The same forces that enable high tech salaries, also make layoffs more likely.
- The market for talent is competitive. So companies bid up to the absolute max they can
- The market for managers is also competitive. Creating dynamics that lead to larger teams and raises for team members
- Companies allow things like remote work, which is a perk, but also has a lot of abuse in terms of how much work gets done
The end result is that if companies are spending their max, if there's a shock to the market/system etc they have to cut. You'd see this less if there was more padding/ less competitive pressure/lower salaries.
I think that's fine and the system is working as intended. People should be freed up to move to other roles where they can be productive. Your manager doesn't get upset when you leave, bit weird how people feel so differently when they get fired.
The issue is not that you're getting fired. The issue is that healthcare is attached to employment, that makes zero sense. There should also be some reasonable government provided safety net so people can reskill/learn and move to other fields.
A somewhat sensible take, but the issue isn’t just healthcare. A lot of your life is based off of long-term, fixed cost cash flow. E.g. you can’t pay less on your mortgage just because you got fired. Even with savings, getting laid off is highly disruptive, and, if done as part of a broader downturn in the market, you may never recover the required cash flow to enable your lifestyle.
There seems to be an analogy to servers being capable enough for usual demand(income>spending), but fails due to some downtime for some servers(out of a job) or peak loads(medical emergency). This can be amortized by having data centers serving multiple apps(social security, insurance - but they dont always exist).
One main fault in the analogy is that in an economic crisis, there is a vicious cycle of income loss which leads to lower demand leading to more lost jobs. This coordination failure can be handled by fiscal/monetary policy. Whereas server failure, even when widespread due to a virus doesn't happen recursively like that.
This why we need the tiny home movement combined with progressive property taxes - 0 prop tax bracket for lowest 20% property values If you have mortgage then you don’t really own your house.
honestly this is one of the reasons I prefer pre-IPO companies, my salary is lower until they do a buyback or an exit, but it ends up basically in the same place over the long term. This is how I was able to put a downpayment on a house without consciously "saving up" for it. Obviously there's some risk but I've had two buybacks, one IPO, and two acquisitions since 2012
Yeah, the stakes for the two sides of that transaction are completely different, so equivocating rational responses on either side makes no sense. OP lost me there.
Eventually we all get fired. It shouldn't come as a shock. This is why people working in volatile industries subject to boom/bust cycles should live below their means and keep at least several months of living expenses (including health insurance premiums) in low-risk, liquid investments.
I do understand that it can be challenging to save for young people with student debt starting out in a HCOL area. But I see older tech workers who ought to know better buying luxury cars and fancy gaming PCs and taking exotic vacations. Good luck to them when the next recession hits.
The idea that someone's response to being fired should be the same as a manager's response to one of their reports quitting is hilariously out of touch.
It kind of ignores the core asymmetry of capitalism, that those with the capital are the ones with the power. Nobody can do a background check on a company to see who they laid off or fired before they work there.
> bit weird how people feel so differently when they get fired
That doesn't seem the least bit weird to me. If I choose to leave a job (or relationship), I could quite sensibly feel differently if that same job (or relationship) chooses to leave me.
Are they really high? They are not that different from UPS driver salaries.
Just the other day I clicked on the website of some random law firm's career page. I wasn't happy with what I saw (in the context of my own career). Some researchers with 1 year of experience with starting salary of 450k+... tech salaries look high as long as you don't check other professions.
This doesn't really make sense. What is a "researcher" at a law firm? Lawyers at top firms are on fixed pay schedules, starting at 180k as a 1st year going up to something like 450k after 8yrs (?).
Tech is high earning. It gets beat out by high finance and partner-level roles in e.g. law though. If someone is earning 450k in their first year it's probably similar to a quant finance role.
They are not high. But most companies have business leadership who sees software developers as annoying and weird nerds. Explains why they are spending all their money on compute so that they can replace them with machines once and for all.
FYI, Dropbox does not merely allow remote work, it's a fully remote-first company. There's a couple of offices for get-togethers and a few people physically staffing data centers, but everybody else works wherever they want to.
> Your manager doesn't get upset when you leave, bit weird how people feel so differently when they get fired.
That's because people have a single employer, while companies have several employees.
That's also why employees are protected, while companies are mostly not. And yeah, the US doubles down on the problem by linking health insurance with the job.
