> Apple, meanwhile, was more cautious. Its headcount increased just 20% from 2020 to 2022
At Apples size this is still pretty huge. At least, I thought it was until I saw that Amazon, Meta and Salesforce basically DOUBLED in 2 years.
If this data is correct isnt that insane? How can you effectively double orgs of this size over a 2 year period? Its not like a startup with 50 people or something. I guess I was out of the loop on just how big the hiring was over the pandemic. Not that layoffs are good for employees and workers like me, but these companies must still have retained tons of the hires as RIFs in tech seem to be about 7-20%.
Growing too fast is damaging to both culture and productivity. You have a bunch of people starting that are still learning. Depending on the job and the person it can take a full year to be fully competent in a job.
Apple was smart to move slower. They are probably one of the best run companies in the world.
My experience is in cloud and I can give some insight on what we were thinking at this time. In cloud, infrastructure is key and our theory was that we needed to beat the other companies in terms of scale and capability. So we were aggressively trying to scale to get ahead of the competition. The environment was highly competitive all the way down to even the PCBA manufacturers. As an example, at one company, to get their "A teams" you need to be their top customer in terms of volume.
So while it looks odd by comparison, cloud providers were in a bit of a different environment than Apple.
there is a cultural mindset especially among startups that it's better to be alive and having to make layoffs than to move conservatively, have a faster mover overtake you and push you out of the market, and be dead. "The graveyards are full of businesses that moved appropriately for the market conditions", to warp a saying.
apple is an enormously stable company in ways that (to be very honest) even most other tech blue-chips are not. even microsoft or google have the sword of damocles hanging over them - given a sufficiently long and severe position of mismanagement it is possible that even google or MS could be unseated or even go under. arguably that is the trajectory MS was on in the 00s, and google could be similarly unseated by AI.
intel would be a great real-world example of that. Even 10 years ago the thought of big blue losing control was unthinkable, un-thinkable. And here we are, they're circling the drain right now and need to make very deep cuts and refocus on the essentials or they're going to be in bankruptcy in 5-10 years, during a down market in general and a specific market that they glutted during the pandemic (a lot of customers have enough PCs/laptops/servers for quite a while). And in contrast Apple is still making money hand-over-fist despite the market conditions - now that's stability.
I'm not going to say that google or MS doubling their size on a short-term timescale sounds like a good idea but it's a ride-or-die industry, you're pretty much either getting bigger or getting smaller, and mere homeostasis is a rare luxury.
I use "Eternal September" for the cultural effect on businesses that suddenly gorge themselves on new hires that have no exposure to the existing culture or context. The negative effects are loosely parallel to what happens when a social medium breaks out of being a subculture and goes mainstream.
Apple does a lot right. However, I find their insistence on keeping their teams in an office to be strange. My experience with Apple internally was an overly positive and optimistic culture, to the point where they had a hard time identifying, or discussing, what did not work well.
This comes directly from Steve Jobs legacy. He talked a lot about the value of small teams and how they self regulate but can breakup if they grow too quickly.
> [Apple is] probably one of the best run companies in the world.
I would argue that perhaps Apple's business side of things is arguably well-run. I personally disagree; I think that since Tim Cook has taken over, Apple's business focus is more on short-term gains instead of long-term quality.
But I would also strongly argue that their software side of things has been trending downward (especially in terms of quality) since Tim Cook took over.
> They are probably one of the best run companies in the world.
I would disagree with this. Although their risk is spread much better than it was in the early 00s, a huge amount of their recurring revenue right now teeters on the brink of destruction in the form of their 30% app store cut and the walled-garden nature of their app store. All it would take is a morally principled, non-lobbied regulator to step in and regulate that down to something reasonable like 5% or 3% and require allowing third party app stores (both actions would be equivalent economically because their current fee only works because of their monopoly), and I don't see someting like this not happening in the next decade.
It will be a huge and deserved adjustment when this does happen, and stock speculation will only amplify the blow in the form of lost stock value. There are many, many long-time holders of apple stock who might see the threat of such an event as a time to finally sell. Then we'll see how much value is really there.
Additionally, they have sunk billions of dollars in a brand new campus at a time when WFH is here to stay. That investment will also likely turn out to be worthless in the coming decades as the value of CRE races to $0.
It was all totally insane. The actual narrative of the layoffs is this:
High performing public tech companies went totally insane and doubled their head counts. Everyone else was a cargo cult with an open checkbook so they insanity-squared their head counts. No one could possibly manage such a gigantic influx of knowledge workers so resources were obviously being poorly allocated industry-wide. This first had an impact on low performing public companies, followed by the higher performing public companies, and then the cargo cults.
The places that didn't go insane were not only unaffected but stand to benefit immensely.
I can't speak to Meta, but Saleforce and Amazon probably needed to hire during the pandemic to keep on with demand.
Amazon saw a massive spike in their ecommerce business due to lockdowns so they had to hire to ensure they had the labour to deal with all the extra orders and deliveries. And even with this extra hiring I remember my deliveries being delayed often in 2020.
Saleforce is a weird software company because my understanding is a lot of their staff are there to help clients with integrations, manage accounts and to upsell. Again, assuming Salesforce saw a spike in demand during the pandemic they probably needed more employees because of the nature of their business.
My guess is that Apple also had to ramp up manufacturing significantly during the pandemic to meet demand, but obviously they don't employee people directly to do their manufacturing which probably gave them more flexibility when it came to meeting pandemic demand without increasing head count.
For the most part I don't understand why people act like tech companies were hiring recklessly during the pandemic. Are people forgetting how much demand was pulled forward by stimulus and lockdowns? These companies were forced to hire or lose market share. That's really the only two options they had.
Personally I'd be blaming politicians and the Fed for creating an impossible economic environment to operate in. If you were a company in 2020 your demand was either skyrocketing from lockdowns or at zero because you were forced to close your business. There was no in-between. Tech employees as initial beneficiaries of lockdowns are only now seeing the impact of job losses, but these were happening on mass elsewhere in the economy while lockdowns were in place.
It's pretty hard to be in charge of a public company and say no to the shareholders who want you to take advantage of the sudden bubble in demand.
Companies would have been punished for not growing, and now they are being punished if they don't shrink.
Who created that perverse system of incentives? The Fed, by making a number of mistakes in the past decade that kept the economy overboosted, by boosting it even more during 2020, and then by taking drastic action to kill the monster they created.
When Google announced 12,000 layoffs, for anyone reading past the headline this came on the back of hiring 41,000 people over the last two years. 41,000 is about 1/2 the total employees of Salesforce as of October 2022.
I joined Amazon in 2017, and even back then it was doubling every 1-2 years. Which still seemed absolutely nuts to me.
It did later mean the cult-like indoctrination of the leadership principles made sense. When you’re growing at that rate (even not considering the attrition that happens along side it) you can easily end up in a place where _most_ of the employees have been with the company for 12mo or less. If you’ve any hope of maintaining a consistent culture over time you need to get in embedded into people quick. Because the new hires are looking at people who’ve only been there 9 months as though they’re the OGs of the company.
I know that everyone is looking at this as "by the numbers" and there is truth to be had there, I offer a different take though.
Apple's culture is not all that amendable to high growth of headcount[0]. Its not in their DNA. Steve Jobs in his return back to Apple setup a cultural legacy around hiring smart, hiring smart, and being intentional. That its better to invest in hiring the best you can and people who fit. When I was there, it was another huge boom time for most of the industry, and Apple still wasn't hiring fast like Meta (then Facebook) or Google was. Some departments in Apple do scale quickly, but typically there is a targeted plan behind that scaling.
