> poor English
This is not uncommon colloquial English. “Team” and “family” here act roughly like “mind” does in the term “theory of mind”—basically nonspecific nouns.
> I don't care about my job…
Sounds like you are a poor fit for the culture they are trying to build. Presumably you would not enjoy working there. That does not make their concept of how to manage their company moronic, nor an explanation of it drivel, however.
Your comment is blazingly condescending toward a post that is clearly very well thought-out and considered, based solely on your disagreement with Buffer's approach to organizing their team and company. That seems wholly unnecessary, particularly since you present zero actual evidence of Buffer's approach being objectively worse, just your opinion that it is.
100% agree. I may be friends with my boss or others but the professional relationship is completely business. I don't expect that to help me out if there are cuts to be made or if I am underperforming, etc.
The most money I ever made was with a group of fellow startup friends, who I considered my family. Being a career warrior might work for you, but that idea worked for us.
But what would you have done if one of those friends had stopped coming to the office. Or just did bad work. Would you have let them stay on forever or would you eventually have fired them? That's the difference between family and a team.
While I agree with your points, I think the ongoing assumption we can effectively emulate the emotional response of the ones who are actually are affected is starting to really get in the way. The expectation humanity can eliminate all suffering is unreasonable. That expectation is, in my humble option, an inefficiency driven by unreasonable sympathy. When I say "unreasonable" I mean laying blame where it isn't ours to lay. Consider the cost of unbounded empathy.
The Internet, and systems we are building, contributed to the unbounding.
Now the employees...they have a right to feel whatever they want about all this. They are the ones experiencing this, as you so well point out.
>In short, this was all caused by the fact that we grew the team too big, too fast. We thought we were being mindful about balancing the pace of our hiring with our revenue growth. We weren’t.
>Reflecting on it now, I see a lot of ego and pride reflected in that team size number.
> In many areas, we grew the team more than was truly necessary for the time, more than was clearly validated.
I feel like we all experience this pull by vanity metrics, ego, etc. The level of honestly we've seen in this post will hopefully serve as a reality check for many of us.
>Both Leo and I have taken a salary cut of 40% until at least the end of the year. Savings: $94,000.
>Leo and I are committing $100k each in the form of a loan at the lowest possible interest rate, with repayment only when Buffer reaches a healthy financial position. Savings: $200,000.
This is an attitude and decision I saw made by the C-level during the financial crisis at a company with hundreds of employees. The C level took home $0 in pay and the staff took at 40% until they made it back to profitability, in order to avoid laying anyone off (this is Japan where reemployment would be incredibly difficult).
It shows maturity and commitment to the organization (i.e. your people) that is rarely seen these days in startup land. Much respect.
Was just going to post at a higher level, but your comment nails it. These guys are feeling the pain. It's clear. There is honesty going on here - I feel a lack of cynicism from the post, real soul searching, and for that, I can mitigate the otherwise knee-jerk negativity to the managers that I usually feel on layoff justification posts. Reality is hitting people. The market is slowing. Tough choices. No forgiveness for not having seen it, and for hurting the laid off people, but at least I see a genuine search for reasons and genuine empathy. Good post, under the circumstances.
Here's hoping that the wisdom on display will serve this company well.
1) They planned to spend 1/3 of their remaining cash on flying people around the world to meet f2f. Whoah! They need a CFO with some real power, because that is absurd.
2) Speaking of needing a CFO, one of the first things a CFO will probably point out to them is that their cash target is off by 100%. They're targeting hitting 50% of today's ARR sometime next year, yet they plan to grow ARR in 12-18 months by double. If they truly want 50% ARR on hand, they need to target $10M, not $4-5M.
I also have some questions about the graph -- I'm sure it's well-meaning but it looks fishy. The slope of the curve is noticeably better in the go-forward plan vs the status-quo plan, but there's no logic to support that in the post. I imagine there's a breakdown that makes this make sense, but it's not at all obvious, and the naive conclusion is that these people who were fired were actually slowing down sales somehow. Secondly, every time I see a graph where the next month is negative and then ... magic... and the slope goes positive, my spidey sense tingles pretty damn hard. That said, there are some obvious reasons this might happen, including the cost of the layoff being recognized next month, so that's less of an obvious red flag.