> Your manager doesn't get upset when you leave, bit weird how people feel so differently when they get fired.
Really? You think its weird that someone leaving impacts that person more than their manager, team, or company?
A manager doesn't care that you leave because he still gets to bring home a salary, all they have to do is hire another person and maybe cut back on scope for a little while. When someone is layed off or fired they have to go find a new job, their income streams dry up, and are forced to rely on savings. People often have long term financial commitments they cannot back out of, and not knowing how you'll make rent, if you can afford your child's school fees, or even maybe having to cut back on how much you eat, _is stressful_ and emotionally taxing.
Are you fucking kidding me? "Which is a bit weird" I'll tell you what's weird: management who doesn't understand that their employees rely on them more than they rely on the employee.
Of course its fine when someone chooses to leave their job, they've made contingencies and planned around it. Whether it's through savings, another job, or the lottery, people have at least some idea of their plan when they leave a job.
> People often have long term financial commitments they cannot back out of, and not knowing how you'll make rent, if you can afford your child's school fees, or even maybe having to cut back on how much you eat, _is stressful_ and emotionally taxing.
I'm sure people making >200k/year and getting a 4 month severance package will be cutting back on how much they eat.
What you say is true about low or even medium income jobs. But most of the cuts are to tech workers and their managers, ie. people best equipped to manage in this kind of event.
A manager doesn't care that you leave because he still gets to bring home a salary, all they have to do is hire another person and maybe cut back on scope for a little while.
Yeah, I'm curious how someone can have an opinions on workplaces and workers and not seem to have personal experience with the subject, especially in a community like this.
Do they just come from a wealthy family so the stance is "Getting fired isn't a big deal, just ask your dad to cover expenses until your next job."?
It comes down to the concentration of wealth. Companies wouldn't have the capital to bid up salaries if they faced stiffer competition or couldn't access investment from a limited pool of investors (who all think the same), as is the case now. I know that "diversity" is a dirty word these days, but it's key. A large middle class, where each family has a small amount of money to put towards their diverse desires, is going to lead to a more stable economy than all of the money pooled in the hands of a small group with a much smaller set of needs. Dropbox should never have been able to hire so many people; that capital should have been in the hands of the larger public, who could have spent it supporting a more diverse set of hundreds or thousands of jobs (who wouldn't all be competing with each other for a limited number of seats in the "not laid off" lifeboat).
Put simply, these kinds of things are going to keep happening until our wealthiest (individuals/families/companies) are a lot less rich.
> Companies allow things like remote work, which is a perk, but also has a lot of abuse in terms of how much work gets done
Do you have any evidence of this? There are unfounded claims of “productivity metrics” but I have never actually seen one.
E: I realize this is a poor choice of words after saying productivity metrics don’t exist. What I mean is my tasks are easier to complete in a WFH environment than they are in an office.
I have been far more productive from home. The constraints around communication necessitate effective documentation which enables asynchronous communication which alleviates scheduling challenges which improves delivery.
Maybe managers need to go in to the office to rub elbows but ICs definitely don’t.
Same. It's been a boon for me, and I genuinely enjoy my work, so it's win win. But anecdotally, I know people who abuse it.
On net, remote work is a plus: less commute, less pollution etc etc. And even the abusers, it's not like those people were highly productive in the office, I'm sure.
>The issue is not that you're getting fired. The issue is that healthcare is attached to employment, that makes zero sense.
No the issue is that I get fired after the prior townhall saying "we are not doing layoffs". Companies will outright lie to get little ounces of productivity and treat you like a criminal the moment they break the news, as if we're all school shooters waiting to happen in anger and rage over betrayal.
The circus of the 2023/2024 job market doesn't help either. Even pre-pandemic the process was padded, but now I'm not even convinced 80% of companies have a human reading my resume.
>There should also be some reasonable government provided safety net so people can reskill/learn and move to other fields.
I'd rather not "hit hard times" while shareholders are making a killing and make a conclustion that my entire career needs to shuffle so they can save pennies.
> remote work, which is a perk, but also has a lot of abuse in terms of how much work gets done
If you can't tell remote employees are slacking then you also can't tell if they are slacking in the office, you are just getting fooled by thinking presence implies work.