In essence, they don't like to take shots on scaling the people aspect of the business, because they value culture fit extremely high and intentionally put it ahead of many other metrics internally.
That was and I believe still is the case
[0]: one can argue no company can take rapid headcount rises, but setting that aside, clearly a lot of companies thought it could work
It was a symptom of the bubble economy, particularly in e-commerce and online services, that materialized during the pandemic and was egged on by a series of mistakes made by the Fed.
Demand looked like it was growing massively with no end in sight, valuations were insane, and money was easy to get.
A lot of companies didn't stop to think that maybe it was all just a bubble. So they hired to avoid missing out.
Basic things like running a sustainable business with a sane balance sheet were not scrutinized by investors. Now they are, and in the layoff emails to employees we see CEOs talking about how that is important, as if they suddenly realized it for the first time.
To be fair, some of those companies probably did make a lot more money than they would have if they hadn't taken advantage of the situation -- and they probably would have been punished by their shareholders if they didn't.
If your attitude is adjust your workforce at will then who cares. If I can hire twice as many people and get X done twice as fast then do it. At some point it is likely X is done and I don't need the people. Dump them on the streets. Unethical maybe but not irrational.
So, like everything, that’s not the whole truth. Apple was much more restrained, but that’s because it’s always been restrained. I commented this before here, but not all tech companies substantially changed behavior wrt hiring…
We forget that many of these companies have been doubling every few years already. Google and meta were startups in the 2000s, apple and Microsoft are 20+y older.
Basically, most of these tech companies have been hiring at a constant rate for years, and also experiencing constant attrition. Once the economy soured, and then hiring freezes started, attrition rates had crashed, and the employee count wasn't as affected by freeze as desired. The layoffs have been roughly a reset towards the headcount before the freeze for many companies.
While the whole article is paywalled, I'll quote an excerpt from ben Thompson:
> The popular narrative right now about these layoffs is that tech companies dramatically over-hired during the pandemic, but while that seems to have happened with Amazon — and for arguably very good reasons given the way that e-commerce shot up during lockdowns in particular — the reality is that the rest of the tech companies largely increased at the same rate they always had. Sure, the number of employees they added was large, but that was a function of keeping the same hiring rate off of an ever increasing base.
> In short, no one was giving up a job at one of the big five tech companies this year as fear spread about a broad-based slowdown in hiring... These companies, though, adjusted more slowly to the slower rate of attrition, which means they accidentally increased their headcount... the relatively limited size of the layoffs to date actually reflects that: these companies are not returning to their pre-pandemic levels of employees, but rather to where they would be had they kept up roughly the same rates of hiring this year that they have over the last ten
It was in TFA. Unfortunately I can't get past the paywall again. There was a graph that had employee growth. I left out a couple companies but Meta and Google were mid 90's% and SF was something like 104% from 2020-2022. The source in the article was "Bloomberg" presumably they are from public filings.
companies borrowed billions (startups via equity raise, publics via debt offering at almost zero % rates) and quickly increased headcount in the name of chasing growth
Yes. Apple's size is still large but isn't ten times as large as Amazon, nor has it grown as much in a short space of time.
But surely someone must have questioned the industry mass over hiring with the Covid bubble and VC cheap money fuelling it for decades to result in these mass layoffs?
Apple's underlying economics haven't changed, so they have not had any reason to over-hire in the first place.
Amazon, Google, Meta, Shopify and others are all e-commerce based. There was a clear trend that e-commerce had shifted up due to the pandemic, and looked to be permanent. That bet was wrong, so they all had layoffs.
Other companies were willing to hire lots of developers because the ROI on devs was good compared to low inflation and low interest rates. Then both of those things changed, so the ROI on a dev compared to investing in other things became much worse- so there's less money for developers.
Meanwhile, Apple has a mostly-stable massive chunk of the consumer device market and has always had a profit margin that is startlingly high. Not much has changed as far as they're concerned.
I still can't believe major corporations thought the shift to ecommerce from the pandemic "looked to be permanent". More people than not spent 2 years complaining they couldn't leave the house and rushing out to the pub/shops/holidays the minute restrictions dropped.
It was certainly a possibility, but staggers my mind that companies of this size all decided it was a sureity.
If I were to be uncharitable, this is the effect of senior staff at these companies having been completely detached from the pandemic experience of the majority of the population. Lots of people still had to go to work F2F, lots of people spent it cooped up in 30m2 apartments with flatmates they hate.
That's not exactly what they bet, because anyone knows that it would be dumb, including them.
What you have to look at is e-commerce adoption as a % of retail. This % is increasing every year since the end of the 90s. It was about 10% pre-pandemic.
Of course they knew that the huge jump from COVID wouldn't be permanent. What they bet however is that once things re-open, SOME of that conversion to e-commerce would be permanent and that trend of % of retail on ecom would keep increasing at a faster pace than if COVID had not happened. Which wasn't the worse bet to take, you'd think that if people get used to a certain way of shopping and we invest in all this ecom infrastructure, some people would prefer the convenience of it in the long term.
Tobi explained it well in his announcement for layoffs last year at Shopify (which came much earlier than other tech companies, likely because their revenue is much more strongly related to ecom revenue)
https://news.shopify.com/changes-to-shopifys-team
I don't think they thought it was permanent as much as no one really knew when it would stop. They had to make a choice whether to hire enough to sustain the current growth rates or scale back growth in which case competitors might be able to capture that market share. No one had a crystal ball regarding when exactly the growth would stop and what the post-growth period would look like, so from that perspective using all available evidence, the play was to capture market share and worry about the future when it happens.
It's a reasonable strategy, the risk being their cost structure gets unbalanced and they might have to lay off people. Contrary to what people here seem to think, laying off people isn't the end of the world, and many of these companies are very comfortable doing it once their growth calculus changes. It was a calculated risk and if we are being honest, it paid off very well for most of the companies which are currently doing layoffs. In many cases the alternative would be to forfeit growth just to potentially save jobs down the line - but what would that look like for companies like Amazon? I don't know if people remember but when the pandemic hit Amazon was scrambling to meet the demands of customers and prime shipping times shot up from 1 day delivery to sometimes more than a week. Those situations would give competitors like WalMart an opening to capitalize on taking market share.
At the end of the day, no one had a crystal ball, and while companies probably shouldn't have assumed whatever growth rates of the quarter were permanent, to ignore the growth and not hire in that environment carried it's own risks. And besides, are the current growth rates permanent with all the macro-economic factors at play? Of course not, most likely the economy will pick up at some point, but companies don't know when exactly that will be, so the prudent thing is to prioritize their workforce on high priority revenue generating products and balance their cost structure around the current economic realities.
> Lots of people still had to go to work F2F, lots of people spent it cooped up in 30m2 apartments with flatmates they hate.
I assume by `F2F` you mean "face-to-face"?
I think that's a matter of perspective. In my echo chamber, people live with flatmates that they get along with just fine and are happy that they don't have to go to an office to do work that could be done at home.
> More people than not spent 2 years complaining they couldn't leave the house
So... perhaps they do indeed want to "leave the house". But I think they still don't want to go to the office when they can work from home.
I think e-commerce is indeed shifted-up relative to the start of the pandemic. I think things that e-commerce can't do well are still where people want to leave the house. As you said, pubs/window shopping (not quite shopping itself)/holidays.
> I still can't believe major corporations thought the shift to ecommerce from the pandemic "looked to be permanent".
My theory is that it had less to do with e-commerce overall than more to do with all the big spenders in VC and crypto that essentially vanished once QE and ZIRP regime changed completely (over a very short period).
Not unlike the dotcom boom where large companies at the time like Sun/Cisco took huge losses because they were selling shovels for the gold miners (startups) who suddenly all went out of business. It's no surprise that so many of the Super Bowl ads were crypto - there was an immense amount of such cash swishing around.
