Here’s a thought that has been percolating in my mind for a bit since these “market adjustments” began a month or two back.
Somehow at some point, in what perhaps could be blamed on the ever-hated mass produced MBAs - companies got really comfortable with the “it’s not personal, it’s just good business” of letting go of their employees for a slightest reason, or sometimes for no reason at all - just to make it look to their investors like they got their shit together.
We are seeing a bit of a market downturn - but it hasn’t hit Amazon pocketbook now, has it? Are they in danger of running out of money? What happened to “people are our most important resource”?
And this brings me to my main point - I think years of this has had an unexpected side-effect the companies never signed up for: people started treating companies they way companies treating people and we are starting to see the results - quiet quitting, oft bemoaned lack of loyalty, job hopping, etc. Now I am not saying it’s all new, but at least in my observation it’s peaking now and my thesis is these things are connected.
I have no opinion on the MBA bit, but I think you're spot on about people starting to treat companies the way the companies are treating them.
~10 years ago, when I got my first job, I was in the minority, pretty much the only person cynical about big companies' claims how "people are our most important resource", how important is the company "culture" and all of that corporate kumbaya. And, at that point, the vast majority of people around me cared and wanted to do a good job, going up and beyond.
Fast forward to now, and pretty much everyone has the attitude of "f**k these guys", doesn't want to be there and will do the bare minimum to get by. And that's exactly what companies have demonstrated that they deserve.
People are tired of job hopping to get market pay, dealing with bulls**t, and being thrown under the bus at the slightest hint of an economic downturn.
Nearly 20 years ago, when I was trying to find HR for my first day, there was an older man talking with them already. He said, and I quote, 'Fuck you all, I got your exit interview right here' while grabbing his crotch. He turned to walk away, smirked at me, and said 'what? I'm retired now.'
Point being, I don't think you were the only one who didn't love the company 10 years ago.
> ~10 years ago, when I got my first job, I was in the minority, pretty much the only person cynical about big companies' claims how "people are our most important resource"
Could be also an age thing. I don't know how old you are but maybe ten years ago most of your colleagues were twenty somethings and now they are in their thirties or forties?
eh what? even 15 years ago it was common knowledge to just jump around every few years to advance your career. maybe it wasn't all out "f* these guys" but we definitely had no illusions about employer "loyalty" lol.
> People are tired of job hopping to get market pay, dealing with bulls*t, and being thrown under the bus at the slightest hint of an economic downturn.
So it's cool for employees to quit and job hop to get better pay, leaving their former employers with the effort and expense of replacing them, but not cool for companies to lay off employees to save money when markets contract?
I hate to break this to you, but the decline of company-employee loyalty started 40 years ago, and even before that it only existed as a result of unprecedented post-war prosperity and lack of global competition.
This doesn't mean that it's all downside for employees though. Amazon grew a huge business and paid their corporate employees top of market with huge upside over the last 20 years due to their phenomenal growth. It was a very good deal for those who worked in Amazon corporate over the last 20 years—a lot of people got richer than their parents ever could have gotten in the previous generation of more stable corporate jobs.
But make no mistake, Amazon is not a magic pot of gold, they still have a P&L like any other company. 17,000 employees are not cheap. Amazon grew from 800k employess to 1.3m and then 1.6m at the end of 2019, 2020 and 2021 in response to the pandemic. It is to be expected that their forecasts were not completely accurate in light of the generational event and tech sea change that the pandemic brought. The fact that people are scandalized by this is indicative of how insane the 12-year bull run for tech really was.
> We are seeing a bit of a market downturn - but it hasn’t hit Amazon pocketbook now, has it? Are they in danger of running out of money? What happened to “people are our most important resource”?
Companies plan for where the market is going, not last quarter’s results. It’s fully clear to everyone that the economy has shifted dramatically. They are adjusting as appropriate.
Also, these people will be laid off with severance. They were compensated toward the top of market (considering all tech companies) while they were employed. They have Amazon on their resume, which makes future job easier than average. I’m really not concerned about laid off (with severance) FAANG employees relative to the people earning literally 1/10th their comp who are losing jobs without severance.
> people started treating companies they way companies treating people and we are starting to see the results - quiet quitting, oft bemoaned lack of loyalty, job hopping, etc.
I really don’t think this is an appropriate comparison. The whole “quiet quitting” thing isn’t going to hurt companies like Amazon because they’ll just PIP the person out and replace them with the tens of thousands of qualified people wanting to get hired at Amazon and do good work. When some “quiet quits” it’s usually their peers who pay the price because the absentee coworker isn’t get their part of the team project done. Makes more work for everyone else, makes groups projects late, and potentially brings down performance reviews of people depending on their work to get their own work done. It’s not fair to write “quiet quitting” off as only affecting the company, because the company is going to be fine. It’s the coworkers who bear the brunt.
(Source: Had some “quiet quit” team members over my career, suffered greatly during those times)
> They were compensated toward the top of market (considering all tech companies) while they were employed.
Yea but no. This isn’t about Amazon, it’s about business culture writ large. Also not everyone at Amazon is a software engineer, and therefore it paid crazy amounts.
> When some “quiet quits” it’s usually their peers who pay the price because the absentee coworker isn’t get their part of the team project done
Quiet quitting is simply doing your job but not being a “try-hard” and not trying to get ahead or go above-and-beyond. It’s a lack of loyalty and treating your job as a trade of exactly 8hrs with a paycheck. If your coworker wasn’t doing their work, they didn’t quiet quit.
> It’s the coworkers who bear the brunt.
Sounds like a manager (company) treating workers poorly. If a factory had people quit and expected everyone else work extra hours, it’d be a labor violation. If they’re doing that to knowledge workers we say it’s laziness?
Conversely, if you had a coworker who worked 8 hours a day, did their job, and didn’t try to give extra, you shouldn’t fall behind unless management had exploitative expectations.
(Source: I have a soul and work. Managers tried to make me suffer greatly at times).
The idea behind quiet quitting is based around the idea of shooting for a 3 on a scale of 1-to-5 instead of shooting for a 4 or 5: AFTER management has dropped the ball and failed to acknowledge their efforts. People have twisted this to mean "I am going to do the bare minimum without getting fired" -- these people very quickly end up on PIPs or equivalent at many other companies, not just stricter employers like Amazon.
As an aside, it doesn't really make sense to quiet quit as a SWE for the sole reason of there still a ton of career upside for those who do good work[1]. If you're thinking of quiet quitting you probably just need a better employer.
[1] "Good work" as in people who actually get stuff done and produce good software, not those who merely just grind long hours to impress founders.
Isn't getting PIP'd and then fired not, "bare minimum to not get fired" though?
Sounds like those folks are doing much less than required not to be fired.
My understanding of "quiet quitting" was
a) it's a stupid term made up to give people a sense that they're in control of something they're not - needing to work to survive and;
b) you were explicitly not trying to climb any ladder and merely doing your job as it was described, not shooting for promotions or accolades of any kind.
"Quiet quit" team members are 100% fine to have around IMO, as long as they stay out of the way of the folks trying to take on the larger/harder problems. That's the thing I reject about modern workplaces: this idea that everyone has to be "progressing" or "climbing" all the time.
It's totally cool to punch in/punch out 9-5, it just needs to be clear that's what the role is, and how much that reduces your ability to determine what it is you work on during those hours.
> Companies plan for where the market is going, not last quarter’s results. It’s fully clear to everyone that the economy has shifted dramatically. They are adjusting as appropriate.
It goes both ways. If you planned so poorly and hired so fast that a minor perturbation in the market causes you to fire 17,000 people, you're still communicating that you putting profits above people.
the parent comment talks about "these companies". what happens when less prominent companies take a cue from fangs and start booting people out, only with crappier severance and crappier resumes? this is far from the last layoff.
Have we been in a bubble so long that people have forgotten that the raison d'etre for publicly traded companies existing is not to simply exist, but rather make profit and ideally continually expanding profit for share holders?
For a startup runway and growth of whatever nature are all that matter. You need to exist long enough for the exit event, and grow in a way that makes this more possible. If you have a two year runway, you have two more years to win your investors back their money and more. But this is not true for publicly traded companies. Simply surviving or, even worse, slowly burning reserves is not enough.
I know so many post-IPO startup employees that dismiss layoffs because "the company has tons of cash!"
Do you invest in a company because you think it won't go out of business for a decade? No you invest because their profit margins are healthy and you think they'll continue to grow in a sustainable, net revenue positive way.