There's also COBRA, and the exchanges in the US. Frankly, even if you're eligible for Medicare it really isn't any cheaper if you're a current or recent high earner. But, in any case, it's about $7K/year for an individual who doesn't otherwise have coverage for a spouse etc.
A couple months ago interviewing.io posted something bragging about how "we do anonymous mock interviews. If people perform well in those interviews, they get introduced directly to a decision-maker at top-tier companies, regardless of how they look on paper." ( https://interviewing.io/blog/i-love-meritocracy-but-all-the-... )
This annoyed me enough that I sent in an email complaining that their introduction process specifically notes that I am not eligible for anything, despite performance measured by the site as "highest ever achieved: 94th percentile" (so, knock that down a bit for being a high water mark), because of an insufficient number of years of experience.
They responded:
> It really sucks, especially in this market, but this policy is a function of us having tried for years to get companies to take junior intros, and it didn't work. We offered to do it completely for free, too, fwiw, and no dice.
How competitive is the market for talent? Let's stipulate that, because of a lack of prior employment, I'm not qualified to have a job. How exactly would that situation change?
Clarification: Just because companies don't want a 3rd party like us providing them with junior candidates, it doesn't mean they don't want them. Even back in 2017-2019, when the market was booming, we couldn't get employers to take our juniors... because they generally have their own robust pipeline.
So the solution is to go to companies directly, rather than relying on a 3rd party service like ours, which companies tend to use specifically for roles they can't fill on their own.
I disagree with your conclusion, you have several flawed premises.
The market has been slowly shrinking into fewer and fewer hands over time, which is why it has become more competitive over time. This has also led to cooperative behavior among the large marketshare companies in the sectors to disadvantage competitors, and employees.
Companies do not bid up to the max they can, because the executives take their cut first. The companies bids can only ever be the max of what is left after that, and varies by the greed of those people.
Interest rates would be the shock you described, but Tech unemployment as far as I can tell has until now been bulletproof, and uncorrelated with interest rate rises or falls. Its not rational to assume this market shock is a result of interest rates, AI is the only competitive alternative.
The issue is not that you're getting fired. Its that you can no longer get base goods needed for survival arbitrarily and without notice, and without capital reserves which are finite you are living on the street.
When the entire market as an entirety is contracting, there are no new jobs to move to in other fields.
Worse, the concentrated market is naturally incentivized to impose high costs on any job seekers to interfere in labor relations to create barriers to entry for competitors while suppressing wages for prospective workers.
This natural progression occurs when anti-trust fails, and money printing makes it worse potentially leading to either deflation (a collapse to non-market socialism) or hyper-inflation (a collapse to non-market socialism). Debt issued as preferential loans from a money-printer makes a company state-dependent/controlled apparatus even if its claim is that it is held privately.
The economy today is worse than 2008, much worse then the dotcom bust, and if you plot the trend with good data going back and starting around the 1970s, the trend shows progressive ruin as time passes, with seiving and consolidation occurring regularly. That is the force driving this problem, and it doesn't enable tech salaries.
> There should also be some reasonable government provided safety net so people can reskill/learn.
There is a limit to what government can provide, it takes awhile to get to those limits (we're in a super-cycle going back to the 1920s) but we'll be there in the next 5-10 years thanks in large part to deficit spending and the FED picking winners and losers.
The main issues with academia also applies to government. They are structurally the same. Education today is not about learning skills, that is always secondary to instilling the qualities a loyal unthinking worker. That is what the entire prussian-model of schooling is about (which is what we have in this country).
These structures for training follow the same structure as guild socialism, and the same intractable failures (ref Mises for related details).
It inevitably ends up being a cult of qualification, where you are automatically considered unqualified without a piece of paper even if you have the actual skills to do the job. Once a target market size is identified and reached, new candidates are put on an endless escalator of suffering with arbitrary filters/requirements where the claimed outcome is nothing but an unobtainable pipe dream.
Very generous severance packages and companies/laders should be commended for this. If it's a one-and-done big cut with generous packages to save the company, then good on them.
Somehow overhiring and maintaining said headcount long enough to need to do a 20% cut is probably less commendable, but not exactly an outlier there in the current climate.