Apple didn't dip into that market at all (naturally they are B2C) so they neither hired for that gold rush, nor fired as the gold rush faded.
A more concrete uncharitable explanation: if you're one of those execs who only cares about next quarter, convincing people that a temporary situation is permanent would be one way to leverage your ideas.
The question isn't "is it permanent" it's "what are the chances it's permanent". I can imagine that if they come to the conclusion that there's even a 10% chance then it makes sense to invest resources as if it will happen because they can always just lay people off, but it's much harder to catch up.
Not only that, but you have to recall there was the chip shortage before and during the pandemic. Given Apple's reliance on HW sales, it would be foolish to ramp up hiring when you can't obtain the materials for your products. While at the same time people moved to buying everything online and having Teams/Zoom calls for all work and school. The situation was just very different for Apple vs Amazon/Google/Microsoft/Zoom.
There was a chip shortage for old machines, bigger fabrication sizes, and because car manufacturers and others stupidly canceled their contracts with chip makers, anticipating a downturn when instead there was a huge boom in demand.
Apple was largely unaffected by this because they are first in line for new fabrication processes, did not cancel their existing chip orders, and uses mostly modern fabs anyway, not bargain basement 40nm+ stuff.
The M1 and other 5nm and smaller chips largely kept pace with demand. It’s never been difficult to find a Mac throughout the pandemic.
> Meanwhile, Apple has a mostly-stable massive chunk of the consumer device market and has always had a profit margin that is startlingly high. Not much has changed as far as they're concerned.
But they were selling the same thing, just because more people buy laptops doesn't mean you have to hire more hardware engineers. The design is the same, you scale your outsourced manufacturing instead. With e-commerce you absolutely need more engineers to maintain the software and you need to buy more servers and hire more sysadmins etc.
I don't believe that any CEO/CFO with half a brain actually thought this. Sure, things wouldn't return to pre-pandemic levels necessarily, but the COVID-induced state was not going to permanently change human behavior.
> ROI on devs was good compared to low inflation and low interest rates. Then both of those things changed
this is more the reason; the "mea culpa, how could we have known" excuses is just to cover a regression to the mean they knew was eventually going to happen.
For CEOs that thought this would be permanent see Shopify and Amazon. Both have said this publicly and Amazon spent billions on transportation infra. They are not stupid.
> Other companies were willing to hire lots of developers because the ROI on devs was good compared to low inflation and low interest rates
Was the ROI good though? Did any of these companies seem to deliver new products or features faster? Do their financials suggest that these devs somehow improved operational efficiency (e.g. improved gross margins)?
Or was it just that they hired because they could afford to?
I think it was more of a tragedy of the commons where some companies started aggressively hiring, and other companies followed suit to avoid losing access to talent. The pandemic was a huge societal event, but nothing indicated it was going to be the new normal and CEOs who grew headcount expecting it to go on indefinitely made a huge, and arguably an easily avoidable, misstep.
Most orgs claim that they need X% more money to serve X% more users, and they use that money to hire X% more devs. Since the users and money are both there, they get it in the short term, and nobody looks at the big picture until money tightens up
> Apple's underlying economics haven't changed, so they have not had any reason to over-hire in the first place.
The bloomberg article has a visual showing revenue-per-employee going up from 1.17M/employee (2017-2019) to 2.51M/employee (2020-2022), so ... some of the underlying economics changed somehow?
exactly. decompass companies hired because they were seeing a boost in the amount of consumption, literally tripling overnight in some cases. has been well documented as "the quickening" where decades of growth was observed in the matter of weeks.
CEOs that didn't meet those needs would be fired for ceding market share instead. This demand explosion did not manifest in hardware companies such as Apple.
I can only speak to my experience in the engineering org at Meta and past experience at Apple.
One key difference between Apple and Meta is that each individual (on the ground) team at Apple is responsible for its own hiring. Whereas at Meta, they have a general company-wide engineering pool that is mainly driven by recruiters to fill.
A manager at Apple will get a batch of resumes and start hiring with a recruiter and the team members will then interview each candidate and decide to move forward or not with a candidate.
A manager at Meta, on the other hand, is constantly trying to sell their team to potential engineers looking to either switch from another team internally, or come from the general pool (bootcamp).
Make no mistake, both companies get headcount budgets driven by org-wide budgets set by the very top and HR uses that budget with very complicated formulas for determining how fast they need to hire to maintain or grow headcount to stay ahead of people leaving. Also, engineering managers absolutely have endless work to assign to new hires. So given the headcount, they will definitely make use of it.
All that to say, I do think Meta's internal team structure made it far easier to over-hire and Apple's intentionally inefficient structure prevented doing the same.
Reaction: Sounds like Apple's method encourages managers to select and hire one person, who is a very good fit for his team's actual current need. Vs. Meta's encourages managers to cast a net, haul in a load of fish, and hope that one of 'em is a passable fit for his team's current need. But many keep a few extra fish regardless - since he'll have more needs in the future, and fishing is a crap shoot.
Or the reverse take, at Meta, ICs find the projects on teams that excite them and they are the ones empowered to decide what is a good fit for themselves.
> "Also, engineering managers absolutely have endless work to assign to new hires. So given the headcount, they will definitely make use of it."
This seems like the crux of the problem. Of course engineering managers always want more headcount - I am one and I would be very happy to get more headcount. My backlog is ten miles long and keeps growing.
But I also understand that if I head enough engineers to actually take care of all the things I want, I will have likely overhired, and am chasing increasingly marginal returns on investment. Some things should not make it off the backlog, because honestly the ROI likely isn't worth it.
"Optimal" staffing at the team level is almost certainly not optimal for either the company or the product. A team that doesn't have to constantly drop things because of lack of resources is likely building a lot of stuff that is poorly-justified.
In a healthy company the desire to do everything is tempered by financial reality and sound judgment - it sounds like both got tossed out the airlock at many companies.
I had the impression Google and Amazon use the same model as Meta. But in working in the field since the 1990s I have never encountered or worked at any company that used their model. I think their model is likely superior in terms of hiring the most people in the shortest time. With the shortcoming that it might make it easy to overhire, and it might not fill the job with the best person as often.
Lots of small to massive very successful companies don't need to use their model of hiring a pool of people and then only later figuring out which role they will fill. If you're only hiring someone when you have identified a specific role and identified the correct person for that role it might take longer to hire someone, but you won't overhire as easily and you're probably more likely to have a higher hit rate in terms of getting the right person.
The funny thing is my personal experience was the opposite. I have a lot of experience in embedded software. The recruiters I interacted with at Google knew about my specialization and targeted positions that were embedded-related (like, at waymo or their other projects). However, the actual phone screen interview was with a web programmer that had very little C++ background and seemed pretty uncomfortable with me using that to solve their quiz. I ended up being weirded out by that and not moving forward. I figured I'd have to go back and practice a lot of stuff I hadn't touched in a while to actually impress their interview panel.
Meta was different. I interviewed with someone from the reality labs team and it was super specific. Our discussion and the software quizzing they did was right up my alley. Like, they specifically had a reason to want to hire me, and given what they described, I had a reason to be very interested in the project they were hiring for. It was a big shock, because the last time I spoke to someone hiring for FB they seemed to have no idea what they were doing lol. I still didn't move forward! But I was really tempted to.
I had a similar experience when I talked to someone at Apple. Unfortunately that time they wanted someone even more specialized than I was (they wanted someone to work on things to manage multiple JTAG devices - that was already innately familiar with doing that sorta thing at a hardware level). Still, 10/10, I'd apply to Apple again. I'd also apply to Meta again... although I think they basically killed the entire reality labs thing. I was so impressed by Meta. Still am.