I still remember the dotcom bubble, which was much shorter than what we've been in, and the public debate among investors was about the "new economy" and claims that "things are different now". However those old fuddy-duddies that kept arguing that companies need to make more than they spend were proven right in just a few years.
Today I see CEOs and executive leadership at companies genuinely surprised that they're being asked to prove that they can be profitable. I see generations of tech workers sincerely confused about the very idea of what it means to run a successful business.
Amazon is doing massive layoffs because they need to show investors that the know how to create value, and become more profitable. At least Amazon has shown periodically that they can make profit. There are plenty of post-IPO startups that have never proven that they are even capable of not running at a loss.
> “the raison d'etre for publicly traded companies existing is not to simply exist, but rather make profit and ideally continually expanding profit for share holders”
Should be noted the ideology that the purpose of a corporation is to maximize the profits for shareholder above all else is a modern obsession, and always takes a short term view. Starving a company just for a few good years of share prices is is dumb but often what that ideology leads to. Making profit is part or what a corporation should do, maximizing it above all else is not.
Similarly HOAs are supposed to maximize house value but funny how some of the highest property values are places like Palo Alto that aren’t known for HOAs.
Being able to easily lay off employees means that the companies are much happier hiring, too. Most of those fired will likely land another job soon, precisely because their new employer does not have to treat their hiring as a multi-year commitment.
Europe, which makes it very hard to let an employee go, tends to have significantly higher unemployment than the US, which is much more cavalier about layoffs. My 2c.
You can get rid of 20 people for next monday if you want to, you’ll just pay the due amount as defined in the contract and the law. It’s also not some astronomical amount, worst case scenario I think it’s around 6 months of pay, which isn’t that far from what you’d pay for a non compete for instance.
PS: also unemployment is a complicated figure, it’s hard to tell how much any specific variable impacts it. Unemployment rate goes up and down while laws stay mostly the same, so singling out labor laws is mostly an opinion at this point.
This was covered in ArsTechnica [1] and it seems like they are laying off a large portion of the Alexa team because it doesn't make a profit. I bought the Alexa when it first came out and it had and still has a great UI. When the Alexa launched I made a skill on the platform which I don't think anyone really downloaded. What confused me the most was Amazon never allowed for paid skills (which I really think was an extremely bad move) and it appears they just internally justified it as a loss leader but no developer would touch it from a ten foot pole. Cutting something that is a cost center is pretty much standard if you aren't showing as much growth that is expected for you. Therefore, cutting something that costs you ten billion dollars sounds pretty justified to me when they could have profited from it instead.
EDIT:
Guess I didn't do my research about paid skills...
Alexa is a bit of a mystery. The plan apparently was:
1. Sell millions of devices at cost. Unrelenting sales on Echo devices
2. ???
3. Profit
And Step 2 was never filled in. Maybe it was "if people can re-order paper towels by shouting at Alexa, we'll sell more paper towels". But that plan has its limits.
It makes me throw up every time I see corporate messages
speaking of family and employees being their most
important resource.
I have been around for long enough and I have learned
that a job is just a contract between parties and it
exists for as long as both parties can benefit from it.
Don't get caught up in the whole companies family kind of bs
or get too emotionally and culturally attached to your employer.
Always be on the look up for opportunities and take them.
Never stop learning and investing in yourself. Knowledge and experience
are your most important asset, keep nurturing them.
Also, I wanted to believe that a good chunk of these layoffs
should have seen this coming. One must be aware at all time of
how valuable (if at all) are for their employer.
When times are good (new technology being invented / adopted / marketed) nobody asks tough questions: the corporate structure somehow orchestrates production, new goods or services are being created, value is added, everybody participating in a meaningful way in the bonanza is "happy".
These periods don't last too long: Technologies are tried but discarded, or are too easy to reproduce and lead to saturation, or competition reaches fierce levels etc.
In "stable" or lean times the corporate structure becomes a ruthless spreadsheet optimisation exercise that focuses on exploiting every possible arbitrage (e.g., tax regimes, employee loyalty, overseas labor cost differences etc) to maintain the monetary profitability projections. This leads to endless corporate restructurings, financial engineering and other zero or negative sum games.
The lifecycle of a human being, the social and emotional needs to belong, contribute, feel appreciated and helpful, to create value when young and able, in order to receive value when old and frail. These things are not part of the corporate structure contracts. Neither is in any sense a sustainable planet (but thats part of another rant).
Amazon and all of these companies are laying people off based on future forecasts, not based on the current economy. Regardless of if people are first, no company wants teams sitting around not doing anything. I've been laid off, it sucks, but just because Amazon is making money today doesn't mean it will be tomorrow.
What’s unusual about this cycle though is that it’s the fear of a recession due to fed policy that is causing companies to cut back. In past cycles fed policy caused a recession nobody predicted and companies suddenly found their earnings in the toilet and made enormous cuts in head count, R&D spending, etc.
Something about this cycle and these cuts feels I dunno, manufacturered or something. Like are 7k high paying jobs at a salesforce indicative of an economy collapsing while the overall labor market is still extremely tight and you’re not hearing about similar layoffs throughout all industries?
All of these cuts seem to be follow the leader because we’re worried and I would not be that surprised to see the reality in the overall economy be much better than feared and these same companies hiring again before year end. It probably doesn’t hurt from the c level perspective that Wall Street tends to welcome job cuts at least in the short term. Although it can certainly do lasting damage to morale within a company.
> but it hasn’t hit Amazon pocketbook now, has it?
I'm not sure if this is the way a company thinks, even if they wouldn't have pressure from investors or worries for future survival (they would, BTW). Instead, some companies, likely Amazon too, view such cut as necessity for two reasons: bloated organizations slow everyone down, while diluting the company's culture; it's a great chance to trim the low performers. Not saying this is good or bad, just trying to explain the underlying logic.
> people started treating companies they way companies treating people and we are starting to see the results
Reid Hoffman wrote a book, The Alliance, which advocates that employees and companies are not family, but for an alliance. When they both have the right goal, they work towards the goal. When they don't, they part ways. Similarly, Netflix's Reed Hastings advocated that companies are like professional sports teams. A professional sports team is brutal when it comes to trading its players, but it does not mean the players will not pull their weights. I personally think the two views are more realistic and help employees advance their careers.
Most workers at large companies are seen as fungible cogs. Even the engineers. What you describe feels, unfortunately, like an antiquated idea from the 1900s.
I think we need more unions, more automation, and more social security. We are racing towards a future where there simply won’t be enough “jobs” for everyone and the companies sure as heck aren’t going to look out. Companies have no soul and the humans that run them have worked hard to insulate themselves from that being responsible for the actions of that lack of soul they instilled.
I disagree. What you describe is Western Europe with depressed wages and less innovation and dynamic economy. You can’t regulate/unionize into prosperity.
They got sucked into the "new normal" that never was, and was never going to be.
We are seeing a massive return to the old normal, which means people are going back to offices (not WFH) people are going back to shopping in person not online, people are going back to eating in restaurants not using Grub Hub or ordering online. etc etc etc
Both parties treating the transaction as simply a business transaction is a good thing for society.
Pretending that there is some value to "loyalty" in a vendor/customer relationship is silly, and only hurts you.
Job hopping is a good thing for price discovery, and keeps wages for skilled workers going up as inflation eats away at them. Layoffs in downturns are an expected consequence of workers getting more expensive (ie capturing more of their economic value in their paychecks).
I believe that there is a power swing about to happen where talented individuals may get a lot more powerful and influential in relation to institutions and corporations.
I liken it to how MANPADS allow individual soldiers to overpower tanks for far cheaper, flipping the script on 100 years of war.
It hasn’t fully come to pass yet but corporations hire way too many “credential dead weight.”
In my career I have often been completely outraged at how bad credentialed people are in the pure talent department. Some of the most credentialed people who automatically get top roles really are not that smart versus some of the other people I know.
Corporations and institutions favor credentials. Individuals who have talent are very different and hopefully will go much further in current market.
MANPADS is for shooting down aircraft ("ADS" = air defense system). You're thinking of the Javelin and NLAW anti-tank weapons. Anti-tank rockets have been around for many decades; they're nothing new, but the latest ones are just more effective and have better range. IIRC, the Javelin itself was designed and first deployed back in the 1990s, so it's not exactly new either. What's new in the Ukraine conflict is that Russians apparently don't know how to (or just can't) properly operate tank battalions.