I've always wondered about all these standalone "point solution" companies and how durable the model is. In the current climate of reduce M&A, and cost consciousness there is no one to sell to. And as the big platforms - AWS, Azure, GCP continue to grow.. it strikes me that more big companies would rather have a one-stop shop full of 80% solutions than pay for 100 different SaaS.
> it strikes me that more big companies would rather have a one-stop shop full of 80% solutions than pay for 100 different SaaS.
Strongly agree (unfortunately I might add, because I'm not a fan of "the big just keep getting bigger). When it comes to data management, tons of companies are really concerned about access controls, policies and DLP (data loss prevention). In my experience setting up these policies and rules correctly, and appropriately monitoring them, is very difficult and easy to get wrong (many data breaches are a consequence of this). This is especially common when you need to bidirectionally share content with third parties, you may want to give some of those parties access control rights on some data buckets, etc.
I was at a previous company where we were essentially all on Google Workspace. Google Drive's access controls for sharing with third parties used to really suck, though they've improved in recent years. We had teams that wanted to use Dropbox enterprise because their third party sharing features were much, much better. The problem is that I spent a ton of time learning all of the access control and management policies in Google Drive (which aren't great, mind you), and then I needed to spend another large amount of time learning an entirely different interface and set of rules for Dropbox. I almost had a breach because a checkbox buried down somewhere was checked incorrectly. Also, adding Dropbox meant I had a host of additional SOC 2 compliance checks that I needed to validate.
Meanwhile, sharing features in Google Drive (of Google Workspace) have largely gotten "good enough", as of the past couple years.
Case in point - when it came out almost 20 years ago it was ground breaking.
Meanwhile, every single desktop OS, mobile OS and cloud provider basically has had this functionality in some form for maybe 10 years now.
If you are a home user in Google or Apple ecosystem, its all native and seamless.
If you are a corporate setup in Microsoft or Google ecosystem, its all native and seamless there as well.
Not clear what the standout features of Dropbox would be now.
Severence is only so they can dodge regulatory scrutiny. They are not doing it out of the goodness of their hearts and was a line-item in the burden category for those employees when they were hired.
There's really no pleasing some people. Companies make cuts and don't give generous packages, they're evil. They give a package and it's just so they can dodge scrutiny.
What regulatory scrutiny do you mean? They don't need to provide severance, as far as California law seems concerned. I'm not a Californian, but an Internet search shows they're an at-will state. So it seems like everything is on the (legal) level.
Remember how there used to be a blog (or maybe it was a Tumblr, I forget) that documented every "Our incredible journey" post that inevitably announced the start-up's closure?
I think we need another one for "An update from <company>", as this has seemingly become the standard subject to use when you're announcing layoffs or data breaches. I saw an identical headline earlier today from Sony announcing a studio closure:
When a CEO takes full responsibility for these things it doesn't mean that they submit themselves to the punishment that internet users might want. It's the CEO telling their impacted employees that, no matter how well you did as an employee, you would still have been impacted. It's the CEO showing you empathy for the hurt they cause you for having failed to steer the company in a viable direction.
These messages are obviously never going to be well received, but at least people can find comfort in the fact that it's because Dropbox is shifting direction and strategy and not because they were bad employees. Stuff like this happens in business. Maybe you've focused on private sales and want to shift to enterprise sales or fund investments at which point your company no longer needs it's sales and marketing departments because the company mission will be radically different. Changing course is a CEO taking responsibility for the company.
I always think it's a bit weird how people put so much effort and angst into (over)analyzing the language that execs use in layoff announcements in the first place.
It's a layoff. Yeah, it sucks, and no matter what the CEO says people will be pissed. Better to just take the same good advice as when starting a new relationship: "Just ignore everything they say, and only consider what they do." I.e. is the severance package good? Are folks given some assistance/recommendations finding new jobs? If so, I couldn't care less about what the preamble in the layoff announcement looks like.
>t's a bit weird how people put so much effort and angst into (over)analyzing the language that execs use in layoff announcements in the first place.
It's professional passive-aggression. That's more angering than just saying "we need more money, we are laying off people". That "language" is what you're expected to do in the office half your life and it's a tiring waste of time keeping up false pleasantries.
If you don't know, look up the Umbridge effect. Sometimes the petty evils that pretend to be civil stings harder than the pure evils. Not many of us have a Voldamort in our lives. We all have an Umbridge.