Google is very similar. You go through a pipeline to send you to the hiring committee, then once you are cleared and leveled, you can now interview with managers who can read your scores etc.
> Also, engineering managers absolutely have endless work to assign to new hires
Assuming there isn't a sharp dropoff of the ROI on the work juuuuust past the point where the current team can tackle it, that means that the work in the backlog is valuable and worth paying for. By chopping people they are saying actually, this work doesn't need to be done. Whether that work needs to be done or is valuable has not magically changed. That means the company was wrong all along about whether the work in the backlog was worth doing, and had all along had too many people on the team -- despite painfully fighting for headcount to get that work done, and despite careful calculus about which teams to spend budget on, all those managers were basically categorically wrong all along. How can we reconcile all that?
This doesn't seem a plausible hypothesis. there are tons of companies which adopt the Apple model, mind included in this model. actually you have to argue to make the case for why your role is important which makes qualifying for head count even more unlikely
It all comes down to Apple being a very focused company. They know their customers, what they want and they have a much better business model. Steve Jobs once explained it by saying they say no to a lots of things even to those who seem on paper great ideas. All that to stay focus.
On the other hand, Google is all over the places, they are very distracted and confident that they will always be the indisputable kind in ads and search so they didn’t invest much in generating other long term major revenue streams.
Their incentives for promotions is all wrong and has led to tons of products being launched just for the sake of some manager aspirations and empowered, bored engineers who wanted to work on yet another green field project.
They missed the boat on the cloud, and unless they turn the ship very quickly they are gonna leave a big chunk of search and ads to Microsoft.
I’d argue they should also review their hiring strategy that have intoxicated the whole industry and clearly hasn’t led to better results.
> On the other hand, Google is all over the places, they are very distracted and confident that they will always be the indisputable kind in ads and search so they didn’t invest much in generating other long term major revenue streams.
I think this is a very muddled analysis. You seem to be saying that the lack of focus is caused by the perception of a permanent easy revenue stream. But I think the causation is actually the reverse of that. The lack of focus is more like a breadth first search for additional sustainable revenue streams undertaken because they know the golden goose can't lay eggs forever.
And similarly backwards: it is Apple who has the luxury of focus because high-end consumer computing hardware is a stable revenue stream with very little risk of drying up over a very long time horizon.
> You seem to be saying that the lack of focus is caused by the perception of a permanent easy revenue stream. But I think the causation is actually the reverse of that. The lack of focus is more like a breadth first search for additional sustainable revenue streams undertaken because they know the golden goose can't lay eggs forever.
I think the difference is urgency. They probably do know that the golden eggs will stop coming at some point, but they don't believe it'll happen for a long while. Perhaps as a consequence of this, they very rarely commit to projects in a life-or-death way. At this point it's a HN trope to state this, but I do believe the reputational damage done by this lack of commitment to any of its fledgling projects is doing massive harm to Google's ability to find new revenue streams.
At almost every place I've ever worked, there were about 10-20% of employees who were unproductive. Sometimes it's because they were bad hires, or they were just working on projects that added no value.
I was at a series B startup that did 15% layoffs during the first pandemic wave. The result: we moved faster, code quality went up, morale increased over time. Some layoffs are driven by necessity, and some are opportunistic ways for companies to retool and mass-fire low performers.
This applies at higher levels of abstractions too. When google did their layoffs, multiple entire unprofitable teams and business units were eliminated. It doesn't matter if "they could pay for it". They had an opportune excuse to remove some ugly looking lines from the balance sheet all at once and they took it.
It's impractical for them to try to differentiate high and low individual performers at that scale. No matter how talented you are, you were contributing to a loss-making part of the company.
Apple seems to have been better at not having useless teams and divisions. Tim Cook is a disciplined guy, so I'm not surprised.
This is assuming that layoffs affect the correct group of people, in which case the obvious question is why couldn't those people be informed earlier and been given a choice to find a different position or to improve their performance? At Google specifically, many high performers were laid off without explanation. When entire programs were cut, many general-purpose programmers were lost simply due to being in the wrong place at the wrong time rather than having the wrong skills or having low performance.
Given that the evaluation of who to cut is made by outside groups, in a short period of time, without appeal, it seems more likely that layoffs in these cases are less about cutting low performers and more about getting rid of people the company is mismanaging, or people that the company is overpaying. Without changing that mismanagement, the result won't be a better environment. The message to employees is rough also: "don't trust our performance evaluations".
Your statement that Google is "all over the place" is at odds with what you say later "they didn’t invest much in generating other long term major revenue streams."
Maybe the investments weren't successful or didn't pan out, but that is not to say they didn't invest.
I think Google was all over the place until roughly covid, but for the past few years the mission has solidly crystallized. Ads (dragging Search along), Youtube, "Platforms & Ecosystems" (Android, Assistant, Play & Chrome), Hardware (Nest, Fitbit, Pixel), Cloud. That's not really a very broad or convoluted set of priorities at the top level.
The problem is the culture. Google is an exceptionally poorly managed company as a rule I claim this is by design from the beginning: as an engineering meritocracy, the technically best ideas won (over time) and employees voted with their feet. That doesn't scale. I'd argue that it began to fail pretty dramatically around the time Diane Greene took over Cloud and Prabhakar moved over (you could probably also argue that those org changes were lagging indicators, and the real start to the "problems" began when Ruth was hired) to run Ads/Search. As the board became increasingly business focused, the lack of solid management or even strategic leadership became more problematic.
What's rule #1 of B2B? Being responsive to your customers' needs and acting predictably. The lack of top-to-bottom management combined with the legacy meritocratic culture have not lent themselves to the same sort of command-and-control hierarchy you see at places like Apple & Microsoft, both of which have been almost entirely market driven for decades.
If you look at this[1] org chart cartoon from about ten years ago, you see what things looked like then. You had the Cult of Jobs at Apple, where a singular leader compartmentalized the entire company. You see the Sales & Marketing driven Microsoft, where Ballmer created stupid internal coopetition, and you see the insane messes at FB & Google. I suggest these are no longer accurate representations. As all of these big tech businesses have matured, everyone is converging on Amazon's & Oracle's command & control model, which is the traditional strategy for managing large organizations. It has been easier for some to get there (MSFT, for example, just had to remove the "guns" from their org chart), but at places like Google & Facebook there are fundamental changes that are required for the corporations to run efficiently that are also orthogonal to the founders' principles of how things should work, and (in my opinion) what you've been seeing in the past few quarters are "light" attempts at dealing with that. For Google it was the "cut off your nose to spite your face" 12k layoff. For FB it was a more existential staff cut but also the more recent notice to middle management that many of them are expected to become ICs again, to remove redundant layers.
I don't think it's in Google's current culture to "turn the ship quickly". Frankly, under the circumstances, I think the only way to legitimately force this would be to divorce Ads from the rest of the business (or even just make it its own Bet). Anything else will likely fail, slowly, and feel like death by a thousand cuts for the rank & file and like pushing a string uphill to the leadership.
Which is interesting because the whole purpose of setting up Alphabet was to diversity revenue streams. But I don't think any of those efforts have generated significant revenue relative to their core business.
Apple is known for going with tiny teams rather than the gigantic, bloated trees of VPs and Directors that other companies have. Their CFO even spoke[1] publicly about it, a rarity. Sometimes you just need a team of two people reporting to the CFO to do something. You don't need 2 SVPs, with 10 VPs, with 80 Directors, each with trees of management/ICs to do the same thing.
Apple relies a lot on contractors. Those 2 IR folks likely have 2-3 comms firms on retainer. Those 7 treasury folks likely have an entire team staffed at a major bank.
