I'm curious why do these company just don't freeze hiring instead of such huge cuts that have been shown to be expensive and morale killing?
You start firing people, people start refreshing their CV instead. Cooperation at work dies, toxic competition takes its place. It becomes more important to look better than your peers than getting stuff done as a team.
Kills morale, kills productivity, bad for the future. Instead by simply freezing hiring you could "remove" a similar amount of workers in 18/24 months just by the natural turnover that most tech has without the correlated drama.
Silicon Valley has been hiding a dirty secret for years: Many companies, if not the majority of them, are badly mismanaged.
This is really going to be the start of the next big shift in who will be the leaders in tech. Many companies that are seen as leaders today will eventually join the group of companies that are no longer seen as leaders.
It was easy to look good when the money printer was churning out negative rates and you could rely on investors to pump money in you instead of actually turning a profit. A couple of years ago you could literary close your eyes, put your finger randomly on some no-name company and if you invested in that company you'd get great returns because everything was going to the moon.
Now we're gonna see which companies are actually sustainable and which were coasting on dreams and cheap money.
IMHO such a correction was long overdue, but the central banks kept negative rates for far too long while everyone cheered them one because they saw their crypto, stonks and housing portfolios go to the moon and though this was great and nothing bad could happen because "line always goes up".
1. Many of these companies had year+ long hiring freezes as a prelude to layoffs
2. Companies that overuse hiring freezes end up promoting over hiring in periods where there is open hiring as teams hire in anticipation of not being able to in the future when they might need to
Also 3
If you have a need for hiring, it is likely for a higher priority project in need of a skill / domain you don't have free resources for internally.
Simply having a hiring freeze means you hamstring high priority projects you'd have allocated resources for, while letting others that may lower priority ride due to inertia.
HashiCorp is a public company and their quarterly report yesterday was a major disappointment to investors.
Layoffs are a signal to the stock market that management is taking the problems seriously and cleaning house.
Look at Meta’s stock price. It crashed in 2022 right up to the first layoffs in November. That’s when Zuckerberg declared efficiency is a primary concern. The stock has nearly tripled from November.
I mean, passing around leeches and bleeding everybody, while performing occult rituals would also be a sign they’re taking the problems seriously. That is separate entirely from whether it’s irrational self sabotage or not
Spot on. Layoffs barely save a dime in software behemoth like Google. Barring few startups that overhired in pandemic, it all boils down to this management tokenism.
If everyone is hiring and you don't, your shareholders will think you're not doing a good job. If everyone is laying people off and you do, shareholders will think you're making tough choices.
I really think that there isn't a rational reason for doing so, it's just CYA all the way up.
IMO apple has been the notable exception Cook is easily the top CEO of the valley. Its honestly impressive how well Cook was able to keep the company moving after jobs stepped down.
It’s just doing business within your current budget. Everybody knows projections and hence budget will change but rules are such that until they don’t you’d better lock in what you can.
In many cases it’s “non tech in tech” being fired. They are still recruiting engineers, they probably won’t recruit more non tech this year
When the Twitter drama started yesterday I searched LinkedIn for posts from hashicorp employees announcing they have been cut. In the first hours it was recruiters, project managers, and customer success people
My guess is they will also freeze hiring more recruiters
Another point is there used to be natural attrition in tech, during the great resignation it was even higher than normal. You plan ahead assuming some people will leave, and when things get bad and no one leaves, you’re stuck with more people than you budgeted for
I can think of two reasons.
The company is approaching negative cashflow and needs cuts to remain solvent, or reportable results are tracking below market expectations and announcing cuts will appease shareholder concerns.
I know at least some mildly incompetent people that were hired in medium to senior positions at Hashicorp. It's not unique to Hashicorp, but basically by just being in the valley you were immediately guaranteed high paying jobs against much more competent peers. Yes this might be problematic, but a lot of these people should never have been hired in the first place.
Unfortunately there is something extremely toxic about VC money(not saying it applies to Hashicorp) which is that growth is defined in headcount.
I sort of cynically assume that the layoff takes the subsequent attrition into account. Like I imagine they actually wanted to cut 10%, so they do 8% and let attrition take care of that remaining 2%.
That's not cynical - that's just realistic management.
If you are current at headcount X and want to be at headcount Y by the end of the year, you don't let go X-Y people: you need to take into account the expected voluntary attrition for the year as well as any critical hiring you may need to do.
It does seem like mismanagement to me. Certainly there are some exceptions, but relying on layoffs to manage costs isn't free and depending on how it's done just violates the "treat people they way you would want to be treated" principal. That's not free, enough of it changes culture, and workers will adjust how they behave in a cut-throat environment. It will cost companies eventually in various dings to productivity.
I don't know about HashiCorp in particular, but usually, there's enough metrics for a company to see that they are headed into an overstaffing situation and work to correct that without layoffs. A true hiring freeze combined with natural attrition rates goes a long way. It varies, but a 5-15% for attrition is pretty common. And you can offer incentives for early departure to bump that up.
Also, depending on industry, there are other levers to reduce cost or boost margins that you could pull before resorting to layoffs. Including both labor and non-labor levers. Layoffs often feel like the lazy path.