Back to MANPADS: man-portable anti-aircraft weapons aren't new either. The US was giving Stingers to the Mujahideen in Afghanistan back in the 1980s to shoot down Soviet aircraft.
Having been on both sides of the table, credentials are shortcuts for expected minimum knowledge base for technical understanding.
One should likely never use credentialing to substitute or proxy as a marker for creativity or capacity. Credentials only show a snapshot of knowledgebase at a specific point in time.
When I was a kid my dad said "companies won't think twice about dumping you, don't worry about dumping them."
But he worked in the same place for forty years. Sometimes he was treated well, sometimes he wasn't.
It occurs to me what a relic that world is but also how it sounded bizarre when my dad said that to me in the early 00s. At that time there were still "lifers" all over that place. Or people who spent 10-20 years working up in the same company.
That's all gone now. Everything is more ephemeral, more disposable. I'm not sure if it's a good thing but I'm pretty sure signing up to be a "company man" wasn't, either.
Both parties should see the relationship as bi-directional and symbiotic. Sometimes you have to find a different symbiotic relationship after the one you have has run its course.
It does not need to be interpreted as adversarial where you want to get as much out of them as you can for as little effort as possible and neither should they see it as an opportunity to suck the employee dry. It only works while your goals align with the company's goals.
There should be a mutual understanding --a meeting of the minds. I give you this for that. But, yes, ultimately, the company is not your friend. HR is definitely not your fiend. You should have friends outside the company. At work you have colleagues and co-workers. It's not to say you cannot cultivate friendships at work that last beyond your time there, but don't presume it to be your source of friends.
>Somehow at some point, in what perhaps could be blamed on the ever-hated mass produced MBAs - companies got really comfortable with the “it’s not personal, it’s just good business” of letting go of their employees for a slightest reason, or sometimes for no reason at all - just to make it look to their investors like they got their shit together.
Financial services (banks, investment firms, etc.) have been doing this for decades. It might feel revolutionary to a comfortable recent tech company existence, but I'm afraid to say this is the norm. Companies can hire quickly when they think they'll grow, and fire en masse when the tide turns.
There is an interesting exchange in Bourdains "Parts Unknown" [1] that he did in Montana where he's talking to a former labor leader and politician from Butte where he says "the company is a son of a bitch, but they were our son of a bitch" (very much worth watching the entire show, but in particular the Butte segment). I grew up in a union family and that held true of the union as well. Something changed in my lifetime (I'm 40 years old) and I really do think it was NAFTA and free trade in general, but also it was the US reaching a terminal state of resource extraction, or at least the level of resource extraction we were willing to tolerate. The two of these weakened unions and worker solidarity and slowed the profit momentum that we had become accustom to and gave carte blanche to corporations to seek local profits in remote places. I think this fundamentally changed the dynamic of being a worker across all industries and, as you allude to, the focus on organizational optimization (coupled with quarterly earnings focused business culture) only heightened the alienation of workers and now the chicken is coming home to roost for the entire American project. Aside from deindustrialization and optimization, I think much of this can be laid at the foot of the stock market and our collective fixation on it as a barometer for societal success.
In the 90's the Democratic party abandoned the labor movement because they thought they could get more votes from moderate republicans if they spew the same free market and free trade ideology. And Clinton did that and won, so since then there's been a cohort of political leaders on the left that firmly believe that this is the right and correct path. Literally the same people, they've been in power for 30-40 years. What they miscalculated was that Clinton won the presidency because of his insane charisma and also the Ross Perot spoiler on the right, not the free market stuff. But it was enough cover to dismantle the long-term alliance of the labor movement and the Democratic party.
I have an MBA and I actually agree. I currently only have some anecdata to back it up ( most of my younger coworkers have a more combative if not ronin-like approach to employers ). Personally, I get it. I had company decide to close doors in our state and I was forced to looks elsewhere, but the management there did make a difference ( acceptable severance based on seniority, help with finding new jobs and so on ) and certainly did see some uncool behavior in my career.
That said, I had some minor hopes for the current post-Covid world, because it, however briefly, looked like employees understood what standing together meant and that WFH is something that can easily be done in some positions ( and is artificially dosed as a reward to special ones ).
For better or worse, the coming recession will confirm whether I had hoped for too much.
FWIW, I am staying mostly remote ( as is most of my team now ). I already told no HR once. I am getting more and more comfortable daily with more otherwise uncomfortable situations despite clearly changing winds and better corporate propaganda ( they did learn from initial fiascos ).
Or...the strongest survive. Amazon being one of the strongest, obviously. That is, and MBAs thinking longer term would know, it's not a downturn. It's opportunity. Opportunity to come out the otherside even strong.
Jeff is saying "save your money." Amazon is saying "we're cutting." It's self-fulfilling. And once it's over Amazon rein will be even further solidified.
> We are seeing a bit of a market downturn - but it hasn’t hit Amazon pocketbook now, has it? Are they in danger of running out of money?
That's not the logic we should expect from companies in a competitive market economy. Companies that think like that will eventually pile up so many bad decisions that they will fail -- and then everyone gets laid off!
> We are seeing a bit of a market downturn - but it hasn’t hit Amazon pocketbook now, has it? Are they in danger of running out of money? What happened to “people are our most important resource”?
People are an important resource, certainly for a company like Amazon, and probably the most expensive too. But I don't understand the argument -- you don't just throw money around like that on any other resource.
Certainly up until this year it was a seller's market in tech and I saw a lot of movement to chase bigger salaries (which is fine and people should try to get what they want while the getting's good).
> And this brings me to my main point - I think years of this has had an unexpected side-effect the companies never signed up for: people started treating companies they way companies treating people and we are starting to see the results - quiet quitting, oft bemoaned lack of loyalty, job hopping, etc. Now I am not saying it’s all new, but at least in my observation it’s peaking now and my thesis is these things are connected.
I'm not sure it is, and I'm not sure if you can assign the "blame" (if there is any) to one side.
I think as I said the workers have had a red hot run for quite a few years and it was those peaking conditions that drove the peak in their dissatisfaction. Conditions are going the other way now and people will try to hold their jobs a bit more I expect.
And what started the trend from people being lifetime company men to almost no loyalty? I doubt the ruling class one day got together and decided they'd stop treating workers well. It's surely a lot of factors on all sides. People have far more generational wealth including the investment in education, than in the early 1900s, and there are at least some social safety nets, so job loss might be considered less risky. It has become increasingly easier to advertise, search, apply, recruit for jobs outside the local region with telephone, fax, then internet, email.
I'm not sure what you'd prefer. Certainly people shouldn't be tied down to companies. Should corporations be made to keep people on long after they're costing more than they're producing? When you look at government and places with undue union power (police comes to mind), you get a lot of incompetence, corruption, and just poor organizations where crap floats to the top and they could never compete without enforced monopolies. Unfortunately it never turns places into egalitarian utopias.
Honestly I think it has a lot to do with a hot market, at least to this point. You get a lot more pliant if you don’t think you can find another job easily (one reason why some tech executives don’t actually mind this downturn too much even though it costs them money).
What message does that send to the employees who stick it out who are expected to "give a part of their lives" for the company? Sacrifice, go the extra mile, "what can you do for the company versus what can the company do for you"?
No problem hiring and firing. Hiring for no reason. Setting a random employee growth target and then hiring to that level to only then fire the same amount of people a couple of years later. It is irresponsible growth targets followed by irresponsible cut backs.
Bro Ive been on some "business is business, it's strictly financial..." energy with employers since day zero. I pity the fool that never took a financial relationship for anything more than what it is.
I’ve worked professionally since 1996. There has never been a day in my professional career that I thought of any job as any more than a means to support my addiction to food and shelter
> it hasn’t hit Amazon pocketbook now, has it? Are they in danger of running out of money? What happened to “people are our most important resource”?
Amazon just had to take out an $8B unsecured loan to be paid back in a year to cover operating and capital expenses. Despite what the government is telling you, things are really bad and about to get a lot worse. The lowest hanging fruit/the least valuable employees get cut first. That's how they stay in business. That's the smart business move unless they can pivot.
Companies can't just borrow and spend anymore they actually have to be sustainable. Amazon gets loans to buy inventory and equipment and pay employees so they can stock their warehouse and then they pay back those loans later after it's sold. If they don't sell that inventory because consumers have no money they still have to make loan payments so it becomes more costly to them over time and if they want to break even they have to raise prices. This is inflation.