Some companies decide to source labor in house, others don’t.
Just because CFO's direct reports are lean, it doesn't mean that managers in other orgs don't indulge in empire building. It could happen even within CFO org, where he can't judge.
I wouldn't lump Amazon in with the others, unless the additional hiring/cuts were to AWS. That's because Amazon __had__ to increase its distribution/warehouse staff during the pandemic just to handle to the __huge__ increase in online purchases, regardless of how long that pattern lasted. So it's going to have a more cyclical hiring/firing pattern than pure tech companies who don't need to double their engineering staff just because there's a temporary surge in their software/services.
But they did that, too. You read about 18000 people being dropped by Amazon, but you didn't read about the 80000 which have been "silently" let go on top of that. Thing is, somewhere in the news you may have stumbled over the downsize from ~1.6 million to ~1.5 million, and 18000 isn't enough for that. These 80000 are part of that cycle you mentioned.
distribution/warehouse problem and over hiring problem are two separate problems.
i will explain overhiring problem.
from 2018 to 2021 many amazon executives and director leave company. this continued in 2022.
these “tech” leadership very hands on..strong technical acumen. they have vision..manage people..understand business..understand the tech and how to scale.
these people not perfect. under them it very hard burnout factory of place to work. good chance if you work here you need therapy.
these people all start leaving.
they replace by “professional” managers. professional manager has one goal: grow headcount and build empire so they get promoted.
entire teams exist with no valuable output. team of 8 people supporting a service built 10 years ago maybe doing patching like replace outdated java log4j library and redeploy. no feature work. entire team can be fired and service ownership could be given easily to some team doing feature work in another space.
this problem happening all over amazon. innovation at amazon is on how to increase revenue. what they do is hire mba grad, put pressure on them to deliver. Mba grad does obvious shitty thing… let show more ads. if you see amazon.com and search it is now flea market but before you buy any cheap trash first you see walls and walls of “sponsored” recommendation or what is actually fucking ad.
it a massive grift.
amazon need Bezos to return like bob iger do at Disney. jassy only focus on aws
> Amazon __had__ to increase its distribution/warehouse staff during the pandemic just to handle to the __huge__ increase in online purchases, regardless of how long that pattern lasted.
This is certainly what I remember from the pandemic, but it seems like it would be hard to quantify. Anecdotally, for my fairly typical family, we were probably ordering < 10% of our items online; does anyone have data on orders vs. average household?
All of these "company X has avoided layoffs" articles are pretty foolish, are all the big layoffs done? Are we even sure there won't be second rounds by summer?
Apple could layoff 4% in a week and these same analysts will try to explain why there was no other way
Have you ever worked at a high profile company that laid off people? I have. Everything is good and the narrative is "We aren't like other companies" until it actually happens.
Its suboptimal to explicitly telegraph layoffs from an employee morale perspective. As leadership, its better to ask for forgiveness after the layoff than to ask for permission to lay off.
They may actually get through this without laying off, but its certainly not guaranteed just because the CEO says "no layoffs."
You mean to tell me that Apple could have created thousands of high paying jobs, if only for several years, but didn’t. And this is good? I can never remember who to be mad at.
More seriously, I realize this is just clickbait, but I wonder how you could determine objectively which approach (hiring slow and needing to catch up, hiring medium, hiring fast and needing to fire) is “better for business”. Seems very hard to control variables.
Depends on if you have comb-selections of the people hired.
If we follow one path all the way to the end: If you can bring on a large number of people, then you can potentially evaluate them as "up-and-coming" high-quality talent. Those talents can be soaked in your business and technology stack, and become internal experts. Over that talent's life within the company, you may also underpay them relative to bringing in the same equivalent 10+ year veteran and training them on your internal assets.
On another path: You can also develop a broader population of mid-grade, quality talent which can strength workforce resilience.
During the mass layoff, procedures are different, and you may not have to follow quite the same fire-process as with an individual, and without some of the individual recourse processes regarding discrimination.
FWIW, Microsoft used to (still does?) had a certain percentage of layoffs every year. In a good environment, it's weeding; in a bad environment, it culls good talent.
Hiring many people and firing them shortly after isn't very productive use of human minds. Those people were doing probably something more valuable instead.
And now they can. It is good that people are being laid off. They can now go do the valuable thing. Perhaps Google's true target should have been 50% layoffs so that they can release people to go work on their valuable stuff instead of working at Google.
> You mean to tell me that Apple could have created thousands of high paying jobs, if only for several years, but didn’t. And this is good?
Yes, I consider it good management and judgement. Apple is a company, not some charity. Amazon, etc didn't hire out of the goodness of their hearts they felt they could capitalize on something that didn't materialize.
Well, maybe don't be mad at anyone. Aside from a small number of true a-holes, the vast majority of people are all stumbling along doing the best they can and trying to make the best decisions they can. Yep, sometimes we humans don't make the best decisions. Sometimes we do dumb things. But at the end of the day, I personally believe most of us are trying to do the right thing. If that wasn't true, our society would rapidly descend into chaos.
As for me, I'm trying not to be mad at anyone. You do you I guess.
Readit News
At Apples size this is still pretty huge. At least, I thought it was until I saw that Amazon, Meta and Salesforce basically DOUBLED in 2 years.
If this data is correct isnt that insane? How can you effectively double orgs of this size over a 2 year period? Its not like a startup with 50 people or something. I guess I was out of the loop on just how big the hiring was over the pandemic. Not that layoffs are good for employees and workers like me, but these companies must still have retained tons of the hires as RIFs in tech seem to be about 7-20%.
Apple was smart to move slower. They are probably one of the best run companies in the world.
Some of us never become competent.
So while it looks odd by comparison, cloud providers were in a bit of a different environment than Apple.
apple is an enormously stable company in ways that (to be very honest) even most other tech blue-chips are not. even microsoft or google have the sword of damocles hanging over them - given a sufficiently long and severe position of mismanagement it is possible that even google or MS could be unseated or even go under. arguably that is the trajectory MS was on in the 00s, and google could be similarly unseated by AI.
intel would be a great real-world example of that. Even 10 years ago the thought of big blue losing control was unthinkable, un-thinkable. And here we are, they're circling the drain right now and need to make very deep cuts and refocus on the essentials or they're going to be in bankruptcy in 5-10 years, during a down market in general and a specific market that they glutted during the pandemic (a lot of customers have enough PCs/laptops/servers for quite a while). And in contrast Apple is still making money hand-over-fist despite the market conditions - now that's stability.
I'm not going to say that google or MS doubling their size on a short-term timescale sounds like a good idea but it's a ride-or-die industry, you're pretty much either getting bigger or getting smaller, and mere homeostasis is a rare luxury.
https://youtu.be/wTgQ2PBiz-g
This seems to be general sentiment here lately. Do you have any evidence to support this or is purely conjecture?
I would argue that perhaps Apple's business side of things is arguably well-run. I personally disagree; I think that since Tim Cook has taken over, Apple's business focus is more on short-term gains instead of long-term quality.
But I would also strongly argue that their software side of things has been trending downward (especially in terms of quality) since Tim Cook took over.
They off-source all of their factory efforts to other companies. The other companies are doing the hiring and firing.
Probably the best run company is Qualcomm. I have never heard them do layoffs. And they are based in San Diego.
edit: Just googled it and found https://www.thelayoff.com/t/1l5vLinG
edit2: also, https://www.thelayoff.com/apple
I would disagree with this. Although their risk is spread much better than it was in the early 00s, a huge amount of their recurring revenue right now teeters on the brink of destruction in the form of their 30% app store cut and the walled-garden nature of their app store. All it would take is a morally principled, non-lobbied regulator to step in and regulate that down to something reasonable like 5% or 3% and require allowing third party app stores (both actions would be equivalent economically because their current fee only works because of their monopoly), and I don't see someting like this not happening in the next decade.