A couple of months ago they published a blog post which received coverage on HN talking about how they saved 120k by performing an audit of their infrastructure and killing unused AWS instances. It was obvious from the post that they were in the situation because there were no controls in place. And it didn't sound like they planned to implement any real controls going forward to prevent ending up there again.
Same reaction. They might be super transparent and everyone (in the comments at the bottom of the post) are in awe of it, but these numbers just make no sense.
FWIW, here's their public spreadsheet of salaries and calculations. Not sure if it's been recently updated (on closer look, seems to reflect the founders' stated pay cuts, and new hires as recent as last month):
I admire Buffer for being so transparent with their salaries, but I don't think I would ever decide to work for a company that mandated it.
In my (admittedly limited) experience, mandating salary transparency tends to increase the salaries of low performers and reduce the salaries of high performers. It usually eliminates the potential for negotiating raises and poses difficult questions about paying some employees more than others in the same band.
Case in point: according to Buffer's salary calculator[1], a "master" (their highest rank) backend developer living in San Francisco and optimizing for salary over equity would earn about $155,000/year. I can't think of any definition of "master" developer that could be competitive for. Friends of mine at AmaGooBookSoft and even other startups have earned nearly double that for being merely "senior" (L5).
The $155k salary might be due to the transparency, but could it also be due to a simple inability to pay developers $300k+? That's well over double the CEO's salary. I think it's clear they simply don't have the revenue and cash reserves to pay developers that kind of money. I suspect you'll find this to be true at a lot of smaller startups that rely on actually making money instead of fundraising.
I think you're going to get perfectly good developers for $150,000. Are you going to get twice as good ones if you pay twice that, or just greedy ones? Have transparency and let someone else pay the darlings. You'll still get your work done.
It is very interesting to me that the founders have agreed to pay people in very low-cost-of-living areas almost as much as people in San Francisco. I'm pretty sure USD$95k in South Africa, Croatia, or Italy beats the pants off $120k in SF lifestyle wise. I guess the founders have not traveled to these places or fine with overspending?
The value the developer brings to the table does not fluctuate with the cost of living of the place he lives at. The profit that can be made in arbitraging CoL should mostly go to the developer, since he is the one who also has to bear the negative features of living in a low CoL place, which are often overlooked in a naive dollar-to-dollar comparison.
Looked at from the other side, it's a competitive process between employers and there's no reason why other companies wouldn't pay top dollar for a top developer. If Buffer didn't pay it, the developer would find another employer who would.
I have several friends who have received large salary increases when they were about to quit. This clearly shows that they were payed too little before. The kind of transparency buffer shows in this sheet can prevent such a situation.
Having a transparent formula for salary limits or removes the effects of negotiation, which likely benefits engineers (typically bad at negotiating compared to e.g. sales people) and women/minorities (worried about increasing "otherness" further and sometimes lower leverage, at least in tech).
There are potential downsides such as increased politics or income inequality pressures, but it seems like a viable policy at least. I'm curious how someone like Google's Laszlo Bock would respond to this approach in comparison to their "pay unfairly"[1] mentality.
It's part of their ethos, be totally transparent on how much everyone gets paid. You can't negotiate or ask for a different salary, there's a calculation.
I wonder if those laid off were from the "chose higher salary over equity" crowd. It's certainly more attractive to do so and that's something people should consider when given that choice.
TBH, that's a win-win. There's nothing better than being content with what you're paid, and then learning that there's huge upside potential.
The worst thing ever is finding out that you're in the top 2% of salaries for your role in the industry, and then knowing there's nowhere to go but down from there.
As much as I want to dive into armchair management here, I greatly respect the fact that the buffer folks remained committed to the total open transparency thing, even when it didn't paint the business in a positive light. That takes a lot of balls
In a world where business failures are rarely documented, people ought to celebrate the fact that these guys are giving the world a recorded history of the lifecycle of their company, their thoughts when making business decisions etc. There is immense value to be gained for anyone in this industry
>> We canceled our upcoming team retreat to Berlin. Savings: $400,000.