I don’t disagree, but turnover is also subdued in a soft market, therefore the strategy is less efficient. I also assume some layoffs from others may have created an attractive pool of candidates that will be much easier to attract from a lower baseline. Regardless, this does have impact on morale as discussed here and further down the comments, and to some extent is raising alarms for customers too. I.e. what does that imply for the level and quality of support I will be receiving as a paying customer. Big customers do need both financials and growth due diligence before committing on a contract and that event may play well on one side of the equation less so on the other.
It isn't unusual for turnover to be much lower than 8%.
Having said that, I mostly agree with you. If they are selling the market on growth, there's no way to do that while simultaneously letting go 1 in 10 workers purely due to cost.
They get more completed work out of the engineers they "over hired" before they have to let them go. Then they'll move 3 cheap engineers to maintain that shiny new product that 30 laid off engineers built.
It does, but temporarily. If layoffs caused terrible, permanent, irreversible, core damage to a company, then companies would stop doing them. But they don't. It's not new, it's part of the up and down cycles of markets.
If we don't like layoffs, then we should also not like crazy hiring sprees either because of their recklessness and waste.
Many of them froze hiring last year in the summer and fall (Amazon, etc. definitely did a freeze). It's just that a freeze rarely makes the news like a layoff.
Moving people around isn't easy - teams aren't likely to willingly let go of their most competent employees, and when they do, the timelines they give for such a move are often months as they wind down that particular resource.
Additionally from the perspective of employees - you are taking on most of the burdens of job change - learning new technology, having to familiarize yourself with new people, organization - without the benefit of a higher salary.
Because corporate leadership is paid to Do Something (TM) so stock gamblers can spin yarns about how the fundamentals changed so you should overpay for their Magic Beans Inc shares.
First, employees aren’t fungible. Some teams will expand, others will contract. Second, the recruiting apparatus needs some baseload to healthy operations for when the tide swings.
Why do you think all layoffs are morale killing? The first people a company lays off are usually the least performant/useful/valuable. I wouldn't mind at all if all slackers at my company got booted.
>The first people a company lays off are usually the least performant/useful/valuable
Quite naïve to assume this. Speaking to the most recent round of tech layoffs at my workplace, the higherups said repeatedly it's not based on performance. They didn't elaborate on the methodology at all. We had people who had just been promoted get fired, and we had people who were long-time employees and high performing get fired.
Come on, you have to really try to create a narrative where having a set of plans which are done with a set of people to do them and then you remove some of those people and it doesnt disrupt those plans.
People don’t like surprises, and they don’t like having plans messed up.
Just because you, personally, might have a role where you (?) aren’t part of plans or don’t do planning doesn’t mean that broadly speaking, you reflect the average of the teams in your company.
It’s far far more likely that if you dont care about your coworkers, you’re an outlier.
While it seems like the most rational approach, it isn't. Companies don't typically include many employees in an improvement program, so when 'low performers' who haven't been covered by such a program are laid off, the remaining employees start to question the fairness of the performance evaluation and the company's commitment to its employees. [1]
The whole industry switched to stack ranking. I wonder what potential long-term effects could emerge.
It is somewhat tiring but Gergely Orosz continuously makes the naive mistake of citing the company values as a critique of their behaviour. Taking a lesson from the "realist" perspective in international relations, companies are acting rationally. They are protecting their own interests. Both in espousing values they may not actually hold, and in dispatching with unwanted workers swiftly. In a high interest rate regime and with downturn in the market it is entirely rational for tech companies to shed workers with this sort of clinical brutality. That's why we've seen so many do it. On the other side of the balance under low interest rates and a booming market, we also see tech workers playing off companies against each other to improve their compensation or even slacking off work. This is also rational.
This kind of moralizing has become the bread and butter of his Twitter brand and it really is tiresome.
This argument boils down to: Companies can't be criticised for using values for marketing with no intent to abide by them because it makes market sense to be ruthless
The problems with this idea:
1. It misses that morals can be criticised not just legality, and as economically advantageous as it is, it is still unethical to decieve
2. Even in a totally cold economic sense, the criticism you get if you go back on them is itself a risk that these companies should have considered when they produced these marketing values. This blowback should be an economic disincentive against acting that way in the future if it decreases trust in the company. This may materialise in economic effects as less free overtime and higher wage demands from prospective employees who adopt a similar ruthless attitude.
> Companies aren't the kinds of things that can meaningfully have values, and 'criticism' along the lines of the OP takes for granted that they can and do, in a way that makes outcomes like this Hashicorp layoff meaningfully surprising. This gets in the way of the correct critique— and thereby in setting the correct expectations.
The moralistic tone makes the event described seem somehow exceptional, when the crucial lesson is that it is not at all. It also directs people towards a useless simulation of politics (yelling at people, or in this case companies, to scold them) in place of the real thing (fighting institutions by disrupting their basic functioning, exercising power to change incentive structures, etc.). The stress on the economics is about directing people to the information of strategic significance, not narrowing the bounds of acceptable critique per se.
This take is infinitely more naive. Everyone knows that companies act in economic self-interest. That's not the point of contention or where the discussion is situated at all. Orosz is knowingly evoking social and moral frameworks, rather than self-oriented economic ones, for evaluating these actions.
It might aid your understanding to consider that while companies behave out of economic self-interest, socially conscious human beings have their own vested interest in highlighting behavior that falls short of social standards. Companies like HashiCorp generate brand capital by co-opting the language of human values and social cooperation. It is not unexpected that people would try to hold them accountable to their own positioning on values.