It will be a huge and deserved adjustment when this does happen, and stock speculation will only amplify the blow in the form of lost stock value. There are many, many long-time holders of apple stock who might see the threat of such an event as a time to finally sell. Then we'll see how much value is really there.
Additionally, they have sunk billions of dollars in a brand new campus at a time when WFH is here to stay. That investment will also likely turn out to be worthless in the coming decades as the value of CRE races to $0.
High performing public tech companies went totally insane and doubled their head counts. Everyone else was a cargo cult with an open checkbook so they insanity-squared their head counts. No one could possibly manage such a gigantic influx of knowledge workers so resources were obviously being poorly allocated industry-wide. This first had an impact on low performing public companies, followed by the higher performing public companies, and then the cargo cults.
The places that didn't go insane were not only unaffected but stand to benefit immensely.
Are they a good investment?
Dead Comment
Amazon saw a massive spike in their ecommerce business due to lockdowns so they had to hire to ensure they had the labour to deal with all the extra orders and deliveries. And even with this extra hiring I remember my deliveries being delayed often in 2020.
Saleforce is a weird software company because my understanding is a lot of their staff are there to help clients with integrations, manage accounts and to upsell. Again, assuming Salesforce saw a spike in demand during the pandemic they probably needed more employees because of the nature of their business.
My guess is that Apple also had to ramp up manufacturing significantly during the pandemic to meet demand, but obviously they don't employee people directly to do their manufacturing which probably gave them more flexibility when it came to meeting pandemic demand without increasing head count.
For the most part I don't understand why people act like tech companies were hiring recklessly during the pandemic. Are people forgetting how much demand was pulled forward by stimulus and lockdowns? These companies were forced to hire or lose market share. That's really the only two options they had.
Personally I'd be blaming politicians and the Fed for creating an impossible economic environment to operate in. If you were a company in 2020 your demand was either skyrocketing from lockdowns or at zero because you were forced to close your business. There was no in-between. Tech employees as initial beneficiaries of lockdowns are only now seeing the impact of job losses, but these were happening on mass elsewhere in the economy while lockdowns were in place.
It's pretty hard to be in charge of a public company and say no to the shareholders who want you to take advantage of the sudden bubble in demand.
Companies would have been punished for not growing, and now they are being punished if they don't shrink.
Who created that perverse system of incentives? The Fed, by making a number of mistakes in the past decade that kept the economy overboosted, by boosting it even more during 2020, and then by taking drastic action to kill the monster they created.
It did later mean the cult-like indoctrination of the leadership principles made sense. When you’re growing at that rate (even not considering the attrition that happens along side it) you can easily end up in a place where _most_ of the employees have been with the company for 12mo or less. If you’ve any hope of maintaining a consistent culture over time you need to get in embedded into people quick. Because the new hires are looking at people who’ve only been there 9 months as though they’re the OGs of the company.
Apple's culture is not all that amendable to high growth of headcount[0]. Its not in their DNA. Steve Jobs in his return back to Apple setup a cultural legacy around hiring smart, hiring smart, and being intentional. That its better to invest in hiring the best you can and people who fit. When I was there, it was another huge boom time for most of the industry, and Apple still wasn't hiring fast like Meta (then Facebook) or Google was. Some departments in Apple do scale quickly, but typically there is a targeted plan behind that scaling.
In essence, they don't like to take shots on scaling the people aspect of the business, because they value culture fit extremely high and intentionally put it ahead of many other metrics internally.
That was and I believe still is the case
[0]: one can argue no company can take rapid headcount rises, but setting that aside, clearly a lot of companies thought it could work
Demand looked like it was growing massively with no end in sight, valuations were insane, and money was easy to get.
A lot of companies didn't stop to think that maybe it was all just a bubble. So they hired to avoid missing out.
Basic things like running a sustainable business with a sane balance sheet were not scrutinized by investors. Now they are, and in the layoff emails to employees we see CEOs talking about how that is important, as if they suddenly realized it for the first time.
To be fair, some of those companies probably did make a lot more money than they would have if they hadn't taken advantage of the situation -- and they probably would have been punished by their shareholders if they didn't.
Apparently you can't.
That's the cool part - you can't.
We forget that many of these companies have been doubling every few years already. Google and meta were startups in the 2000s, apple and Microsoft are 20+y older.
Basically, most of these tech companies have been hiring at a constant rate for years, and also experiencing constant attrition. Once the economy soured, and then hiring freezes started, attrition rates had crashed, and the employee count wasn't as affected by freeze as desired. The layoffs have been roughly a reset towards the headcount before the freeze for many companies.
While the whole article is paywalled, I'll quote an excerpt from ben Thompson:
> The popular narrative right now about these layoffs is that tech companies dramatically over-hired during the pandemic, but while that seems to have happened with Amazon — and for arguably very good reasons given the way that e-commerce shot up during lockdowns in particular — the reality is that the rest of the tech companies largely increased at the same rate they always had. Sure, the number of employees they added was large, but that was a function of keeping the same hiring rate off of an ever increasing base.
> In short, no one was giving up a job at one of the big five tech companies this year as fear spread about a broad-based slowdown in hiring... These companies, though, adjusted more slowly to the slower rate of attrition, which means they accidentally increased their headcount... the relatively limited size of the layoffs to date actually reflects that: these companies are not returning to their pre-pandemic levels of employees, but rather to where they would be had they kept up roughly the same rates of hiring this year that they have over the last ten
[0] https://stratechery.com/2023/tech-layoffs-big-techs-hiring-r...
But surely someone must have questioned the industry mass over hiring with the Covid bubble and VC cheap money fuelling it for decades to result in these mass layoffs?
Amazon, Google, Meta, Shopify and others are all e-commerce based. There was a clear trend that e-commerce had shifted up due to the pandemic, and looked to be permanent. That bet was wrong, so they all had layoffs.
Other companies were willing to hire lots of developers because the ROI on devs was good compared to low inflation and low interest rates. Then both of those things changed, so the ROI on a dev compared to investing in other things became much worse- so there's less money for developers.
Meanwhile, Apple has a mostly-stable massive chunk of the consumer device market and has always had a profit margin that is startlingly high. Not much has changed as far as they're concerned.
It was certainly a possibility, but staggers my mind that companies of this size all decided it was a sureity.
If I were to be uncharitable, this is the effect of senior staff at these companies having been completely detached from the pandemic experience of the majority of the population. Lots of people still had to go to work F2F, lots of people spent it cooped up in 30m2 apartments with flatmates they hate.
What you have to look at is e-commerce adoption as a % of retail. This % is increasing every year since the end of the 90s. It was about 10% pre-pandemic.
Of course they knew that the huge jump from COVID wouldn't be permanent. What they bet however is that once things re-open, SOME of that conversion to e-commerce would be permanent and that trend of % of retail on ecom would keep increasing at a faster pace than if COVID had not happened. Which wasn't the worse bet to take, you'd think that if people get used to a certain way of shopping and we invest in all this ecom infrastructure, some people would prefer the convenience of it in the long term.