Compared to all their other costs that one stood out the most. 500k savings laying off 10% of your workforce compared to 400k for a team retreat in Berlin.
That does seem astronomical. $4,000 per employee if they have ~100 employees like they say.
Anyone think their salaries are absurdly high for some locations and positions?
They've got Adnan working as an "Advanced Backend/Frontend Developer" in Sri Lanka, making only $65,104. This actually makes sense to me because Sri Lanka's cost of living is pretty low.
But they've got an Advanced "Happiness Hero" which I presume is an email support role making $77,397 in Kentucky. Last time I checked, $77,000 is an extraordinarily high salary in KY, especially for someone doing email support.
Yes, I agree with you. Unless I'm fundamentally misunderstanding what a "Happiness Hero" is, it appears they are paying a developer's salary for email support. $77k in Louisville, Kentucky would be about $135k in NYC.
$77k is not "extraordinarily" high for Kentucky without any context, but it would be very surprising for an email support role. In fact, I would expect $70k to be a very upper bound for technical support in NYC.
That said, there might be a very technical component of the job role that we do not have any insight on.
$4,000 would barely cover business-class airfare between SF<->Berlin for one employee. Not to mention accommodations, event space, meals and entertainment.
That's assuming what they do is straight e-mail support. I'm not sure what a happiness hero does but they might be expected to do much more than e-mail support. In many companies the "success manager" role tends to require people with more education and technical background to do in-depth troubleshooting and real customer interaction.
While Buffer's transparency is incredible, the financial calculations in the article fail to account for the possibility of an employee exodus domino effect, especially after both knowing the financial state of the company, and relevant perks being cut.
Machiavelli's _The Prince_ has excellent advice on this topic.
If you must do bad things, do them all at once. Then create a steady stream of better than expected events. People will get over the shock of the bad, and will remember the good.
By contrast if you try to hold back some of the bad, it will drip out bit by bit. Then people will get scared about where the real bottom is.
I would actually think the opposite: if you're a buffer employee right now, you know a) the company will continue to exist b) that you're a valuable asset to the company and c) that your founders walk the walk when it comes to transparency and information sharing.
I'd assume a few people will leave for better offers in the next few weeks, but this seems to prove that the founders are dedicated to the company and can learn from mistakes - hardly the prompt for a mass exodus.
Not only that, but the founders themselves took a 40% pay cut each for the next year. That says to me that they value their employees enough that they chose that route rather than lay off an additional person. It's a strong gesture.
Except it seems as though they all signed up to be at a company that was transparent and practiced a certain way of doing business (and actually pushes it as one of the great reasons to work there) and then you find out it was all a lie and that management was hiding information from you as suited them. By their own admission the layoffs came out of the blue to staff despite the fact that they were deliberating on it for a while.
If they practiced what they preached they would have laid it all out early. Some people may have had other opportunities and left, others might have said that they would take a paycut for the greater good, etc.
What this may mean, is that some staff members think that the company isn't actually what it says it is, isn't genuine in its approach, and that they can't trust it to live up to it's values when the going does get tough.
From the outside looking in, I think I'd stay (if I was not laid off :D) because Buffer is transparent, because they refuse to be unprofitable, and because they aren't beholden to VC's.
In my book, Buffer's doing it "more correctly" than many start ups.
I don't follow your thinking at all. You're assuming that the truth is always so horrible that management can never fully reveal it, and your not accounting for the whiff of secrecy and gossip that can be much worse than the actual withheld information.
Right. In general, if you have a layoff and the job market isn't extremely tight, you will also lose some other employees you wanted to keep. Especially the ones who see that top management's plans aren't working and it's time to jump ship.
i wouldn't be worried about an employee exodus as they get loads of applications as is. and everyone is replaceable IMO.
the company fascinates me with their high salaries for customer service and relative low salaries for engineering. from that post, they've way more applications for customer service than engineering. why not save money by paying way less?