I agree with your retort. It's totally fair to call out a company when they contradict their own core principles. I just wanted to add (and this doesn't contradict your point), none of us should be surprised when a company's core values are performative. I think it's naive to see any of this as surprising.
> naive mistake of citing the company values as a critique of their behaviour
> companies are acting rationally. They are protecting their own interests. Both in espousing values they may not actually hold
A value is only a value if you'll follow it against your own "rational interests". Claiming you hold a value and then ditching it as soon as it's convenient is a form of fraud. Not one necessarily with monetary damages, but fraud nonetheless.
Western society has got quite a lot out of being generally high-trust and it is not good whenever anyone corrodes it by making cynical promises which they do not intend to keep, and it is right to shame them for this.
> society has got quite a lot out of being generally high-trust
I agree. The vast majority of times you pass someone on the street and don't expect that person to turn around and stab you in the back and take your wallet, is not because of the existence of laws, but because of the existence of trust. Laws (particularly criminal code) must exist for the minority. This is one of the reasons why I hate "trust-less" systems -- societies cannot function that way. It's as if a program was not trusted to access even the memory that was allocated to it, and the OS had to check permissions and run validations on every single CPU instruction issued by the program. Trust saves resources.
Most useful values frameworks have inherent tension in them.
I don't work at Amazon, but their LPs are well-published, so I'll use them as an example. "Bias for Action" is in tension with "Dive Deep" and "Insist on the Highest Standards". If Amazon takes an action that is quick but didn't dive as deep as literally possible or achieve the highest possible standard, have they violated two of their LPs, or did they just use judgment and prioritize bias for action over those other two?
I think the argument is - So then don't promote BS values during boom times that are just meaningly words you have no intention of following when times get mildly non-boomy.
How are the values BS? Is there some way to encode the values as to prevent the layoff magically? Is it more kind and transparent to tell everyone at once? Or not? I think that is really subjective and situational. For some, maybe many, there is no ‘kind’ way to layoff or be laid off. I don’t know that the values become BS though, there is a lot more going on there than layoffs and they can apply those values to those things.
In this case, you're shooting the messenger. You can think that citing company values can be moralistic, but at the end of the day it's all about showing the people to not drink the Kool-aid and how ruthless the market is.
It's easy to say that the ZIRP time was the main drive of this decade for the crazy market where we are, but let's not forget that most of those companies lured people and part of the market based on some misleading "employer branding" optics like transparency, being a great employer, autonomy, inflated salaries, distorted incentives and so on.
They are co-responsible for these shaky times as well also.
Presumably, this company will want to hire again at some point in the future. At that point, people will look back to now, and some will go “perhaps not” RE the poor handling of layoffs. If nothing else, this stuff doesn’t happen in a vacuum, and one might be forgiven for assuming that if they can’t do layoffs properly, they are likely poorly run in other ways.
Personally if I was looking for a job I’d be sceptical of potential employers who handled layoffs notably poorly; it’s just not a great sign of their general competence. There’s nothing rational about advertising that you’re bad at this stuff.
Companies are run by people and their goal is to provide services to people. In general, the goal of the economy should be to serve the people, not the companies! If a company does fucked up immoral things, it will hurt their bottom line eventually, especially if they are called out. They would not try to look good if this was not the case. Some people will just refuse to use their services because they are aware the suffering some of these companies are causing. There is nothing naive about this, in fact I find the rationalization of the fucked up self-serving logic of these companies absurd and insulting.
Their goal is to make as much money as possible. "To provide services" is just a way to get there.
> fucked up immoral things, it will hurt their bottom line eventually, especially if they are called out
There are literally thousands of examples where this is not true, and where the "hurt" comes long after the fact, if ever (DDT, PFAS, plastic, oil extraction, deforestation, animal agriculture, ...).
> try to look good if this was not the case
Hence the popular term "wartime CEO" ... painting the situation with nice words to extend the extraction period.
Yea he seems to have really double downed on the more gossipy side of tech. I don’t understand the play (outside of sensationalism), and I’m starting to lose faith in his brand.
I don't say this pretty much about any person, but I can't stand Gergely Orosz. He was a line manager at Uber EU, and makes notes of his time there like he was SVP in Silicon Valley
He speaks of broad terms of "how things worked", like - there are thousands of EMs and Directors right here on HN with triple his experience who can only speak to their team/group/division, would never act like they know what happens on other engineering teams outside their org.
Other than his "expertise" his newsletter is pretty much the same as browsing Blind. Getting DMs from people with their personal opinions about their employer (im sure he doesnt even verify that) and reposts them
> It is somewhat tiring but Gergely Orosz continuously makes the naive mistake of citing the company values as a critique of their behaviour.
Orosz being Naive or not, there is a contrast to what Reid Hoffman and Netflix have been advocating. Hoffman advocated that a company and its employees form an alliance. When their values deviate, they depart. Netflix advocated something similar using the professional sports team as an analogy. Companies are not families. Companies are not there to "take care of" people. At least to me, the Hoffman and Netflix are more practical and more honest.
corporate "values*" always come with the small print of "*as long as it maximizes profit."
it is silly to think that any for-profit corporation is ever going to do something that is directly contrary to its financial interests.
you can (and i do) definitely argue that having strong values does contribute to long term profitability, but the purpose of the "values" is to maximize profit.
when a conflict arises between the values and profitability, profitability always wins.