Tobi explained it well in his announcement for layoffs last year at Shopify (which came much earlier than other tech companies, likely because their revenue is much more strongly related to ecom revenue) https://news.shopify.com/changes-to-shopifys-team
It's a reasonable strategy, the risk being their cost structure gets unbalanced and they might have to lay off people. Contrary to what people here seem to think, laying off people isn't the end of the world, and many of these companies are very comfortable doing it once their growth calculus changes. It was a calculated risk and if we are being honest, it paid off very well for most of the companies which are currently doing layoffs. In many cases the alternative would be to forfeit growth just to potentially save jobs down the line - but what would that look like for companies like Amazon? I don't know if people remember but when the pandemic hit Amazon was scrambling to meet the demands of customers and prime shipping times shot up from 1 day delivery to sometimes more than a week. Those situations would give competitors like WalMart an opening to capitalize on taking market share.
At the end of the day, no one had a crystal ball, and while companies probably shouldn't have assumed whatever growth rates of the quarter were permanent, to ignore the growth and not hire in that environment carried it's own risks. And besides, are the current growth rates permanent with all the macro-economic factors at play? Of course not, most likely the economy will pick up at some point, but companies don't know when exactly that will be, so the prudent thing is to prioritize their workforce on high priority revenue generating products and balance their cost structure around the current economic realities.
What matters is not getting fired.
It's hard to get fired if your actions are in line with the consensus.
I assume by `F2F` you mean "face-to-face"?
I think that's a matter of perspective. In my echo chamber, people live with flatmates that they get along with just fine and are happy that they don't have to go to an office to do work that could be done at home.
> More people than not spent 2 years complaining they couldn't leave the house
So... perhaps they do indeed want to "leave the house". But I think they still don't want to go to the office when they can work from home.
I think e-commerce is indeed shifted-up relative to the start of the pandemic. I think things that e-commerce can't do well are still where people want to leave the house. As you said, pubs/window shopping (not quite shopping itself)/holidays.
My theory is that it had less to do with e-commerce overall than more to do with all the big spenders in VC and crypto that essentially vanished once QE and ZIRP regime changed completely (over a very short period).
Not unlike the dotcom boom where large companies at the time like Sun/Cisco took huge losses because they were selling shovels for the gold miners (startups) who suddenly all went out of business. It's no surprise that so many of the Super Bowl ads were crypto - there was an immense amount of such cash swishing around.
Apple didn't dip into that market at all (naturally they are B2C) so they neither hired for that gold rush, nor fired as the gold rush faded.
Apple was largely unaffected by this because they are first in line for new fabrication processes, did not cancel their existing chip orders, and uses mostly modern fabs anyway, not bargain basement 40nm+ stuff.
The M1 and other 5nm and smaller chips largely kept pace with demand. It’s never been difficult to find a Mac throughout the pandemic.
Apple had a big bump in pandemic-related revenue too, inspired by mass WFH hardware purchases. And now Apple revenue has gone down as well: https://sixcolors.com/post/2023/02/apple-results-and-charts-...
I don't believe that any CEO/CFO with half a brain actually thought this. Sure, things wouldn't return to pre-pandemic levels necessarily, but the COVID-induced state was not going to permanently change human behavior.
> ROI on devs was good compared to low inflation and low interest rates. Then both of those things changed
this is more the reason; the "mea culpa, how could we have known" excuses is just to cover a regression to the mean they knew was eventually going to happen.
Both strategies make sense—make big, risky investments, or grind out more profits in existing, highly lucrative markets.
What are those risky bets I wonder?
Meanwhile Apple rolled out a completely custom CPU and transitioned all its hardware to it.
Was the ROI good though? Did any of these companies seem to deliver new products or features faster? Do their financials suggest that these devs somehow improved operational efficiency (e.g. improved gross margins)?
Or was it just that they hired because they could afford to?
The bloomberg article has a visual showing revenue-per-employee going up from 1.17M/employee (2017-2019) to 2.51M/employee (2020-2022), so ... some of the underlying economics changed somehow?
The pandemic probably contributed to that, but also during that period they went from their worst line of Macs in recent years to their best.
https://www.mckinsey.com/capabilities/strategy-and-corporate...
CEOs that didn't meet those needs would be fired for ceding market share instead. This demand explosion did not manifest in hardware companies such as Apple.
One key difference between Apple and Meta is that each individual (on the ground) team at Apple is responsible for its own hiring. Whereas at Meta, they have a general company-wide engineering pool that is mainly driven by recruiters to fill.
A manager at Apple will get a batch of resumes and start hiring with a recruiter and the team members will then interview each candidate and decide to move forward or not with a candidate.
A manager at Meta, on the other hand, is constantly trying to sell their team to potential engineers looking to either switch from another team internally, or come from the general pool (bootcamp).
Make no mistake, both companies get headcount budgets driven by org-wide budgets set by the very top and HR uses that budget with very complicated formulas for determining how fast they need to hire to maintain or grow headcount to stay ahead of people leaving. Also, engineering managers absolutely have endless work to assign to new hires. So given the headcount, they will definitely make use of it.
All that to say, I do think Meta's internal team structure made it far easier to over-hire and Apple's intentionally inefficient structure prevented doing the same.
This seems like the crux of the problem. Of course engineering managers always want more headcount - I am one and I would be very happy to get more headcount. My backlog is ten miles long and keeps growing.
But I also understand that if I head enough engineers to actually take care of all the things I want, I will have likely overhired, and am chasing increasingly marginal returns on investment. Some things should not make it off the backlog, because honestly the ROI likely isn't worth it.
"Optimal" staffing at the team level is almost certainly not optimal for either the company or the product. A team that doesn't have to constantly drop things because of lack of resources is likely building a lot of stuff that is poorly-justified.
In a healthy company the desire to do everything is tempered by financial reality and sound judgment - it sounds like both got tossed out the airlock at many companies.
I do question how you manage your backlog though, if there are things on it that should never be implemented, maybe you should clean it out? :-p
Lots of small to massive very successful companies don't need to use their model of hiring a pool of people and then only later figuring out which role they will fill. If you're only hiring someone when you have identified a specific role and identified the correct person for that role it might take longer to hire someone, but you won't overhire as easily and you're probably more likely to have a higher hit rate in terms of getting the right person.
Meta was different. I interviewed with someone from the reality labs team and it was super specific. Our discussion and the software quizzing they did was right up my alley. Like, they specifically had a reason to want to hire me, and given what they described, I had a reason to be very interested in the project they were hiring for. It was a big shock, because the last time I spoke to someone hiring for FB they seemed to have no idea what they were doing lol. I still didn't move forward! But I was really tempted to.
I had a similar experience when I talked to someone at Apple. Unfortunately that time they wanted someone even more specialized than I was (they wanted someone to work on things to manage multiple JTAG devices - that was already innately familiar with doing that sorta thing at a hardware level). Still, 10/10, I'd apply to Apple again. I'd also apply to Meta again... although I think they basically killed the entire reality labs thing. I was so impressed by Meta. Still am.
Assuming there isn't a sharp dropoff of the ROI on the work juuuuust past the point where the current team can tackle it, that means that the work in the backlog is valuable and worth paying for. By chopping people they are saying actually, this work doesn't need to be done. Whether that work needs to be done or is valuable has not magically changed. That means the company was wrong all along about whether the work in the backlog was worth doing, and had all along had too many people on the team -- despite painfully fighting for headcount to get that work done, and despite careful calculus about which teams to spend budget on, all those managers were basically categorically wrong all along. How can we reconcile all that?
On the other hand, Google is all over the places, they are very distracted and confident that they will always be the indisputable kind in ads and search so they didn’t invest much in generating other long term major revenue streams.
Their incentives for promotions is all wrong and has led to tons of products being launched just for the sake of some manager aspirations and empowered, bored engineers who wanted to work on yet another green field project.
They missed the boat on the cloud, and unless they turn the ship very quickly they are gonna leave a big chunk of search and ads to Microsoft.
I’d argue they should also review their hiring strategy that have intoxicated the whole industry and clearly hasn’t led to better results.