I'm always a bit confused by profitable companies with (presumably) large reserves laying off lots of people. I get that they want to remain profitable. But sure 500ish people could be put to some use? A new product, a new market, a spinoff. Whatever? Are you telling me that no one in such a big, wealthy company of clever engineers has any use for a bunch of talented people?
It always seemed common sense to me that once a piece of software became stable and profitable you would need a much smaller engineering staff than when it was being built. The opposite seems to happens and orgs 10X their engineer headcount once they start making money.
It makes sense to keep some high performers and a few redundancies to stabilize/modernize it and make small improvements, but it feels like tech got really bloated with these massive corps who were trying to burn as much as they could to keep all the VC money flowing. Take like Uber having a team that built and maintained a chat app just for internal use, and every single big org having a bunch of teams responsible for various "some_dumb_name" that is the "custom X for 'Y'" where smaller teams just use the OS solutions to those problems.
> once a piece of software became stable and profitable you would need a much smaller engineering staff than when it was being built
This is not generally the case, except in monopoly situations.
Your software product generally has a competitor, and they're busy trying to make theirs better than yours -- whether with more features, better integrations, whatever it is.
So your staff size generally stays about the same in order to build more features desired by customers to prevent customers from switching to your competitor and you go out of business. And certain features, by themselves, can be more complex than the entire v1 of a product. And/or involve massive refactoring, etc.
The companies that get to reduce their team size are often because they're in a monopoly position, and then customers suffer because the software gets stagnant and the features they need don't get built. That's capitalism failing.
Also, something like an internal chat app isn't always a bad decision. If your company is above a certain size headcount, it can literally be cheaper to build small tools than to license them. Especially when you can more deeply customize and integrate them, which you often simply can't with off-the-shelf software.
The present value of your org is your old products, all futures gains are from new products. The tech industry is littered with tombstones of companies that sat coasted on the success of an older product. Conversely there's a fascinating habit of really smart people in the right environment (Google, Bell Labs, Xerox PARC etc) to create things of enormous value. Things that were just a side project include AWS, Slack, the transistor and transformer architecture. All these companies are really trying to be incubators for the next 100x thing.
What you are talking of is only possible in companies where the founder didn't take VC investment. Once you take VC money, you get on the treadmill of infinite growth to satisfy investors. That makes companies do strange things in pursuit of this impossible goal. Like hiring for the sake of showing growth in headcount, hiring people to branch into unrelated verticals, hiring people with big resumes just to say you have them on the team etc
Interestingly enough, I once worked at a company that saw how huge amounts of money could be made taking the exact opposite approach.
This all came about because this company had built a couple of hugely successful, and profitable, enterprise software products. So this company then decided to plow a ton of money into building out other products. The company was also pretty famous for having a high employee bar, and their college recruiting process was kind of legendary for attracting top CS and other tech grads.
However, this company discovered that building follow on successful products, even with lots of really smart people, is extremely difficult. As a not-perfect analogy, think of all the "one hit wonders" out there in the music industry. Beyond those one hit wonders, the vast majority of the rest are basically two hit wonders. Point being, once you've built a really successful product, even if you have tons of smart people, there is no guarantee that plowing money into another product will give you a positive ROI.
So this company realized this, and then saw there were a lot of other small-to-midsize software companies who were similar: they had one or two really successful products, but then were trying to use money from that to expand and grow into other areas, usually with little or no success. So this original company pivoted their business model: they went out to buy these "one hit wonder" software companies, immediately stopped any investment into other products, laid off as many people as possible and outsourced the operations and maintenance of the few successful products to low-cost locales (at the time, India and China) and then essentially just milked the subscription revenue until the product slowly petered out. That is, they weren't really investing in big new features in the product, but the product had a lot of existing customers who didn't (or couldn't) move off of it right away, so often they had at least a couple years of milking the existing revenue dry. I called it "the world's most successful and depressing business model".
My overall point in telling this story is that when you ask "Are you telling me that no one in such a big, wealthy company of clever engineers has any use for a bunch of talented people?", that often times the answer is "Correct!" People tend to underestimate how difficult it is to build successful products, even if you've already knocked one out of the park.
Google has killed products that could be entire companies if they weren't attached to the Search Ads firehose.