The way US companies do these kinds of layoffs staggering. In the UK redundancies are announced, the areas of the business to be impacted are informed, there is a review period of a few days to a few weeks, you are then told you are being made redundant or not, you then have a chance to propose an alternative role if you wish and if you’re still being let go you will be told a date and a process put in place for exiting. At a large company this process can take a couple of months and the steps are made very clear and transparent.
This just means a lot of these people wouldn’t have a job to begin with.
Not saying one is better than the other, but if it took months to fire people, lots of US tech companies wouldn’t have grown 30% without thinking twice. Leaving many of then people let go today without an entry ticket to tech to begin with
Just to be pedantic, in the US there may be little difference between being laid off and being fired, but in the UK there's quite a difference. We're talking about layoffs/redundancies, and yes it's hard specifically to discourage these poor labour practices.
However in the UK firing someone is much easier than this. There are protections, and in some jobs (like the civil service) it can be difficult to fire, but that's not universally true.
That same argument could be made about lots of worker protections, from safety controls to minimum wage standards.
Greater worker protections leading to greater stability rather than a boom and bust over-hiring and mass lay-offs sounds like a feature, not a bug, to me.
>, lots of US tech companies wouldn’t have grown 30% without thinking twice
So what? Apparently that didn't work in any way, since their stocks are crashing and they need to mass fire. So what's the benefit of what you are saying at all?
And why would 30% growth be some goal just because its a high number, compared to a stable job market?
Let’s not forget to mention the very common practice here of taking away projects, making your job worse, reassigning you to a manager you hate etc to make you quit.
UK HR teams aren’t staffed with angels and in my experience are great at feigning ignorance of the law
And the government did not condemn fire and rehire by BA etc a couple of years ago
This is not universally true in the UK. My employer laid off about 10% during the current downturn, and those impacted found out quietly, while everybody else was left to wonder why people were suddenly no longer in the employee directory.
There is a requirement to have a "group consultation" in the UK if 20 or more people are being made redundant which often means the process is relatively well telegraphed. But the "group" which must be consulted with is only people who are at risk so it can still happen relatively quietly if redundancies are limited to a certain team/etc.
> If there are 20 or more employees affected by redundancies, your employer must hold collective consultation.
Of course, it relies on affect people knowing their rights and being willing to stand up for them, which isn't always easy, especially if you're not being let go.
And in the USA, unemployment is really low, and is usually lower than other countries in most economic climates. Investors are more prone to invest in new or expanding companies when the leadership is able to protect their assets faster by shedding costs in the event of a downturn. Wish we had a better healthcare safety net for people, but overall, I think our system is better.
After a few cycles on Wall St tech, what I cynically observe is this:
Individual firing takes months, and up to a year, with management papering the decision and only doing so during certain times of the year around the review and compensation cycle. Sort of like the FAANG PIP process. The person being fired still ends up getting severance, etc, they almost never bother with for-cause due to legal burdens. Quite often no one really gets fired but they play chicken with you by giving zero raises and cutting your bonus until you quit.
Mass layoff firing is usually announced and followed through on in weeks. Usually they go after low hanging fruit, but often that might just be out of favor teams/departments/divisions more than just poor individual performers.
It really puts weird incentives in place for people who might want to skate. If you do a bad job - you have many warning signs before you are fired, if ever. And then everyone has an equal risk of random layoff.
People don’t all have an equal risk of a random layoff. There’s some baseline, non-zero, random risk for everyone, upon which is added/subtracted a factor which is individual in nature.
On a team of 15 laying off 2, do you really think that the highest performing employee has an equal risk as the newest joiner or the lowest performing employee?
The way US companies do these kinds of layoffs betrays the undeniable immaturity of the United State's "leadership class". All rah rah rah until it's anything negative, and then they are scared little boys and girls, hiding the truth.
What makes you think all US companies are like this? A lot of non tech roles were made redundant at my last job, affected people had a 90 day notice and if they stayed the 90 days a hefty severance based on years worked.
My current company does it similar to what you said and gives you time to find a new role or relocate.
The first company I worked for called people into a room and RIFed them out of nowhere. People still got hefty severances.
It’s not a one size fits all approach, start up’s are usually less caring and ruthless with layoffs.
Switzerland has also liberal labour laws and people can usually get fired with either 1 month or 3 months notice. This kind of flexibility in the labour market is clearly an advantage because the US and CH have some of the highest salaries and lowest unemployment in the world.
> This kind of flexibility in the labour market is clearly an advantage because the US and CH have some of the highest salaries and lowest unemployment in the world.
It really is quite a big stretch to assume that this is a causal mechanism. You only need to look to Scandinavia to find a counter-example.
I think it is more reasonable to argue that high salaries in US are fuelled by borderline slave wages for menial labour. And Switzerland's wealth comes in a historical context that is completely different from the US - it's almost impossible to blanket compare them side-by-side. The difference in population size is another huge issue with such a comparison.