So just hire more people? No one is irreplaceable. Buffer is a very well known, and well regarded startup. An employee exodus would be a minor hiccup (and something that is very unlikely to happen at all).
Let's do some simple estimation! I haven't really looked at their spreadsheet, so this is just guesswork.
The product is fairly simple technologically yes, but the value is provided by making it easy to use so the customer saves time (= money). To do that you need a few UX people plus some developers (especially with web and mobile apps), call that 15 engineers/designers total, plus another 5 for ops. Now you need a sales team since your real money will be in selling to enterprises - call that 15 people. And on top of that you need customer support, and call that another 20 people. Now that we're up to 55 people, we need another 10 people worth of HR and 5 bean counters, that takes us to 70. Now cap it off with 10 managers/executives and we're up to 80, and I'm sure there's some things I was off about or forgot.
It's easy to forget about all the non-engineering resources you need for a medium-sized business.
If anyone reads this comment, FYI it is not remotely accurate. They have 23 just in engineering and 6 designers, with 2 in ops. We have AWS and these guys have incredibly run of the mill needs, why on earth would you need 1 ops person for every 3 developers...
They have nobody doing what you'd classify as a "sales." They have some marketing people, people doing whatever "customer research" is, a number of people working in "community" and a bunch working in customer success.
1) cron sucks, I hate using it. $10 / month to never configure cron again would be great.
2) Have you ever used Buffer? Chrome extension, in-app experience, cross-posting to multiple sites, drag-and-drop re-ordering, ...? It's not a single feature, it's "organize my social media posting".
At my company we had non-technical staff that had to update a YAML file to post editorial content to the homepage and mobile apps. For an engineer, IT person, etc, this is trivial. Not so for other people. I had to spend so much time supporting this I replaced it with Contentful (an API-based CMS). These are the kind of pain points that companies like Buffer try to solve.
Sales and account maintenance...I don't think it's a service/value proposition that companies (who aren't satisfied with building their own cron job) will just grok right away.
Your comment imply that you never worked in a company with larger customer base or in a company with sales department. I think this kind of comments is highly disrespectful to the team, given the the style how Buffer is managed and how transparent they are.
Readit News
"With our culture of bringing our whole selves to work and seeing team as family, with shared values we live by,..."
In the American business world, you are an employee until you aren't. Confusing being an employee with being "family" is a mistake, both for the company and the employee.
When times get bad, companies do what it takes to survive, including throwing employees overboard. That's just a fact.
Buffer may have thought it was different, but that flow-chart of how they decided who to layoff was entirely about how an employee can help the company, not how the layoff would affect the employee. That's not how normal families make decisions.
I have no problem with any of that, but anyone who thinks that way has another thing coming.
All of this isn't to say that Buffer was thoughtless or callous in how they handled it. From the outside, it looks like one of the better handled layoffs I've seen.
But still. Don't confuse your job with your family. It's a business relationship that is only maintained as long as it is in both side's interest to do so.
> The key concept is summed up in the 23rd slide. “We’re a team, not a family,” it reads. “Netflix leaders hire, develop and cut smartly, so we have stars in every position.”
Your last sentence here is really important. If that's the mindset a person is in, when a business-centric action happens they won't feel as betrayed. Trust me, feeling betrayed while also fully logically knowing you shouldn't feel betrayed because it's a corporation in a capitalist ecoystem is such a bad feeling.
Some happy medium between family and performance oriented needs to be found.
I actually think this is important. Working with an asshole is a big problem, and I fully admire leaders who know when it's time to let someone go because the situation cannot improve. It certainly beats working in a caustic environment because people are afraid to fire someone.
When a company is small--less than 10 or 20 people--it really can feel like a 'family' in that everyone would rather see the company fail than break apart. "Layoffs" aren't realistic in such an environment; the company is either working or it isn't.
As a company grows, these rules necessarily change. It's just a fact of having more people, as the momentum of the company becomes bigger than any individual. It's part of how a company grows. I've watched it happen; it's a strange thing and it feels like something has been lost, no matter how necessary it is.