I think this is a very muddled analysis. You seem to be saying that the lack of focus is caused by the perception of a permanent easy revenue stream. But I think the causation is actually the reverse of that. The lack of focus is more like a breadth first search for additional sustainable revenue streams undertaken because they know the golden goose can't lay eggs forever.
And similarly backwards: it is Apple who has the luxury of focus because high-end consumer computing hardware is a stable revenue stream with very little risk of drying up over a very long time horizon.
I think the difference is urgency. They probably do know that the golden eggs will stop coming at some point, but they don't believe it'll happen for a long while. Perhaps as a consequence of this, they very rarely commit to projects in a life-or-death way. At this point it's a HN trope to state this, but I do believe the reputational damage done by this lack of commitment to any of its fledgling projects is doing massive harm to Google's ability to find new revenue streams.
I was at a series B startup that did 15% layoffs during the first pandemic wave. The result: we moved faster, code quality went up, morale increased over time. Some layoffs are driven by necessity, and some are opportunistic ways for companies to retool and mass-fire low performers.
This applies at higher levels of abstractions too. When google did their layoffs, multiple entire unprofitable teams and business units were eliminated. It doesn't matter if "they could pay for it". They had an opportune excuse to remove some ugly looking lines from the balance sheet all at once and they took it.
It's impractical for them to try to differentiate high and low individual performers at that scale. No matter how talented you are, you were contributing to a loss-making part of the company.
Apple seems to have been better at not having useless teams and divisions. Tim Cook is a disciplined guy, so I'm not surprised.
Given that the evaluation of who to cut is made by outside groups, in a short period of time, without appeal, it seems more likely that layoffs in these cases are less about cutting low performers and more about getting rid of people the company is mismanaging, or people that the company is overpaying. Without changing that mismanagement, the result won't be a better environment. The message to employees is rough also: "don't trust our performance evaluations".
Maybe the investments weren't successful or didn't pan out, but that is not to say they didn't invest.
The problem is the culture. Google is an exceptionally poorly managed company as a rule I claim this is by design from the beginning: as an engineering meritocracy, the technically best ideas won (over time) and employees voted with their feet. That doesn't scale. I'd argue that it began to fail pretty dramatically around the time Diane Greene took over Cloud and Prabhakar moved over (you could probably also argue that those org changes were lagging indicators, and the real start to the "problems" began when Ruth was hired) to run Ads/Search. As the board became increasingly business focused, the lack of solid management or even strategic leadership became more problematic.
What's rule #1 of B2B? Being responsive to your customers' needs and acting predictably. The lack of top-to-bottom management combined with the legacy meritocratic culture have not lent themselves to the same sort of command-and-control hierarchy you see at places like Apple & Microsoft, both of which have been almost entirely market driven for decades.
If you look at this[1] org chart cartoon from about ten years ago, you see what things looked like then. You had the Cult of Jobs at Apple, where a singular leader compartmentalized the entire company. You see the Sales & Marketing driven Microsoft, where Ballmer created stupid internal coopetition, and you see the insane messes at FB & Google. I suggest these are no longer accurate representations. As all of these big tech businesses have matured, everyone is converging on Amazon's & Oracle's command & control model, which is the traditional strategy for managing large organizations. It has been easier for some to get there (MSFT, for example, just had to remove the "guns" from their org chart), but at places like Google & Facebook there are fundamental changes that are required for the corporations to run efficiently that are also orthogonal to the founders' principles of how things should work, and (in my opinion) what you've been seeing in the past few quarters are "light" attempts at dealing with that. For Google it was the "cut off your nose to spite your face" 12k layoff. For FB it was a more existential staff cut but also the more recent notice to middle management that many of them are expected to become ICs again, to remove redundant layers.
I don't think it's in Google's current culture to "turn the ship quickly". Frankly, under the circumstances, I think the only way to legitimately force this would be to divorce Ads from the rest of the business (or even just make it its own Bet). Anything else will likely fail, slowly, and feel like death by a thousand cuts for the rank & file and like pushing a string uphill to the leadership.
[1] https://ritholtz.com/2013/07/organizational-charts-of-amazon...
1: https://twitter.com/workmj/status/1595324607984271360
I think I found the full interview on YouTube [1] Managers: From Italy to Top Global Businesses. Luca Maestri, CFO of Apple
1: https://www.youtube.com/watch?v=rHWwq5--nEw
Apple relies a lot on contractors. Those 2 IR folks likely have 2-3 comms firms on retainer. Those 7 treasury folks likely have an entire team staffed at a major bank.
Some companies decide to source labor in house, others don’t.
distribution/warehouse problem and over hiring problem are two separate problems.
i will explain overhiring problem.
from 2018 to 2021 many amazon executives and director leave company. this continued in 2022.
these “tech” leadership very hands on..strong technical acumen. they have vision..manage people..understand business..understand the tech and how to scale.
these people not perfect. under them it very hard burnout factory of place to work. good chance if you work here you need therapy.
these people all start leaving.
they replace by “professional” managers. professional manager has one goal: grow headcount and build empire so they get promoted.
entire teams exist with no valuable output. team of 8 people supporting a service built 10 years ago maybe doing patching like replace outdated java log4j library and redeploy. no feature work. entire team can be fired and service ownership could be given easily to some team doing feature work in another space.
this problem happening all over amazon. innovation at amazon is on how to increase revenue. what they do is hire mba grad, put pressure on them to deliver. Mba grad does obvious shitty thing… let show more ads. if you see amazon.com and search it is now flea market but before you buy any cheap trash first you see walls and walls of “sponsored” recommendation or what is actually fucking ad.
it a massive grift.
amazon need Bezos to return like bob iger do at Disney. jassy only focus on aws
Apple could layoff 4% in a week and these same analysts will try to explain why there was no other way
Highly unlikely: https://9to5mac.com/2023/02/02/apple-layoffs-tim-cook/
Its suboptimal to explicitly telegraph layoffs from an employee morale perspective. As leadership, its better to ask for forgiveness after the layoff than to ask for permission to lay off.
They may actually get through this without laying off, but its certainly not guaranteed just because the CEO says "no layoffs."
More seriously, I realize this is just clickbait, but I wonder how you could determine objectively which approach (hiring slow and needing to catch up, hiring medium, hiring fast and needing to fire) is “better for business”. Seems very hard to control variables.
If we follow one path all the way to the end: If you can bring on a large number of people, then you can potentially evaluate them as "up-and-coming" high-quality talent. Those talents can be soaked in your business and technology stack, and become internal experts. Over that talent's life within the company, you may also underpay them relative to bringing in the same equivalent 10+ year veteran and training them on your internal assets.
On another path: You can also develop a broader population of mid-grade, quality talent which can strength workforce resilience.
During the mass layoff, procedures are different, and you may not have to follow quite the same fire-process as with an individual, and without some of the individual recourse processes regarding discrimination.
FWIW, Microsoft used to (still does?) had a certain percentage of layoffs every year. In a good environment, it's weeding; in a bad environment, it culls good talent.
Yes, I consider it good management and judgement. Apple is a company, not some charity. Amazon, etc didn't hire out of the goodness of their hearts they felt they could capitalize on something that didn't materialize.
Well, maybe don't be mad at anyone. Aside from a small number of true a-holes, the vast majority of people are all stumbling along doing the best they can and trying to make the best decisions they can. Yep, sometimes we humans don't make the best decisions. Sometimes we do dumb things. But at the end of the day, I personally believe most of us are trying to do the right thing. If that wasn't true, our society would rapidly descend into chaos.
As for me, I'm trying not to be mad at anyone. You do you I guess.
It's so exhausting too.