Swiss labour laws are a bit more involved than that. You can fire with 3 months' notice, yes, but not if the employee has recently been unwell or had an accident, and not for any number of legally protected reasons (including the employee being absent for mandatory military service, employees exercising their legal rights such as freedom of speech in ways not directly related to the workplace, or as a result of a dispute between employer or employee if there was no misconduct). Full list (in German): https://www.seco.admin.ch/seco/de/home/Arbeit/Personenfreizu...
So effectively, the burden of proof is on the employer to show that the reason for firing is a legal one, but that does include "orders drying up so we need to cut back on staff who would otherwise be idling".
Courts can and do award fired employees up to 6 months' salary as compensation if employers overstep the lines here. And because Switzerland has a well-working legal system, that means most employers don't abuse their firing powers, and making a facebook post on $CULTURE_WAR_TOPIC from a non-work account is unlikely to get you fired unless your role is "brand ambassador" or executive officer, for example.
Also, if you are fired in Switzerland and you're a citizen, you have very generous (by international standards) state redundancy/unemployment benefits.
I agree with the parent poster that the flexible labour laws are part of what makes Switzerland attractive for business, but I would much, much rather end up being fired under the Swiss system than the U.S. one.
That may be permissive in international terms, but it’s a huge protection for workers compared to the US. You are not guaranteed any days warning in the US.
France, a country famous for workers protections, also allows for:
* rupture conventionnelle, by mutual agreement, which requires at least 1/4 month salary per year on the job for less than 10 years, 1/3 month for more than 10
* licenciement économique, which has a mandatory procedure, and requires 1-2 months notice of the employee, with a compensation same as the above
Since the procedure for the second one is a bit involved and requires approval from the mini-union embedded in all companies over 50 employees and a government agency (since it's only intended when there's economic troubles), often employers would prefer to pay extra compensation in a rupture conventionnelle instead of wasting time with the procedure.
Honestly doesn't sound much more complicated than Switzerland, yet nobody would say this allows France to have low unemployment.
> This kind of flexibility in the labour market is clearly an advantage because the US and CH have some of the highest salaries and lowest unemployment in the world.
Post hoc ergo propter hoc. There are plenty of other reasons that the US and Switzerland have become wealthy, you can't simply assume that liberal labour laws are a factor.
I think it's a bit of a stretch to compare the 2
I don't think the US has any period of notice
Switzerland has many benefits US definitely don't get, like holidays
Strong unions in Switzerland fight to keep wages up
Premise: not referring directly to Hashicorp employees, as I'm sure they're leagues above my average colleagues.
As a SWE who's been in a couple of companies of small-to-medium size, and now in a relatively successful fintech scale-up that's running a (very long) hiring freeze, I can say that I've seen this layoffs season coming from a thousand kilometers.
Now matter how successful your company is, you can't start hiring bonobos with no clue about how a computer works just because your investors asked for an X% increase in head count and then be like "sorry, we didn't plan to fire you as soon as things got serious" with clueless employees. And people have been gifted tech jobs for years now.
It's not people's fault if they're not good at their job yet they get hired for senior positions, just to realize something's not working as soon as the job market needs qualified professionals in tough times.
Now we're all in a bad predicament: we have to waste countless hours interviewing "senior" engs with basically no skills to speak of, and they are getting depressed because nobody's gifting titles anymore, but have no clue on how the whole process actually works.
Now somebody has to tell Jessica that posting screenshots of code on Twitter is not devrel, and Guillermo that not knowing React 18 is not totally ok for a tech lead of a React shop. And I totally don't want to be that guy.
I ran into the opposite situation. The people they hired were pretty good, but like you said the VCs gave the CEO a headcount target to hit in engineering and he did it because I guess the VCs are the ones calling the shots.
Instead of just being honest and saying "oops, we need to cut spending, they created bullshit KPIs and useless metrics to start marking people as underperformers"
So I suspect a lot of the VC funded companies have had 10%+ stealth layoffs.
"He who pays the piper calls the tune" is a saying that's over 400 years old. If your company is depending on VC funding for ongoing survival, the VCs are calling the shots. If your company is generating its own sustainable cashflow, the CEO is in a much stronger position to call the shots.
KPIs are also killers of quality. I just planned a tech migration that the whole tech team agreed on, and that would bring countless advantages to the company, that got ultimately rejected by higher-ups just because "it doesn't fit into your (mine) semestral KPIs".
KPIs are a good way to make sure nobody overperforms or shows signs of cross-functionality. The moment KPIs take over a company, people get turned into bots.
Yep. These are basically the people that never bring any value during incident response or when any crunching time needs to be put in. The problem with title inflation is that on a surface level they’re indistinguishable from actual professionals, so there’s no way to skip the interviewing part.
I understand the frustrating experience you have had but I tend to consider the underlying problem to be leadership recruiting/hiring in the situation you described. Like it's not your fault your leaders are unwilling to correct their hiring mistake and needs wait for a company wide layoff as an excuse to put their foot down. That is just terrible leadership all the way down.
"HashiCorp just let go 8%. Investors listening to earnings heard it before most employees." As much as I can empathize with the employees let go (it sucks), Hashicorp has a legal duty to inform investors of material information like this as soon as it becomes public, so it is normal that employees learn this way. There are a bunch of things that can be done better (or worse) handling layoffs but this one is hard to get around
In Germany, a termination is valid IFF the termination has been submitted to the employee in writing in a timely manner — that is, they need to have been able to receive it before end of month or it’ll delay the notice period by a month. The standard notice period is 3 months. (I had to do this quite a few times recently unfortunately).