The change from a tight-knit team, battling for success against all odds, to a sizable company with growth curves, finances, lawyers, outlooks, audits and EBITDA can sneak up on you. I think it would especially surprise early employees and founders, who remember the days when it didn't feel like a company at all.
Employment is never quite 'family'. But there's reasons to be empathetic to these founders' mistakes and choice of words, rather than a blanket "anyone who thinks that way has another thing coming."
In other words, every relationship is a trading relationship, and the currency of the realm isn't always, or even often, monetary in nature.
I actually agree with you. In a relationship we trade constantly, something for something else: love for love, company for company, or any combination. They are like constant bi-directional streams.
As long as both parties are happy with what they receive and give, they will maintain the relationship; when that's not the case, well, that's when we get divorces, friendships destroyed, etc.
Yes, blood relationships are somewhat special, but if for instance you permanently severe the relationship with your kids, even though you can still claim they are your kids, I don't think is any different than not having kids at all.
However, if you factor in the fact that humans are emotional and highly unpredictable by nature, you'll quickly realize that constantly applying strategies from the business world to your personal relationships will quickly blow up in your face.
Flexibility and balance in how you approach things are key.
But not a particularly useful observation, just as the concept that "giving to charity is an act of selfishness, since people only only do it to feel better about themselves" might be true but is not useful.
However, there are circumstances when rationale breaks, like when member of your family develops a terminal decease. A purely rational decision would be to cut emotional and financial losses and abandon them, wouldn't it? Yet, luckily, we don't see that happen.
The length to which we go to keep family relationships is irrational, yet I suspect it's a huge component of how we managed to ensure reliance of a system and develop huge societies.
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Reminds me of this terrific article from David Brady. https://heartmindcode.com/2013/08/16/loyalty-and-layoffs/
But as it turns out, that was two weeks of severance plus the bonus he had already earned implemented as four weeks of extra severance.
Ridiculous, indeed.
And businesses are cutthroat capitalists when it benefits them.
All that family nonsense is just to talk employees out of looking after their own interests.
Your relationship with your employer is inherently antagonistic, and anyone who tells you otherwise is selling you some BS. That doesn't mean you can't work well together, but sometimes your interests align with the company, and sometimes they don't.
The Buffer guys clearly feel remorse, and wish they had better sense about warning. They regret that the layoffs are necessary.
But they are still doing it--which they should--its the people (including themselves) who deceived themselves about the relationship they have with the company that are in trouble.
There is very little overlap between a family (or even a friendship) and a business (unless the business is mandated by law to provide benefits similar to what a family does - which it usually isn't)
Job relationships ("voluntary, subject to termination by you or company at will, for any reason or none, with or without notice, at any time") are not even close to family relationships.
Until we get job-divorce judges like we have family court judges, with the power to divide assets, the idea that a workplace is a family is wishful thinking, at best.
In the beginning the rewards from the human elements are far greater than the performance of the company. It could even be all you've got. You could have no profits, be in stealth, just prototyping, etc. Here the company could just be a promise written on a napkin or a handshake between founders. It could dissolve any minute.
Eventually though, once the company grows to the point where it hires people and makes money and pays taxes, the value of the company begins to far outweigh that of any individual member, or of any organic human elements that tends to adjust themselves anyway. This is when the company you founded might turn around and fire you. But congratulations, that's also when you know you've (sort of) made it...
The takeaways is to know your function. So long as you do, you should be able to predict if you belong. And if you know you don't, you should expect to be let off, knowing only that the people running the company are doing their job correctly.
I read that chart differently, they are retaining their longest tenure staff in each area without regard for ability. Seems a lot more "family" like to me.
The term you're looking for is "buddies".
Or by offering employees the same class of stock as the founders with the same voting rights etc...?
You actually want your founders to have these voting rights typically. Most activist shareholders tend to say things like "your business would be a lot more profitable without this expensive engineering team. You don't need A players to maintain the technology you've already built, you should fire most of your team and outsource them." Suddenly preserving founder control sounds a lot better, eh?