A $100 dinner could be an annual splurge if you're making minimum wage, and an arbitrary Tuesday if you have a quarter million dollar salary.
Executives think the same way about revenue streams. When they have one product that makes $$$$$ in revenue, they think "not worth my time" to consider another that makes $$. Really frustrating for the people making and using the lower revenue product, but it's why Google feels like a "billion users or bust" company.
> So this original company pivoted their business model: they went out to buy these "one hit wonder" software companies, immediately stopped any investment into other products, laid off as many people as possible and outsourced the operations and maintenance of the few successful products to low-cost locales (at the time, India and China) and then essentially just milked the subscription revenue until the product slowly petered out.
well that's just a dreadful experience. Couldn't innovate so they instead became a very alluring anglerfish with no intent to help stimulate the American economy at all. Successful and depressing business model indeed.
Such a shame how little respect tech gets unless we're spamming buzzwords to rich people. really ruined the reputation of "tech will make everyone's lives easier!"
It’s better for cash cow companies to acquire startups with PMF and real revenues. Let the market experiment and then pay for the successes. Investors and founders win, the company doesn’t waste it pretending to be a startup. Any other cash should be returned in dividends or buy backs.
Was this Insight Software? I usually wouldn't ask since you didn't volunteer the name, but seeing as throwaway is in your username I'd figured I'd ask.
> I'm always a bit confused by profitable companies with (presumably) large reserves laying off lots of people.
According to their financial statement, Dropbox has more liabilities than assets. So yes, they have a large cash reserve, but with an even larger debt offsetting it its hard to argue they are in a good overall financial position.
I had a product manager at Salesforce tell me he went around trying to build support for a new reporting product. He was eventually taken aside by some coworker and told they don't build new products at Salesforce, and bought companies instead.
And they did indeed later buy multiple companies, including Tableau, in that space.
Which can make business sense if you take into account both the probability of the project failing to deliver a competitive product (always high no matter how slick the pitch deck is) and the probability that it gets no traction in the marketplace even if it is as good as the competition. Buying an existing successful product and its customer base can be much lower risk even if it is the more expensive route.
> But sure 500ish people could be put to some use? A new product, a new market, a spinoff. Whatever? Are you telling me that no one in such a big, wealthy company of clever engineers has any use for a bunch of talented people?
I think a lot of the low hanging fruit in tech has been eaten up, bought up and consolidated, or actually was recognized as much more difficult and expensive than they actually thought. The leadership talent and vision in a lot of these companies is also painfully lacking. In short, to answer your last question: probably not. And I think they're terrified that Wall Street is going to notice.
I agree with both comments. ~500 can surely build some amazing tech, smaller teams have done more. I personally do think there's still a lot of relatively low-hanging fruit left, especially with the boom of possibilities due to AI, or simply what one can do with modern CPU/GPU performance, new browser APIs, modern tech factors, etc.
I also do agree and think leadership talent and vision in a lot tech companies is painfully lacking. This are the companies that could burn some money and use their wedge in the market to build some really cool things, but they wont. I guess to some degree, ironically, the money they're making might be part of the problem.
The "exhausted low hanging fruit" model IMO has been wrong since the industrial revolution. The fundamental problem is it's based on the heuristic of fixed demand + technology saturating the demand. It's really the opposite - technology is an ever expanding fractal, and the larger the surface area, the more things are needed. For example compilers are having a huge boom now because hardware is increasingly performance demanding and heterogeneous.
Why not? Some companies do try this. It rarely succeeds though. The reason is that re-education en-masse, restructuring of the chain of command, re-allocation of resources are hard. Most businesses at some point enter the phase where the inertia is the strongest driving force: they only need to apply a tiny fraction of initial force to keep the lights on. At this point, trying to restructure is bound to be very hard.
Maybe, if the company can foresee and realistically assess the problems it's about to face, it may gradually prepare for the transition. I've seen this happen at my friend's job at Dell storage division: some storage product failed, they tried to reshuffle the teams to start working on something else, with some code reuse from the previous one. It still didn't go well, and a lot of people were still let go (because the initial effort of developing a new product cannot really accommodate an army of various kinds of extra personal that's necessary for mature product). They sort-of survived, but with a huge loss.