To be fair, I've submitted multiple requests for a fristlose Kündigung in Germany and never had it declined. Unless your role is absolutely critical to the company and a replacement must be thoroughly trained, most employers would be happy to oblige. As it turns out, it's expensive for the company to keep paying someone who's effectively "checked out" for 3+ months after they submit notice.
Readit News
You start firing people, people start refreshing their CV instead. Cooperation at work dies, toxic competition takes its place. It becomes more important to look better than your peers than getting stuff done as a team.
Kills morale, kills productivity, bad for the future. Instead by simply freezing hiring you could "remove" a similar amount of workers in 18/24 months just by the natural turnover that most tech has without the correlated drama.
This is really going to be the start of the next big shift in who will be the leaders in tech. Many companies that are seen as leaders today will eventually join the group of companies that are no longer seen as leaders.
Now we're gonna see which companies are actually sustainable and which were coasting on dreams and cheap money.
IMHO such a correction was long overdue, but the central banks kept negative rates for far too long while everyone cheered them one because they saw their crypto, stonks and housing portfolios go to the moon and though this was great and nothing bad could happen because "line always goes up".
to be fair, this is likely the case for most large companies even outside SV.
You just have to talk to anyone in any industry to hear crazy stories.
1. Many of these companies had year+ long hiring freezes as a prelude to layoffs
2. Companies that overuse hiring freezes end up promoting over hiring in periods where there is open hiring as teams hire in anticipation of not being able to in the future when they might need to
Simply having a hiring freeze means you hamstring high priority projects you'd have allocated resources for, while letting others that may lower priority ride due to inertia.
Got myself a call from some Meta recruiter just a week before the announcement in November.
And HashiCorp had opened positions listed on their site too.
Where are these companies you speak of?
Layoffs are a signal to the stock market that management is taking the problems seriously and cleaning house.
Look at Meta’s stock price. It crashed in 2022 right up to the first layoffs in November. That’s when Zuckerberg declared efficiency is a primary concern. The stock has nearly tripled from November.
I really think that there isn't a rational reason for doing so, it's just CYA all the way up.
When the Twitter drama started yesterday I searched LinkedIn for posts from hashicorp employees announcing they have been cut. In the first hours it was recruiters, project managers, and customer success people
My guess is they will also freeze hiring more recruiters
Another point is there used to be natural attrition in tech, during the great resignation it was even higher than normal. You plan ahead assuming some people will leave, and when things get bad and no one leaves, you’re stuck with more people than you budgeted for
Unfortunately there is something extremely toxic about VC money(not saying it applies to Hashicorp) which is that growth is defined in headcount.
If it’s hard and/or expensive to measure, it’s likely better to just grab another startup instead.
If you are current at headcount X and want to be at headcount Y by the end of the year, you don't let go X-Y people: you need to take into account the expected voluntary attrition for the year as well as any critical hiring you may need to do.
I don't know about HashiCorp in particular, but usually, there's enough metrics for a company to see that they are headed into an overstaffing situation and work to correct that without layoffs. A true hiring freeze combined with natural attrition rates goes a long way. It varies, but a 5-15% for attrition is pretty common. And you can offer incentives for early departure to bump that up.
Also, depending on industry, there are other levers to reduce cost or boost margins that you could pull before resorting to layoffs. Including both labor and non-labor levers. Layoffs often feel like the lazy path.
Maybe just maybe they're aligned with the shareholders' very short term interests, but not with anything useful in the long run.
Having said that, I mostly agree with you. If they are selling the market on growth, there's no way to do that while simultaneously letting go 1 in 10 workers purely due to cost.
The market response seems inevitable.
Deleted Comment
If we don't like layoffs, then we should also not like crazy hiring sprees either because of their recklessness and waste.
How do you know they haven't had a hiring freeze?
Additionally from the perspective of employees - you are taking on most of the burdens of job change - learning new technology, having to familiarize yourself with new people, organization - without the benefit of a higher salary.
Dead Comment
Quite naïve to assume this. Speaking to the most recent round of tech layoffs at my workplace, the higherups said repeatedly it's not based on performance. They didn't elaborate on the methodology at all. We had people who had just been promoted get fired, and we had people who were long-time employees and high performing get fired.
People don’t like surprises, and they don’t like having plans messed up.
Just because you, personally, might have a role where you (?) aren’t part of plans or don’t do planning doesn’t mean that broadly speaking, you reflect the average of the teams in your company.
It’s far far more likely that if you dont care about your coworkers, you’re an outlier.
The whole industry switched to stack ranking. I wonder what potential long-term effects could emerge.
[1] https://www.businessinsider.com/layoffs-use-cut-low-bad-perf...
This kind of moralizing has become the bread and butter of his Twitter brand and it really is tiresome.
The problems with this idea:
1. It misses that morals can be criticised not just legality, and as economically advantageous as it is, it is still unethical to decieve
2. Even in a totally cold economic sense, the criticism you get if you go back on them is itself a risk that these companies should have considered when they produced these marketing values. This blowback should be an economic disincentive against acting that way in the future if it decreases trust in the company. This may materialise in economic effects as less free overtime and higher wage demands from prospective employees who adopt a similar ruthless attitude.