The Fed raising interest rates makes borrowing money to do this more expensive so they don't do it or do it less. Money in the economy evaporated in November 2021 with the announcement of Quantitative Tightening and the end of Quantitative Easing. That means getting loans and free money became expensive and private investment in the markets/companies evaporated. This forces inflation to come down because they can't keep borrowing and inflating. They have to stock just what they can easily sell or they find themselves imploding as they can't pay back their loans. Pretty much every industry is going through this, hence all the industries collapsing. You will see a lot of companies that have been struggling go out of business.
Why is this happening? Free money basically. Our government pandered to political interests (voters and cronies) and overspent for decades, kicking the can down the road and we're now at the end of the road.
The US debt to GDP ratio has been over 120% since 2020 which by IMF definition is an economic death spiral. That means the US is underwater, we don't produce enough money as a nation to pay our bills. By 2028 that death spiral will become irreversible, meaning the payments we make on our loans for all that free money --the bailout money, stimulus checks, the entitlements, that omnibus, the inflation reduction act-- will only go to the interest and no longer the principal. That sets us on track to be insolvent by 2042.
Yeah I know, crazy right? But why? Because when this happens all those companies and private investors that poured money into stocks and venture capital can't rely on them for profits so they instead buy government bonds. They don't give as high of a return but it's guaranteed money in a down economy so they do it. The result is the governmnet receives the money they need to pay their bills and all the those living off free money get a reality check and have to live and operate within their means.
And balance is restored to the universe. Unless people try to cash out their bonds and find the government is bankrupt. This is why government spending is bad folks. They manipulate the economy to prop it up and print money until the Ponzi scheme fails. Rinse and repeat or pass a balanced budget amendment and demand our government stop spending money on pointless wars and entitlements that buy them votes or kickbacks. As long as there is government debt, as long as the government exists, the cycle will repeat. We'll just have to wait and see if we survive this time. Where we are at the end of the road is unprecedented. This has been building since we got off the gold standard which is what allowed them to overspend money we don't have.
Historically this is when there's a world war or a collapse of civilization/Dark Age because most nations are in the same boat. Decadence gets the better of us and lack of restraint (dare I say, conservative behavior) leads to this moment in history once more.
Obviously there's more nuance to it than just that, but that's a concise rough summary of what's going on.
This is the story that will be told to support austerity which will be used by a small cohort to accumulate even more wealth at the expense of everyone else and cause a generation of misery. What this story misses is that the government controls the money. The US Government can't go "bankrupt," it is the bank. The US Government doesn't have to "live within their means" - it is the means. The US Government can't "overspend money [they] don't have," because it has all the money, and the money printer. Sovereign nation 'debt' doesn't work like any other debt, and it's so incredibly useful on it's own that it makes sense to make a lot of it. This idea that the US Government has to pay back its debt is a fiction that has no utility any more.[1]
I will agree with you that most military spending is inefficient at best, and that we should shift our focus and values to something more productive rather than something literally destructive.
For me I've decided to avoid US companies as much as I can.
It does not help our societies to facilitate the siphoning of our local wealth to enrich foreign companies. Especially ones that have such disregard for their own, imagine their view of the rest of us.
> but it hasn’t hit Amazon pocketbook now, has it? Are they in danger of running out of money?
Stock price crashed. This effects the bonuses/equity of a bunch of employees, some of whom are on the executive levels. Cutting on employment is a very effective method to raise profits and help the stock price. It sucks but that's what the market (investors) like. This is just capitalism ...we've all signed up for this (I guess?).
> We are seeing a bit of a market downturn - but it hasn’t hit Amazon pocketbook now, has it?
Um, yes?
Honestly, I'm not sure how one could sincerely make this statement.
Amazon's net income for Q3 '22 is roughly a third of its net income Q4 '21. If losing 2/3rds of your revenue isn't considered hitting the pocketbook, I don't want is.
Now you could yada yada yada they're still profitable, but that's a different argument.
Amazon was seeing 20-30% growth of its revenue. Their expenses were also growing at a similar base. Now that top line revenue isn't there, they need to address how to address bottom line growth.
Or maybe the MBA graduates are just fixing the sinking ship that engineering teams created with over-promising technology and demanding growth for their teams so that they could get bigger budgets: VR, meal delivery, AI, etc. ?
I have an MBA man I wish I was one of these master of the universes deciding to hire and fire 17,000 people at a company. Do you need the Stanford MBA, Harvard, Wharton? Does Berkeley suffice these days or do you still need the private Ivy League degree first?
I just wanted to point out that probably 2000 of us (in robotics/AI) were "laid off" in Q4, but were paid through the end of the calendar year "To find an internal position". Almost none did, and I don't think that was really the intent, but what do I know. They're in this batch. I expect a Q2 announcement of all those people who in Q1 were "transitioning to new positions" that were eliminated before they could move.
Back in the day they managed to avoid 'layoffs' by transferring thousands of people from Fire Phone -> Alexa. They somehow avoided layoffs from shutting down Prime Air (drones, not 767s), even though that had a lot of employees.
They're pretty good at getting people to leave without doing 'layoffs'.
Heck, if you believe that they've always had 5-10% 'unregretted attrition' targets, which I do, and apply it to the whole company, that's 50-100k employees per year!
> Heck, if you believe that they've always had 5-10% 'unregretted attrition' targets, which I do, and apply it to the whole company, that's 50-100k employees per year!
This came up last time the Amazon layoffs were on HN, but: the URA target (which was 2-6% when I was there) is for people, not positions. That is, the intent is that departments are continually removing their worst performers, but replacing those people as soon as possible. This is an elimination of 17,000 positions who will not be backfilled.
Whether you agree with the URA target approach or not (I suspect most do not), 6% URA is fundamentally different from 6% layoffs.
Why do you believe Prime Air is shut down, when it just started making actual drone deliveries to customers in College Station TX, and Lockeford, CA [1]?
This is worrisome - joined Amazon ~4 months ago because it seemed like the most sensible thing to do considering my immigration status. Have one last attempt left at the H-1B lottery; PERM is underway but no hopes of getting it finished before STEM OPT runs out. Was thinking of getting married to my girlfriend soon, but not too sure about that anymore (she's in the 3rd year of her PhD so she cannot really move with me) if I'm going to get axed considering the job market isn't the best either. Not hyped about the prospect of moving to my home country since I have not lived there since I was 9. F*k, life just hasn't been kind these last couple years.
US doesn’t give out a permanent residency based on how long you lived in the country. There’s only a few common paths to immigration: employment sponsored (2-20 years), marriage based (1-3 years), other family based (2-20 years), investor based (1-3 years). Student or tourist years don’t matter.
I have interviewed with Amazon several times. Every time I don’t make it through because I realized the people in many of the roles were (a) not the best people (b) I seemed to know way more than many of them about their domain (c) they kept trying to offer me horizontal transfer (d) they wanted to pay me less than I know I am worth.
My impression is Amazon is a factory tuned to hire and churn a sort of middle of the road white collar worker with no creativity who can sort of plug into some pre designed module and churn away and be yelled at to “go faster.”
Some of the people I met at Amazon we’re ultra talented but all the ones I ever interviewed with seemed like total morons.
I never understood why. Maybe I just interviewed with the wrong teams
There are brilliant devs at Amazon. There are poor devs at Amazon. The quality of the dev has very little bearing on promotion and hiring from what I can tell. Story telling and document writing appear to be the only things that are graded on a scale, everything else is pass/fail.
I haven't worked there, but I got the impression going back decades that Amazon is a terrible place to work. That said, I have a friend who worked there and had really only positive things to say. And he quit the valley startup where we both worked when things became rocky there, and went back to a different job at Amazon. So YMMV it seems.
>I haven't worked there, but I got the impression going back decades that Amazon is a terrible place to work. That said, I have a friend who worked there and had really only positive things to say.
I've heard the same thing about them. I think it's a place where certain kinds of people like to work, for a while, because it pays well and looks great on a resume, and they don't mind working long hours to do that kind of work and earn that kind of pay. But it's not for everyone.
I applied to Amazon several years ago before I started my own company. I got to the final round of interviews and I cannot express how almost every single person I interviewed with that day (8 fucking interviews in a single day, in person) seemed to not give a shit about what I was saying. It was a draining process and by the end I just wanted to leave. I didn’t get an offer.
So you didn’t make it through the interview because the interviewers are idiots? Not everyone at Amazon is an amazing dev but I can assure you Amazon isn’t the largest cloud provider because it’s stocked full of idiots.