This is total BS that employers might say to employees but either people will be foolish to believe so.
In India I worked for a large company that indeed operated like family. The company avoided layoffs by cutting salary of high performing employees to retain non-performers. Promotions were based only on number of years of service and not ability etc. But that is why I left for USA.
Employers should not feel ashamed to lay off people. It is not the case that people cant find other jobs. In fact being honest and transparent about it can help people find other better jobs. Similarly employees must leave the company at the first sight of the distress and go for greener pastures.
On the contrary, they absolutely should. It means they failed. Management should be punished for letting it get to that point, not rewarded for doing it as they often are.
The last 10 years US inflation was 3.2,2.9,3.8,-0.4 1.6,3.2,2.1,1.5,1.6,0.1 according to the world bank[2]. Giving the US an average inflation rate of just 1.96%.
[1]:http://www.usinflationcalculator.com/inflation/current-infla... [2]:http://data.worldbank.org/indicator/FP.CPI.TOTL.ZG (Have to search down the page for it)
The reality is that it's still business and decisions are made with the numbers in mind, especially when things get rough.
To be fair, this is not quite correct. The flow chart shows they fired the most recent people in redundant roles. Not the "worst" performing (what I guess Netflix would have done) or highest salaried. Giving seniority the benefit of the doubt, instead of only using unemotional cost/benefits analysis, is rewarding loyalty and is protecting "the tribe".
Working for a company is a transaction, plain and simple, unless of course it's your company. That obviously changes things, because you'll inevitably be more invested in it - including emotionally.
Learned the hard way by a man with powerful emotions.I would say this is just a common philosophy for successful businesses. A happy family is a wonderful unit, but that happiness depends on giving preferential treatment to the least rational people. Which is a bad business philosophy.
However, I would have really appreciated this level of detail and transparency when I was laid off. I think the first thing the person who called me to lay me off said over the phone was "So you probably know why I'm calling."
Uh, no, yes? Is this supposed to be a guessing game?
It's moronic drivel, isn't it. Apart from being nonsensical (how can you bring less than your whole self to work, unless you've had some sort of psychotic breakdown) and the poor English ("seeing team as family") it just reads like corporate babble. It's not a family. I care about my family. I don't care about my job, its stakeholders, its values, its products or its customers. It's just a job. I'm a wage slave so I do it for the money and for no other reason at all. Whenever I see a company stating their values I immediately lose any respect I might have had for them. It's as if they've been on a fact finding trip to north Korea.
Even with unabashed cynicism there's no denying that structuring a company like a cult has a huge advantage in terms of retention, dedication, salary requirements, etc. This dovetails perfectly with SV's youth worship because young people are more likely to buy into this crap, and they are also more likely to be willing to conflate their work and social circles.
Somewhat more charitably, not all companies are the same. Given the choice I would prefer to work for Apple than for Facebook because I think the former is generally doing better things for the world than the latter. On a more extreme level, I would definitely consider taking a lower salary from a company or non-profit I felt was doing really good things in the world. The point is, while "we are a family" is straight bullshit, the values of a company should matter. If I were to treat my employment as a purely mercenary transaction with no regards to anything but the transaction then I would be complicit in furthering the global corporate hegemony which unbridled capitalism is leading us toward.
I guess that's what a decade of bad management and shitty start-up/big-corp work does to you. Personally, I'm happy that some people have an optimistic enough view of "the work" to want to change that reality, and make it a positive and good experience when enough money is involved to do so. If you read more into Buffer you will see that it is indeed not your typical company.
^ why I downvoted you.
> how can you bring less than your whole self to work
This means basically wanting to be somewhere else rather than at work. i.e., their culture is one of being dedicated to work when you're at work; at least that's how I understand it.
> poor English
This is not uncommon colloquial English. “Team” and “family” here act roughly like “mind” does in the term “theory of mind”—basically nonspecific nouns.
> I don't care about my job…
Sounds like you are a poor fit for the culture they are trying to build. Presumably you would not enjoy working there. That does not make their concept of how to manage their company moronic, nor an explanation of it drivel, however.