> Companies aren't the kinds of things that can meaningfully have values, and 'criticism' along the lines of the OP takes for granted that they can and do, in a way that makes outcomes like this Hashicorp layoff meaningfully surprising. This gets in the way of the correct critique— and thereby in setting the correct expectations.
The moralistic tone makes the event described seem somehow exceptional, when the crucial lesson is that it is not at all. It also directs people towards a useless simulation of politics (yelling at people, or in this case companies, to scold them) in place of the real thing (fighting institutions by disrupting their basic functioning, exercising power to change incentive structures, etc.). The stress on the economics is about directing people to the information of strategic significance, not narrowing the bounds of acceptable critique per se.
It might aid your understanding to consider that while companies behave out of economic self-interest, socially conscious human beings have their own vested interest in highlighting behavior that falls short of social standards. Companies like HashiCorp generate brand capital by co-opting the language of human values and social cooperation. It is not unexpected that people would try to hold them accountable to their own positioning on values.
> companies are acting rationally. They are protecting their own interests. Both in espousing values they may not actually hold
A value is only a value if you'll follow it against your own "rational interests". Claiming you hold a value and then ditching it as soon as it's convenient is a form of fraud. Not one necessarily with monetary damages, but fraud nonetheless.
Western society has got quite a lot out of being generally high-trust and it is not good whenever anyone corrodes it by making cynical promises which they do not intend to keep, and it is right to shame them for this.
I agree. The vast majority of times you pass someone on the street and don't expect that person to turn around and stab you in the back and take your wallet, is not because of the existence of laws, but because of the existence of trust. Laws (particularly criminal code) must exist for the minority. This is one of the reasons why I hate "trust-less" systems -- societies cannot function that way. It's as if a program was not trusted to access even the memory that was allocated to it, and the OS had to check permissions and run validations on every single CPU instruction issued by the program. Trust saves resources.
I don't work at Amazon, but their LPs are well-published, so I'll use them as an example. "Bias for Action" is in tension with "Dive Deep" and "Insist on the Highest Standards". If Amazon takes an action that is quick but didn't dive as deep as literally possible or achieve the highest possible standard, have they violated two of their LPs, or did they just use judgment and prioritize bias for action over those other two?
It's easy to say that the ZIRP time was the main drive of this decade for the crazy market where we are, but let's not forget that most of those companies lured people and part of the market based on some misleading "employer branding" optics like transparency, being a great employer, autonomy, inflated salaries, distorted incentives and so on.
They are co-responsible for these shaky times as well also.
Your freedom to do something does not stop my freedom of calling you an a-hole for doing so.
Personally if I was looking for a job I’d be sceptical of potential employers who handled layoffs notably poorly; it’s just not a great sign of their general competence. There’s nothing rational about advertising that you’re bad at this stuff.
> their goal is to provide services to people
Their goal is to make as much money as possible. "To provide services" is just a way to get there.
> fucked up immoral things, it will hurt their bottom line eventually, especially if they are called out
There are literally thousands of examples where this is not true, and where the "hurt" comes long after the fact, if ever (DDT, PFAS, plastic, oil extraction, deforestation, animal agriculture, ...).
> try to look good if this was not the case
Hence the popular term "wartime CEO" ... painting the situation with nice words to extend the extraction period.
He speaks of broad terms of "how things worked", like - there are thousands of EMs and Directors right here on HN with triple his experience who can only speak to their team/group/division, would never act like they know what happens on other engineering teams outside their org.
Other than his "expertise" his newsletter is pretty much the same as browsing Blind. Getting DMs from people with their personal opinions about their employer (im sure he doesnt even verify that) and reposts them
Orosz being Naive or not, there is a contrast to what Reid Hoffman and Netflix have been advocating. Hoffman advocated that a company and its employees form an alliance. When their values deviate, they depart. Netflix advocated something similar using the professional sports team as an analogy. Companies are not families. Companies are not there to "take care of" people. At least to me, the Hoffman and Netflix are more practical and more honest.
corporate "values*" always come with the small print of "*as long as it maximizes profit."
it is silly to think that any for-profit corporation is ever going to do something that is directly contrary to its financial interests.
you can (and i do) definitely argue that having strong values does contribute to long term profitability, but the purpose of the "values" is to maximize profit.
when a conflict arises between the values and profitability, profitability always wins.
Not saying one is better than the other, but if it took months to fire people, lots of US tech companies wouldn’t have grown 30% without thinking twice. Leaving many of then people let go today without an entry ticket to tech to begin with
However in the UK firing someone is much easier than this. There are protections, and in some jobs (like the civil service) it can be difficult to fire, but that's not universally true.
Greater worker protections leading to greater stability rather than a boom and bust over-hiring and mass lay-offs sounds like a feature, not a bug, to me.
Sounds like trickle-down risk to me, to just randomly hire and fire.
Dead Comment
So what? Apparently that didn't work in any way, since their stocks are crashing and they need to mass fire. So what's the benefit of what you are saying at all?
And why would 30% growth be some goal just because its a high number, compared to a stable job market?
UK HR teams aren’t staffed with angels and in my experience are great at feigning ignorance of the law
And the government did not condemn fire and rehire by BA etc a couple of years ago
e.g.
> If there are 20 or more employees affected by redundancies, your employer must hold collective consultation.