Yesterday Jan 3, Amazon borrowed another $8B at 0.75% plus SOFR (which is basically Fed Funds rate at ~4.3%) through a short term credit facility.
Also, Amazon has ~$69B in long term lease liabilities. That’s about ~3x the combined long term lease liabilities of Walmart and Costco (~$20B combined). Walmart and Costco are the world’s #1 and #3 retailer, Amazon being #2.
From the beginning when Jassy took the job, the problem has always been the cost of the excess warehouse capacity. Once they realized the true demand from this holiday season, they can now rightsize capacity for 2024 and beyond. Until then, they need to tighten the belt. Just like if you realized you swallowed a bigger mortgage than you can handle.
“The last issue relates to our fixed cost leverage. Despite still seeing strong customer demand and expansion of our FBA business, we currently have excess capacity in our fulfillment and transportation network. Capacity decisions are made years in advance, and we made conscious decisions in 2020 and early 2021 to not let space be a constraint on our business.”
>Also, Amazon has ~$69B in long term lease liabilities. That’s about ~3x the combined long term lease liabilities of Walmart and Costco (~$20B combined). Walmart and Costco are the world’s #1 and #3 retailer, Amazon being #2.
Long term lease liabilities are next to meaningless for any kind of analysis because it's the sum of rent due at any point after the next 12 months. Could be at the 13th month. Could be at the 13th year. I am not an accountant but I believe you could sign a 50 year lease at $1m/year, that can be terminated at any time by paying a $1m penalty, and it would still show up as a $49m long term "liability".
"Amazon's income dipped toward the end of 2022 as the economy took its toll. The tech giant spent billions doubling the size of its fulfillment network during the pandemic, a play that served it well initially but that proved to be short-sighted.
Amazon was forced to shut down or delay plans for over a dozen facilities as e-commerce sales last year grew slower than expected. Another headwind - soaring energy prices - impacted Amazon's business in a major way, with the company's spending on shipping climbing 10% to $19.9 billion in Q3 2022.
To cut costs, Amazon plans to reduce its workforce in early 2023, reportedly by as much as 10,000 employees."
"In October, Amazon disappointed Wall Street with a holiday season forecast that woefully missed analysts' expectations. The company's stock fell about 50% last year.
Like Jassy, a number of other tech founders and CEOs have since admitted they failed to accurately gauge pandemic demand."
May 15, 2021 - "The question, in view of these results, is what kind of world we are heading for after the pandemic. The company's vision points to a major consolidation of e-commerce as we adopt new habits brought about by the pandemic, to the point of becoming a trillion-dollar industry in the United States."
August 24, 2020 - "The questions that IBM's report aims to answer is how much of this pandemic-fueled online spending is a temporary shift and to what extent is it impacting longer-term forecasts? The answer, at least in this estimate, is that this pandemic pushed the industry ahead by around five years. The shift away from physical stores was already underway, but we've now jumped ahead in time as to where we would be if a health crisis had not occurred."
It's fair that you edited out the confused commentary, but I'll leave this note that cash is an immediate/near-term asset and long-term debt is a long-term liability. Duration mismatch is important for a company that attempts to maximize free cash-flow.
Yes, but the stock price is based on using that money efficiently, and building an engine which can (at least if desired) generate profits. And when 50% of corporate employee comp is RSUs... a stock price collapse is a huge pay cut for the rest of your workforce.
Is it good to give 100% of your corporate employees a 25% pay cut, to avoid 5-10% layoffs? I think that's a less clear-cut value call.
In October, after mentioning to the neighbor plumber friend that massive tech layoffs would be arriving just in time for Christmas, he told me that he did not really care what happens to tech workers because "people will always need a good plumber."
Tonight, same plumber friend told me that his company's workflow has gone from ~50 hrs/wk to 30hrs/wk — and that includes "organizing the company truck." He now understands why everybody should care about (even unrelated-) industry-wide layoffs.
I live on one of Chattanooga's wealthier mountaintops; most of my neighbors are retired small business owners. Any neighbors my age [late 30s] are WFH techies.
I myself rent (because of a unique arrangement) for about half of what a mortgage would be. There are a few crappier houses up here, with a few blue collars left (I am a trained electrician, IBEW).
Back in 2008, a woman I was dating worked for a subsidiary of
PepsiCo and was laid off by Indra Nooyi's decision to create
"financial breathing room" in response to the economic storm
clouds that were gathering.
The Financial Times described it as "just 1.7% of the group's
global workforce."
Meh. 1.7%
Because of the economic collapse of 2008-2009, she didn't
find another position for well over a year and a half, damn
near lost her home, and had to draw very deep from the well.
Nooyi's characterization has stayed with me ever since as
a metaphor for just how cold the wind blows in those meetings.
The funny thing is like 8 months ago amazon was hiring engineers with 4 years of experience for 350-400k. These people aren’t even good programmers. And now they need to cut.
You can make it to L5/6 without being a good engineer. I interviewed several Uber/Amazon engineers and they couldn't solve a simple problem (very easy problem that most bootcamp grads could do).
A lot of them get there by being interviewed by other bad engineers, and just float when the market is strong, or use politics to get in a good position.
A guy at my company just merges library upgrade PRs blindly. That's all he does. He fought getting dependabot up on Github, but he finally conceded. He hasn't done a commit since. I've reported it to management, but I was told it wasn't our team's responsibility.
There are tons of dark corners to hide in at big companies.
They just solve a few leetcode problems. The company is constantly failing to launch good tech due to technical debt and lack of ability of the engineers
Readit News
Somehow at some point, in what perhaps could be blamed on the ever-hated mass produced MBAs - companies got really comfortable with the “it’s not personal, it’s just good business” of letting go of their employees for a slightest reason, or sometimes for no reason at all - just to make it look to their investors like they got their shit together.
We are seeing a bit of a market downturn - but it hasn’t hit Amazon pocketbook now, has it? Are they in danger of running out of money? What happened to “people are our most important resource”?
And this brings me to my main point - I think years of this has had an unexpected side-effect the companies never signed up for: people started treating companies they way companies treating people and we are starting to see the results - quiet quitting, oft bemoaned lack of loyalty, job hopping, etc. Now I am not saying it’s all new, but at least in my observation it’s peaking now and my thesis is these things are connected.
~10 years ago, when I got my first job, I was in the minority, pretty much the only person cynical about big companies' claims how "people are our most important resource", how important is the company "culture" and all of that corporate kumbaya. And, at that point, the vast majority of people around me cared and wanted to do a good job, going up and beyond.
Fast forward to now, and pretty much everyone has the attitude of "f**k these guys", doesn't want to be there and will do the bare minimum to get by. And that's exactly what companies have demonstrated that they deserve.
People are tired of job hopping to get market pay, dealing with bulls**t, and being thrown under the bus at the slightest hint of an economic downturn.
Point being, I don't think you were the only one who didn't love the company 10 years ago.
You tread in strange circles. I'd think a cursory look at history ought to be enough to put the lie to such claims.
And anybody with that attitude should rightfully be let go. It's mutual.
(I don't want co-workers who act like that.)
If nobody moved from job to job, there would be no market.
Tell that to Johnny Paycheck.
So it's cool for employees to quit and job hop to get better pay, leaving their former employers with the effort and expense of replacing them, but not cool for companies to lay off employees to save money when markets contract?
as per levels.fyi Senior Principal SDE at Amazon makes about a million $$$. Entry level salary is $168K
https://www.levels.fyi/companies/amazon/salaries/software-en...
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This doesn't mean that it's all downside for employees though. Amazon grew a huge business and paid their corporate employees top of market with huge upside over the last 20 years due to their phenomenal growth. It was a very good deal for those who worked in Amazon corporate over the last 20 years—a lot of people got richer than their parents ever could have gotten in the previous generation of more stable corporate jobs.
But make no mistake, Amazon is not a magic pot of gold, they still have a P&L like any other company. 17,000 employees are not cheap. Amazon grew from 800k employess to 1.3m and then 1.6m at the end of 2019, 2020 and 2021 in response to the pandemic. It is to be expected that their forecasts were not completely accurate in light of the generational event and tech sea change that the pandemic brought. The fact that people are scandalized by this is indicative of how insane the 12-year bull run for tech really was.
Amazon's quarterly reports have all been good so far (Q3 2022 is the latest). Sales are up 15% YoY, and they are profitable.