Your comment is blazingly condescending toward a post that is clearly very well thought-out and considered, based solely on your disagreement with Buffer's approach to organizing their team and company. That seems wholly unnecessary, particularly since you present zero actual evidence of Buffer's approach being objectively worse, just your opinion that it is.
But what would you have done if one of those friends had stopped coming to the office. Or just did bad work. Would you have let them stay on forever or would you eventually have fired them? That's the difference between family and a team.
The Internet, and systems we are building, contributed to the unbounding.
Now the employees...they have a right to feel whatever they want about all this. They are the ones experiencing this, as you so well point out.
I have a pretty good idea of what both sides feel like.
Both sides suck. Really bad. It hurts like hell. Probably worse to be layed off than do the laying off.
>Reflecting on it now, I see a lot of ego and pride reflected in that team size number.
> In many areas, we grew the team more than was truly necessary for the time, more than was clearly validated.
I feel like we all experience this pull by vanity metrics, ego, etc. The level of honestly we've seen in this post will hopefully serve as a reality check for many of us.
>Both Leo and I have taken a salary cut of 40% until at least the end of the year. Savings: $94,000.
>Leo and I are committing $100k each in the form of a loan at the lowest possible interest rate, with repayment only when Buffer reaches a healthy financial position. Savings: $200,000.
This is an attitude and decision I saw made by the C-level during the financial crisis at a company with hundreds of employees. The C level took home $0 in pay and the staff took at 40% until they made it back to profitability, in order to avoid laying anyone off (this is Japan where reemployment would be incredibly difficult).
It shows maturity and commitment to the organization (i.e. your people) that is rarely seen these days in startup land. Much respect.
Here's hoping that the wisdom on display will serve this company well.
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1) They planned to spend 1/3 of their remaining cash on flying people around the world to meet f2f. Whoah! They need a CFO with some real power, because that is absurd.
2) Speaking of needing a CFO, one of the first things a CFO will probably point out to them is that their cash target is off by 100%. They're targeting hitting 50% of today's ARR sometime next year, yet they plan to grow ARR in 12-18 months by double. If they truly want 50% ARR on hand, they need to target $10M, not $4-5M.
I also have some questions about the graph -- I'm sure it's well-meaning but it looks fishy. The slope of the curve is noticeably better in the go-forward plan vs the status-quo plan, but there's no logic to support that in the post. I imagine there's a breakdown that makes this make sense, but it's not at all obvious, and the naive conclusion is that these people who were fired were actually slowing down sales somehow. Secondly, every time I see a graph where the next month is negative and then ... magic... and the slope goes positive, my spidey sense tingles pretty damn hard. That said, there are some obvious reasons this might happen, including the cost of the layoff being recognized next month, so that's less of an obvious red flag.
https://docs.google.com/spreadsheets/d/1l3bXAv8JE5RB9siMq36-...
edit: Adding links to their blog posts:
https://open.buffer.com/transparent-salaries/
https://open.buffer.com/introducing-open-salaries-at-buffer-...
In my (admittedly limited) experience, mandating salary transparency tends to increase the salaries of low performers and reduce the salaries of high performers. It usually eliminates the potential for negotiating raises and poses difficult questions about paying some employees more than others in the same band.
Case in point: according to Buffer's salary calculator[1], a "master" (their highest rank) backend developer living in San Francisco and optimizing for salary over equity would earn about $155,000/year. I can't think of any definition of "master" developer that could be competitive for. Friends of mine at AmaGooBookSoft and even other startups have earned nearly double that for being merely "senior" (L5).
[1]: https://buffer.com/salary?r=1&l=10&e=3&q=1
Not as a base salary. No way. They earn that, but ~50% comes from equity.
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Around here, $50k entry and $90k 10y+ senior for developers is fairly standard.
Looked at from the other side, it's a competitive process between employers and there's no reason why other companies wouldn't pay top dollar for a top developer. If Buffer didn't pay it, the developer would find another employer who would.