Of course, it relies on affect people knowing their rights and being willing to stand up for them, which isn't always easy, especially if you're not being let go.
Deleted Comment
Individual firing takes months, and up to a year, with management papering the decision and only doing so during certain times of the year around the review and compensation cycle. Sort of like the FAANG PIP process. The person being fired still ends up getting severance, etc, they almost never bother with for-cause due to legal burdens. Quite often no one really gets fired but they play chicken with you by giving zero raises and cutting your bonus until you quit.
Mass layoff firing is usually announced and followed through on in weeks. Usually they go after low hanging fruit, but often that might just be out of favor teams/departments/divisions more than just poor individual performers.
It really puts weird incentives in place for people who might want to skate. If you do a bad job - you have many warning signs before you are fired, if ever. And then everyone has an equal risk of random layoff.
On a team of 15 laying off 2, do you really think that the highest performing employee has an equal risk as the newest joiner or the lowest performing employee?
My current company does it similar to what you said and gives you time to find a new role or relocate.
The first company I worked for called people into a room and RIFed them out of nowhere. People still got hefty severances.
It’s not a one size fits all approach, start up’s are usually less caring and ruthless with layoffs.
Not complaining of course, this form of better behaviour is hugely preferable! But I think it's fear/loss-aversion, not kindness, driving it!
Maybe get your own house in order before giving friendly advice.
Also, can’t see where I gave any advice in my original post.
It really is quite a big stretch to assume that this is a causal mechanism. You only need to look to Scandinavia to find a counter-example.
I think it is more reasonable to argue that high salaries in US are fuelled by borderline slave wages for menial labour. And Switzerland's wealth comes in a historical context that is completely different from the US - it's almost impossible to blanket compare them side-by-side. The difference in population size is another huge issue with such a comparison.
So effectively, the burden of proof is on the employer to show that the reason for firing is a legal one, but that does include "orders drying up so we need to cut back on staff who would otherwise be idling".
Courts can and do award fired employees up to 6 months' salary as compensation if employers overstep the lines here. And because Switzerland has a well-working legal system, that means most employers don't abuse their firing powers, and making a facebook post on $CULTURE_WAR_TOPIC from a non-work account is unlikely to get you fired unless your role is "brand ambassador" or executive officer, for example.
Also, if you are fired in Switzerland and you're a citizen, you have very generous (by international standards) state redundancy/unemployment benefits.
I agree with the parent poster that the flexible labour laws are part of what makes Switzerland attractive for business, but I would much, much rather end up being fired under the Swiss system than the U.S. one.
* rupture conventionnelle, by mutual agreement, which requires at least 1/4 month salary per year on the job for less than 10 years, 1/3 month for more than 10
* licenciement économique, which has a mandatory procedure, and requires 1-2 months notice of the employee, with a compensation same as the above
Since the procedure for the second one is a bit involved and requires approval from the mini-union embedded in all companies over 50 employees and a government agency (since it's only intended when there's economic troubles), often employers would prefer to pay extra compensation in a rupture conventionnelle instead of wasting time with the procedure.
Honestly doesn't sound much more complicated than Switzerland, yet nobody would say this allows France to have low unemployment.
Post hoc ergo propter hoc. There are plenty of other reasons that the US and Switzerland have become wealthy, you can't simply assume that liberal labour laws are a factor.
As a SWE who's been in a couple of companies of small-to-medium size, and now in a relatively successful fintech scale-up that's running a (very long) hiring freeze, I can say that I've seen this layoffs season coming from a thousand kilometers.
Now matter how successful your company is, you can't start hiring bonobos with no clue about how a computer works just because your investors asked for an X% increase in head count and then be like "sorry, we didn't plan to fire you as soon as things got serious" with clueless employees. And people have been gifted tech jobs for years now. It's not people's fault if they're not good at their job yet they get hired for senior positions, just to realize something's not working as soon as the job market needs qualified professionals in tough times. Now we're all in a bad predicament: we have to waste countless hours interviewing "senior" engs with basically no skills to speak of, and they are getting depressed because nobody's gifting titles anymore, but have no clue on how the whole process actually works.
Now somebody has to tell Jessica that posting screenshots of code on Twitter is not devrel, and Guillermo that not knowing React 18 is not totally ok for a tech lead of a React shop. And I totally don't want to be that guy.
Instead of just being honest and saying "oops, we need to cut spending, they created bullshit KPIs and useless metrics to start marking people as underperformers"
So I suspect a lot of the VC funded companies have had 10%+ stealth layoffs.
"He who pays the piper calls the tune" is a saying that's over 400 years old. If your company is depending on VC funding for ongoing survival, the VCs are calling the shots. If your company is generating its own sustainable cashflow, the CEO is in a much stronger position to call the shots.
KPIs are a good way to make sure nobody overperforms or shows signs of cross-functionality. The moment KPIs take over a company, people get turned into bots.
Dead Comment
In Germany, a termination is valid IFF the termination has been submitted to the employee in writing in a timely manner — that is, they need to have been able to receive it before end of month or it’ll delay the notice period by a month. The standard notice period is 3 months. (I had to do this quite a few times recently unfortunately).
Are worker rights really this bad in the US?
Overall it's just different societies making different trade-offs. The US values market efficiency, Germany stability.