Companies plan for where the market is going, not last quarter’s results. It’s fully clear to everyone that the economy has shifted dramatically. They are adjusting as appropriate.
Also, these people will be laid off with severance. They were compensated toward the top of market (considering all tech companies) while they were employed. They have Amazon on their resume, which makes future job easier than average. I’m really not concerned about laid off (with severance) FAANG employees relative to the people earning literally 1/10th their comp who are losing jobs without severance.
> people started treating companies they way companies treating people and we are starting to see the results - quiet quitting, oft bemoaned lack of loyalty, job hopping, etc.
I really don’t think this is an appropriate comparison. The whole “quiet quitting” thing isn’t going to hurt companies like Amazon because they’ll just PIP the person out and replace them with the tens of thousands of qualified people wanting to get hired at Amazon and do good work. When some “quiet quits” it’s usually their peers who pay the price because the absentee coworker isn’t get their part of the team project done. Makes more work for everyone else, makes groups projects late, and potentially brings down performance reviews of people depending on their work to get their own work done. It’s not fair to write “quiet quitting” off as only affecting the company, because the company is going to be fine. It’s the coworkers who bear the brunt.
(Source: Had some “quiet quit” team members over my career, suffered greatly during those times)
Yea but no. This isn’t about Amazon, it’s about business culture writ large. Also not everyone at Amazon is a software engineer, and therefore it paid crazy amounts.
> When some “quiet quits” it’s usually their peers who pay the price because the absentee coworker isn’t get their part of the team project done
Quiet quitting is simply doing your job but not being a “try-hard” and not trying to get ahead or go above-and-beyond. It’s a lack of loyalty and treating your job as a trade of exactly 8hrs with a paycheck. If your coworker wasn’t doing their work, they didn’t quiet quit.
> It’s the coworkers who bear the brunt.
Sounds like a manager (company) treating workers poorly. If a factory had people quit and expected everyone else work extra hours, it’d be a labor violation. If they’re doing that to knowledge workers we say it’s laziness?
Conversely, if you had a coworker who worked 8 hours a day, did their job, and didn’t try to give extra, you shouldn’t fall behind unless management had exploitative expectations.
(Source: I have a soul and work. Managers tried to make me suffer greatly at times).
As an aside, it doesn't really make sense to quiet quit as a SWE for the sole reason of there still a ton of career upside for those who do good work[1]. If you're thinking of quiet quitting you probably just need a better employer.
[1] "Good work" as in people who actually get stuff done and produce good software, not those who merely just grind long hours to impress founders.
Sounds like those folks are doing much less than required not to be fired.
My understanding of "quiet quitting" was
a) it's a stupid term made up to give people a sense that they're in control of something they're not - needing to work to survive and;
b) you were explicitly not trying to climb any ladder and merely doing your job as it was described, not shooting for promotions or accolades of any kind.
"Quiet quit" team members are 100% fine to have around IMO, as long as they stay out of the way of the folks trying to take on the larger/harder problems. That's the thing I reject about modern workplaces: this idea that everyone has to be "progressing" or "climbing" all the time.
It's totally cool to punch in/punch out 9-5, it just needs to be clear that's what the role is, and how much that reduces your ability to determine what it is you work on during those hours.
It goes both ways. If you planned so poorly and hired so fast that a minor perturbation in the market causes you to fire 17,000 people, you're still communicating that you putting profits above people.
Yet all of these companies overhired, which led to the current problem.
> It’s fully clear to everyone that the economy has shifted dramatically.
I don't think that's fully clear.
the parent comment talks about "these companies". what happens when less prominent companies take a cue from fangs and start booting people out, only with crappier severance and crappier resumes? this is far from the last layoff.
Quiet quitting are people doing their job. If you suffered, it's because you were expecting slave labor.
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resumes.LastOrDefault();
Have we been in a bubble so long that people have forgotten that the raison d'etre for publicly traded companies existing is not to simply exist, but rather make profit and ideally continually expanding profit for share holders?
For a startup runway and growth of whatever nature are all that matter. You need to exist long enough for the exit event, and grow in a way that makes this more possible. If you have a two year runway, you have two more years to win your investors back their money and more. But this is not true for publicly traded companies. Simply surviving or, even worse, slowly burning reserves is not enough.
I know so many post-IPO startup employees that dismiss layoffs because "the company has tons of cash!"
Do you invest in a company because you think it won't go out of business for a decade? No you invest because their profit margins are healthy and you think they'll continue to grow in a sustainable, net revenue positive way.
I still remember the dotcom bubble, which was much shorter than what we've been in, and the public debate among investors was about the "new economy" and claims that "things are different now". However those old fuddy-duddies that kept arguing that companies need to make more than they spend were proven right in just a few years.
Today I see CEOs and executive leadership at companies genuinely surprised that they're being asked to prove that they can be profitable. I see generations of tech workers sincerely confused about the very idea of what it means to run a successful business.
Amazon is doing massive layoffs because they need to show investors that the know how to create value, and become more profitable. At least Amazon has shown periodically that they can make profit. There are plenty of post-IPO startups that have never proven that they are even capable of not running at a loss.
Should be noted the ideology that the purpose of a corporation is to maximize the profits for shareholder above all else is a modern obsession, and always takes a short term view. Starving a company just for a few good years of share prices is is dumb but often what that ideology leads to. Making profit is part or what a corporation should do, maximizing it above all else is not.
Similarly HOAs are supposed to maximize house value but funny how some of the highest property values are places like Palo Alto that aren’t known for HOAs.
Europe, which makes it very hard to let an employee go, tends to have significantly higher unemployment than the US, which is much more cavalier about layoffs. My 2c.
You can get rid of 20 people for next monday if you want to, you’ll just pay the due amount as defined in the contract and the law. It’s also not some astronomical amount, worst case scenario I think it’s around 6 months of pay, which isn’t that far from what you’d pay for a non compete for instance.
PS: also unemployment is a complicated figure, it’s hard to tell how much any specific variable impacts it. Unemployment rate goes up and down while laws stay mostly the same, so singling out labor laws is mostly an opinion at this point.
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EDIT: Guess I didn't do my research about paid skills...
[1] https://arstechnica.com/gadgets/2022/11/amazon-alexa-is-a-co...
Knowing Amazon, they probably needed people to handle the holiday stress, and now they’re laying off more people.
1. Sell millions of devices at cost. Unrelenting sales on Echo devices
2. ???
3. Profit
And Step 2 was never filled in. Maybe it was "if people can re-order paper towels by shouting at Alexa, we'll sell more paper towels". But that plan has its limits.
Did you ever believe it?
It makes me throw up every time I see corporate messages speaking of family and employees being their most important resource.
I have been around for long enough and I have learned that a job is just a contract between parties and it exists for as long as both parties can benefit from it.
Don't get caught up in the whole companies family kind of bs or get too emotionally and culturally attached to your employer. Always be on the look up for opportunities and take them.
Never stop learning and investing in yourself. Knowledge and experience are your most important asset, keep nurturing them.
Also, I wanted to believe that a good chunk of these layoffs should have seen this coming. One must be aware at all time of how valuable (if at all) are for their employer.
Relevant joke:
An engineer is messaging with her boss on Slack after hours. The boss is talking about how his brother is in the hospital.
The engineer asks "What are you gonna do?" and the boss responds "Well, he is family..."
The engineer says "You're gonna make him come in on weekends?!"
These periods don't last too long: Technologies are tried but discarded, or are too easy to reproduce and lead to saturation, or competition reaches fierce levels etc.
In "stable" or lean times the corporate structure becomes a ruthless spreadsheet optimisation exercise that focuses on exploiting every possible arbitrage (e.g., tax regimes, employee loyalty, overseas labor cost differences etc) to maintain the monetary profitability projections. This leads to endless corporate restructurings, financial engineering and other zero or negative sum games.
The lifecycle of a human being, the social and emotional needs to belong, contribute, feel appreciated and helpful, to create value when young and able, in order to receive value when old and frail. These things are not part of the corporate structure contracts. Neither is in any sense a sustainable planet (but thats part of another rant).
Something about this cycle and these cuts feels I dunno, manufacturered or something. Like are 7k high paying jobs at a salesforce indicative of an economy collapsing while the overall labor market is still extremely tight and you’re not hearing about similar layoffs throughout all industries?