There are potential downsides such as increased politics or income inequality pressures, but it seems like a viable policy at least. I'm curious how someone like Google's Laszlo Bock would respond to this approach in comparison to their "pay unfairly"[1] mentality.
[1] http://www.businessinsider.com/google-policy-to-pay-unfairly...
They've got blog posts about it.
https://open.buffer.com/introducing-open-salaries-at-buffer-...
And I have to commute to work. Lose-lose.
The worst thing ever is finding out that you're in the top 2% of salaries for your role in the industry, and then knowing there's nowhere to go but down from there.
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In a world where business failures are rarely documented, people ought to celebrate the fact that these guys are giving the world a recorded history of the lifecycle of their company, their thoughts when making business decisions etc. There is immense value to be gained for anyone in this industry
Compared to all their other costs that one stood out the most. 500k savings laying off 10% of your workforce compared to 400k for a team retreat in Berlin.
Is this typical?
Anyone think their salaries are absurdly high for some locations and positions?
They've got Adnan working as an "Advanced Backend/Frontend Developer" in Sri Lanka, making only $65,104. This actually makes sense to me because Sri Lanka's cost of living is pretty low.
But they've got an Advanced "Happiness Hero" which I presume is an email support role making $77,397 in Kentucky. Last time I checked, $77,000 is an extraordinarily high salary in KY, especially for someone doing email support.
$77k is not "extraordinarily" high for Kentucky without any context, but it would be very surprising for an email support role. In fact, I would expect $70k to be a very upper bound for technical support in NYC.
That said, there might be a very technical component of the job role that we do not have any insight on.
Do you think an office for 100 people would cost less than $400K/year? (I know it wouldn't in NYC.)
See my notes on this here:
http://pixelmonkey.org/pub/distributed-teams/notes/#mixing-d...
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If you must do bad things, do them all at once. Then create a steady stream of better than expected events. People will get over the shock of the bad, and will remember the good.
By contrast if you try to hold back some of the bad, it will drip out bit by bit. Then people will get scared about where the real bottom is.
I've seen his tactics play our over and over again during my working lifetime.
I'd assume a few people will leave for better offers in the next few weeks, but this seems to prove that the founders are dedicated to the company and can learn from mistakes - hardly the prompt for a mass exodus.
If they practiced what they preached they would have laid it all out early. Some people may have had other opportunities and left, others might have said that they would take a paycut for the greater good, etc.
What this may mean, is that some staff members think that the company isn't actually what it says it is, isn't genuine in its approach, and that they can't trust it to live up to it's values when the going does get tough.
In my book, Buffer's doing it "more correctly" than many start ups.
i wouldn't be worried about an employee exodus as they get loads of applications as is. and everyone is replaceable IMO.
the company fascinates me with their high salaries for customer service and relative low salaries for engineering. from that post, they've way more applications for customer service than engineering. why not save money by paying way less?
...could anyone explain to this naive commenter how it takes 90 (80 for that matter) people to run essentially a 'cronjob as a service' business?
The product is fairly simple technologically yes, but the value is provided by making it easy to use so the customer saves time (= money). To do that you need a few UX people plus some developers (especially with web and mobile apps), call that 15 engineers/designers total, plus another 5 for ops. Now you need a sales team since your real money will be in selling to enterprises - call that 15 people. And on top of that you need customer support, and call that another 20 people. Now that we're up to 55 people, we need another 10 people worth of HR and 5 bean counters, that takes us to 70. Now cap it off with 10 managers/executives and we're up to 80, and I'm sure there's some things I was off about or forgot.
It's easy to forget about all the non-engineering resources you need for a medium-sized business.
They have nobody doing what you'd classify as a "sales." They have some marketing people, people doing whatever "customer research" is, a number of people working in "community" and a bunch working in customer success.
1 HR person per 5.5 employees? This is insanely high. A company that size need 2-3, tops.
2) Have you ever used Buffer? Chrome extension, in-app experience, cross-posting to multiple sites, drag-and-drop re-ordering, ...? It's not a single feature, it's "organize my social media posting".
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