All of these cuts seem to be follow the leader because we’re worried and I would not be that surprised to see the reality in the overall economy be much better than feared and these same companies hiring again before year end. It probably doesn’t hurt from the c level perspective that Wall Street tends to welcome job cuts at least in the short term. Although it can certainly do lasting damage to morale within a company.
I'm not sure if this is the way a company thinks, even if they wouldn't have pressure from investors or worries for future survival (they would, BTW). Instead, some companies, likely Amazon too, view such cut as necessity for two reasons: bloated organizations slow everyone down, while diluting the company's culture; it's a great chance to trim the low performers. Not saying this is good or bad, just trying to explain the underlying logic.
> people started treating companies they way companies treating people and we are starting to see the results
Reid Hoffman wrote a book, The Alliance, which advocates that employees and companies are not family, but for an alliance. When they both have the right goal, they work towards the goal. When they don't, they part ways. Similarly, Netflix's Reed Hastings advocated that companies are like professional sports teams. A professional sports team is brutal when it comes to trading its players, but it does not mean the players will not pull their weights. I personally think the two views are more realistic and help employees advance their careers.
I think we need more unions, more automation, and more social security. We are racing towards a future where there simply won’t be enough “jobs” for everyone and the companies sure as heck aren’t going to look out. Companies have no soul and the humans that run them have worked hard to insulate themselves from that being responsible for the actions of that lack of soul they instilled.
They got it wrong and overhired. There's ample evidence of that, and of cooling demand - now and in the future.
We are seeing a massive return to the old normal, which means people are going back to offices (not WFH) people are going back to shopping in person not online, people are going back to eating in restaurants not using Grub Hub or ordering online. etc etc etc
Pretending that there is some value to "loyalty" in a vendor/customer relationship is silly, and only hurts you.
Job hopping is a good thing for price discovery, and keeps wages for skilled workers going up as inflation eats away at them. Layoffs in downturns are an expected consequence of workers getting more expensive (ie capturing more of their economic value in their paychecks).
Maybe. But not when Healthcare is on the line. That part still need to be fixed.
I liken it to how MANPADS allow individual soldiers to overpower tanks for far cheaper, flipping the script on 100 years of war.
It hasn’t fully come to pass yet but corporations hire way too many “credential dead weight.”
In my career I have often been completely outraged at how bad credentialed people are in the pure talent department. Some of the most credentialed people who automatically get top roles really are not that smart versus some of the other people I know.
Corporations and institutions favor credentials. Individuals who have talent are very different and hopefully will go much further in current market.
Back to MANPADS: man-portable anti-aircraft weapons aren't new either. The US was giving Stingers to the Mujahideen in Afghanistan back in the 1980s to shoot down Soviet aircraft.
One should likely never use credentialing to substitute or proxy as a marker for creativity or capacity. Credentials only show a snapshot of knowledgebase at a specific point in time.
When I was a kid my dad said "companies won't think twice about dumping you, don't worry about dumping them."
But he worked in the same place for forty years. Sometimes he was treated well, sometimes he wasn't.
It occurs to me what a relic that world is but also how it sounded bizarre when my dad said that to me in the early 00s. At that time there were still "lifers" all over that place. Or people who spent 10-20 years working up in the same company.
That's all gone now. Everything is more ephemeral, more disposable. I'm not sure if it's a good thing but I'm pretty sure signing up to be a "company man" wasn't, either.
It does not need to be interpreted as adversarial where you want to get as much out of them as you can for as little effort as possible and neither should they see it as an opportunity to suck the employee dry. It only works while your goals align with the company's goals.
There should be a mutual understanding --a meeting of the minds. I give you this for that. But, yes, ultimately, the company is not your friend. HR is definitely not your fiend. You should have friends outside the company. At work you have colleagues and co-workers. It's not to say you cannot cultivate friendships at work that last beyond your time there, but don't presume it to be your source of friends.
Financial services (banks, investment firms, etc.) have been doing this for decades. It might feel revolutionary to a comfortable recent tech company existence, but I'm afraid to say this is the norm. Companies can hire quickly when they think they'll grow, and fire en masse when the tide turns.
1. go out for a walk. Offer the first good looking man a CEO-ship of your new company.
2. pay him $$$$$
3. hire loads of people
4. fire them all
5. goto 3
[1] https://youtu.be/KU7mda-4KwQ?t=1232
That said, I had some minor hopes for the current post-Covid world, because it, however briefly, looked like employees understood what standing together meant and that WFH is something that can easily be done in some positions ( and is artificially dosed as a reward to special ones ).
For better or worse, the coming recession will confirm whether I had hoped for too much.
FWIW, I am staying mostly remote ( as is most of my team now ). I already told no HR once. I am getting more and more comfortable daily with more otherwise uncomfortable situations despite clearly changing winds and better corporate propaganda ( they did learn from initial fiascos ).
Jeff is saying "save your money." Amazon is saying "we're cutting." It's self-fulfilling. And once it's over Amazon rein will be even further solidified.
That's not the logic we should expect from companies in a competitive market economy. Companies that think like that will eventually pile up so many bad decisions that they will fail -- and then everyone gets laid off!
People are an important resource, certainly for a company like Amazon, and probably the most expensive too. But I don't understand the argument -- you don't just throw money around like that on any other resource.
Certainly up until this year it was a seller's market in tech and I saw a lot of movement to chase bigger salaries (which is fine and people should try to get what they want while the getting's good).
> And this brings me to my main point - I think years of this has had an unexpected side-effect the companies never signed up for: people started treating companies they way companies treating people and we are starting to see the results - quiet quitting, oft bemoaned lack of loyalty, job hopping, etc. Now I am not saying it’s all new, but at least in my observation it’s peaking now and my thesis is these things are connected.
I'm not sure it is, and I'm not sure if you can assign the "blame" (if there is any) to one side.
I think as I said the workers have had a red hot run for quite a few years and it was those peaking conditions that drove the peak in their dissatisfaction. Conditions are going the other way now and people will try to hold their jobs a bit more I expect.
And what started the trend from people being lifetime company men to almost no loyalty? I doubt the ruling class one day got together and decided they'd stop treating workers well. It's surely a lot of factors on all sides. People have far more generational wealth including the investment in education, than in the early 1900s, and there are at least some social safety nets, so job loss might be considered less risky. It has become increasingly easier to advertise, search, apply, recruit for jobs outside the local region with telephone, fax, then internet, email.
I'm not sure what you'd prefer. Certainly people shouldn't be tied down to companies. Should corporations be made to keep people on long after they're costing more than they're producing? When you look at government and places with undue union power (police comes to mind), you get a lot of incompetence, corruption, and just poor organizations where crap floats to the top and they could never compete without enforced monopolies. Unfortunately it never turns places into egalitarian utopias.
What message does that send to the employees who stick it out who are expected to "give a part of their lives" for the company? Sacrifice, go the extra mile, "what can you do for the company versus what can the company do for you"?
That is a line that is exclusively used by dishonest businesses. If people are more important than money the business will cease to exist eventually.
Amazon just had to take out an $8B unsecured loan to be paid back in a year to cover operating and capital expenses. Despite what the government is telling you, things are really bad and about to get a lot worse. The lowest hanging fruit/the least valuable employees get cut first. That's how they stay in business. That's the smart business move unless they can pivot.
Companies can't just borrow and spend anymore they actually have to be sustainable. Amazon gets loans to buy inventory and equipment and pay employees so they can stock their warehouse and then they pay back those loans later after it's sold. If they don't sell that inventory because consumers have no money they still have to make loan payments so it becomes more costly to them over time and if they want to break even they have to raise prices. This is inflation.
The Fed raising interest rates makes borrowing money to do this more expensive so they don't do it or do it less. Money in the economy evaporated in November 2021 with the announcement of Quantitative Tightening and the end of Quantitative Easing. That means getting loans and free money became expensive and private investment in the markets/companies evaporated. This forces inflation to come down because they can't keep borrowing and inflating. They have to stock just what they can easily sell or they find themselves imploding as they can't pay back their loans. Pretty much every industry is going through this, hence all the industries collapsing. You will see a lot of companies that have been struggling go out of business.
Why is this happening? Free money basically. Our government pandered to political interests (voters and cronies) and overspent for decades, kicking the can down the road and we're now at the end of the road.
The US debt to GDP ratio has been over 120% since 2020 which by IMF definition is an economic death spiral. That means the US is underwater, we don't produce enough money as a nation to pay our bills. By 2028 that death spiral will become irreversible, meaning the payments we make on our loans for all that free money --the bailout money, stimulus checks, the entitlements, that omnibus, the inflation reduction act-- will only go to the interest and no longer the principal. That sets us on track to be insolvent by 2042.
Yeah I know, crazy right? But why? Because when this happens all those companies and private investors that poured money into stocks and venture capital can't rely on them for profits so they instead buy government bonds. They don't give as high of a return but it's guaranteed money in a down economy so they do it. The result is the governmnet receives the money they need to pay their bills and all the those living off free money get a reality check and have to live and operate within their means.
And balance is restored to the universe. Unless people try to cash out their bonds and find the government is bankrupt. This is why government spending is bad folks. They manipulate the economy to prop it up and print money until the Ponzi scheme fails. Rinse and repeat or pass a balanced budget amendment and demand our government stop spending money on pointless wars and entitlements that buy them votes or kickbacks. As long as there is government debt, as long as the government exists, the cycle will repeat. We'll just have to wait and see if we survive this time. Where we are at the end of the road is unprecedented. This has been building since we got off the gold standard which is what allowed them to overspend money we don't have.
Historically this is when there's a world war or a collapse of civilization/Dark Age because most nations are in the same boat. Decadence gets the better of us and lack of restraint (dare I say, conservative behavior) leads to this moment in history once more.
Obviously there's more nuance to it than just that, but that's a concise rough summary of what's going on.
I will agree with you that most military spending is inefficient at best, and that we should shift our focus and values to something more productive rather than something literally destructive.
[1] https://en.wikipedia.org/wiki/Modern_Monetary_Theory
It does not help our societies to facilitate the siphoning of our local wealth to enrich foreign companies. Especially ones that have such disregard for their own, imagine their view of the rest of us.
Nothing. But one particular group believes that is is more "equal" than the others.
Stock price crashed. This effects the bonuses/equity of a bunch of employees, some of whom are on the executive levels. Cutting on employment is a very effective method to raise profits and help the stock price. It sucks but that's what the market (investors) like. This is just capitalism ...we've all signed up for this (I guess?).
Um, yes?
Honestly, I'm not sure how one could sincerely make this statement.
Amazon's net income for Q3 '22 is roughly a third of its net income Q4 '21. If losing 2/3rds of your revenue isn't considered hitting the pocketbook, I don't want is.
Now you could yada yada yada they're still profitable, but that's a different argument.
Amazon was seeing 20-30% growth of its revenue. Their expenses were also growing at a similar base. Now that top line revenue isn't there, they need to address how to address bottom line growth.
From: https://www.statista.com/statistics/273963/quarterly-revenue...
Note the stair-step graph. Q4 is Christmas so it's a lot higher. That's why we normally compare numbers with a year earlier.Deleted Comment
I have an MBA man I wish I was one of these master of the universes deciding to hire and fire 17,000 people at a company. Do you need the Stanford MBA, Harvard, Wharton? Does Berkeley suffice these days or do you still need the private Ivy League degree first?
Back in the day they managed to avoid 'layoffs' by transferring thousands of people from Fire Phone -> Alexa. They somehow avoided layoffs from shutting down Prime Air (drones, not 767s), even though that had a lot of employees.
They're pretty good at getting people to leave without doing 'layoffs'.
Heck, if you believe that they've always had 5-10% 'unregretted attrition' targets, which I do, and apply it to the whole company, that's 50-100k employees per year!
This came up last time the Amazon layoffs were on HN, but: the URA target (which was 2-6% when I was there) is for people, not positions. That is, the intent is that departments are continually removing their worst performers, but replacing those people as soon as possible. This is an elimination of 17,000 positions who will not be backfilled.
Whether you agree with the URA target approach or not (I suspect most do not), 6% URA is fundamentally different from 6% layoffs.
Can't post too many details, but we are actively delivering to customers in test markets today. A publically released video from a few months ago: https://www.youtube.com/watch?v=3bDyeUiWL3M&ab_channel=amazo...
Source: I'm an SDE at Prime Air.
[1]: https://arstechnica.com/gadgets/2022/12/amazon-begins-drone-...
* Age out at 21: H-4 no longer valid, green card process delayed because of country-specific quota
* F-1 student visa gives you a few more years, but still no path to residency
https://www.npr.org/2021/08/01/1023393351/documented-dreamer...
My impression is Amazon is a factory tuned to hire and churn a sort of middle of the road white collar worker with no creativity who can sort of plug into some pre designed module and churn away and be yelled at to “go faster.”
Some of the people I met at Amazon we’re ultra talented but all the ones I ever interviewed with seemed like total morons.
I never understood why. Maybe I just interviewed with the wrong teams
I've heard the same thing about them. I think it's a place where certain kinds of people like to work, for a while, because it pays well and looks great on a resume, and they don't mind working long hours to do that kind of work and earn that kind of pay. But it's not for everyone.
https://www.reuters.com/business/retail-consumer/amazon-secu...
Also, Amazon has ~$69B in long term lease liabilities. That’s about ~3x the combined long term lease liabilities of Walmart and Costco (~$20B combined). Walmart and Costco are the world’s #1 and #3 retailer, Amazon being #2.
From the beginning when Jassy took the job, the problem has always been the cost of the excess warehouse capacity. Once they realized the true demand from this holiday season, they can now rightsize capacity for 2024 and beyond. Until then, they need to tighten the belt. Just like if you realized you swallowed a bigger mortgage than you can handle.
“The last issue relates to our fixed cost leverage. Despite still seeing strong customer demand and expansion of our FBA business, we currently have excess capacity in our fulfillment and transportation network. Capacity decisions are made years in advance, and we made conscious decisions in 2020 and early 2021 to not let space be a constraint on our business.”
- Brian Olsavsky CFO Apr 28, 2022 earnings call
Long term lease liabilities are next to meaningless for any kind of analysis because it's the sum of rent due at any point after the next 12 months. Could be at the 13th month. Could be at the 13th year. I am not an accountant but I believe you could sign a 50 year lease at $1m/year, that can be terminated at any time by paying a $1m penalty, and it would still show up as a $49m long term "liability".
Amazon was forced to shut down or delay plans for over a dozen facilities as e-commerce sales last year grew slower than expected. Another headwind - soaring energy prices - impacted Amazon's business in a major way, with the company's spending on shipping climbing 10% to $19.9 billion in Q3 2022.
To cut costs, Amazon plans to reduce its workforce in early 2023, reportedly by as much as 10,000 employees."
https://techcrunch.com/2023/01/03/amazon-secures-8b-loan-ant...
"In October, Amazon disappointed Wall Street with a holiday season forecast that woefully missed analysts' expectations. The company's stock fell about 50% last year.
Like Jassy, a number of other tech founders and CEOs have since admitted they failed to accurately gauge pandemic demand."
https://www.cnn.com/2023/01/04/business/amazon-layoffs/index...
May 15, 2021 - "The question, in view of these results, is what kind of world we are heading for after the pandemic. The company's vision points to a major consolidation of e-commerce as we adopt new habits brought about by the pandemic, to the point of becoming a trillion-dollar industry in the United States."
https://www.forbes.com/sites/enriquedans/2021/05/15/amazon-r...
https://techcrunch.com/2020/08/24/covid-19-pandemic-accelera...
https://web.archive.org/web/20200824070131if_/https://www.ib...
Is it good to give 100% of your corporate employees a 25% pay cut, to avoid 5-10% layoffs? I think that's a less clear-cut value call.
Tonight, same plumber friend told me that his company's workflow has gone from ~50 hrs/wk to 30hrs/wk — and that includes "organizing the company truck." He now understands why everybody should care about (even unrelated-) industry-wide layoffs.
I myself rent (because of a unique arrangement) for about half of what a mortgage would be. There are a few crappier houses up here, with a few blue collars left (I am a trained electrician, IBEW).
The Financial Times described it as "just 1.7% of the group's global workforce."
Meh. 1.7%
Because of the economic collapse of 2008-2009, she didn't find another position for well over a year and a half, damn near lost her home, and had to draw very deep from the well.
Nooyi's characterization has stayed with me ever since as a metaphor for just how cold the wind blows in those meetings.
A lot of them get there by being interviewed by other bad engineers, and just float when the market is strong, or use politics to get in a good position.
A guy at my company just merges library upgrade PRs blindly. That's all he does. He fought getting dependabot up on Github, but he finally conceded. He hasn't done a commit since. I've reported it to management, but I was told it wasn't our team's responsibility.
There are tons of dark corners to hide in at big companies.
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