Remember Better, the mortgage company? They were briefly notable for laying off 900 people on a Zoom call. However, no-one asked why a re-envisioned mortgage application/process was failing in the best possible market. My opinion is Dropbox most valuable commodity is the millions of Windows PCs with a system level scheduled task that is vulnerable to "hijacking"... basically they are a data stream.
It was not failing in the best possible market. Better was a successful lender for mortgage refinancing. Better struggled to establish itself within the purchase market which has far more complex relationships.
It may well be that there is no alternative. Maybe Dropbox did try everything, maybe tried to let those 500 people work on producing different products or on finding other sources of income, I don't know. And I get that it's important for a business to keep itself afloat. But it's a recurring phenomenon in larger tech companies that I find puzzling.
Many of the answers in this thread have been perfectly reasonable. And I'm probably kidding myself when I think that "if I were that CEO, I'd do things differently".
Five or 10 years ago, they were doing a lot of this. Dropbox Paper ("a collaborative online workspace that allows you to create, share, and edit documents and notes with your team") for one. It's still active but it never took off. I was just notified that there is some sort of migration taking place which is probably related to the RIF.
Dropbox was barely cash-flow positive (basically meaning profitable excluding equity compensation) when it had its IPO. It's been having trouble expanding from the consumer space into the business space, and I wouldn't be surprised if its profits are slim.
Also, they've repeatedly tried to create new products. Carousel, Mailbox, and others. Dropbox has had little to no success outside of its core business. While it does that core business very well, it has stiff competition, and the market seems to be already tapped out.
Those employees were costing more than the value they were creating.
If the marginal product of labor is lower than the marginal cost of labor, the company should reduce headcount. If higher, the company should increase headcount.
Whether in the long term this is net-beneficial for a given actor in the typical case, is at best unclear. This marginal-labor-cost/benefit-in-a-given-moment accounting misses a large proportion of the harmful effects of a layoff.
When a bunch of companies in one sector do it, it does lower wages and reduce labor power to e.g. demand better working conditions. That part, is a benefit for companies. But it's not the result of one company doing what's best for their particular situation—it's a result of coordination, even if only by the understanding that "this is what you do, when there's an excuse to, and especially when you see others doing it". It's merely best practice then, not... collusion.
Arguably the value they were creating was influenced by the direction and application that labor was directed at. Redirecting that available labor at something more valuable would fix that as well wouldn't it?
Yes, but not in a way that blames the workers. If a product improves but margins don't (because say, interest rates), you have employees who all perfomed above expectations that can still get taken off because the current environment can't make money on anything through consumers (who are getting less buying power and cutting non-essential services).
I'd hope tech workers on a community like this could empathize with other tech workers in such an environment.
I feel like leadership and vision are lacking at DropBox, so they don't have any good ideas of what to do with the staff they've got.
They should be exploring new opportunities which leverage the skillset of their existing employees, this would diversify them from the effects of OneDrive and GDrive.
For example with AI alone we've seen an incredible number of new file services dedicated to just serving models, and DropBox has totally ignored that need.
Instead they regularly add bitsy, poorly implemented, "us too" features to DropBox which adds friction to common workflows - then provide no way to customise these features away for people who do not want them.
Perhaps to them they see this as evolving the product and keeping it relevant, but their approach doesn't address why Google and Microsoft are eating their lunch, nor does it take their eggs out of one basket.
But which people: the sales/marketing, the developers that actually make the product, across the board? At some point, development gets to a stable and solid product, so revenue increases come from staffing up sales/marketing. So does that mean you can reduce the devs to try and increase new users or that you've overstaffed the sales/marketing? Maybe there's just too damn many middle managers? Will the cutting be a surgical blade or a broad axe?
The company could put them to some use, or they could get capital and launch their own ventures. It's equivalent from a market perspective, except the one you suggest requires unnecessary coercion (forcing the employees to work on something they may not have signed up for).
At the end of the day, the american market place is distinguished in that venture capital, especially in tech, is very accessible. Being laid off seems to be a bonus in the hunt for VC money.
It's the same reason companies return dividends. Sure, they could use the money for R&D and launching a new product, or they could send the money to investors so that they can scour the marketplace for a new technology of their own choosing for investment. The first one unnecessarily takes investor money for a project they may not have signed up for, whereas the former maximizes their freedom to invest in what they find interesting
Often they target the lowest performers for such layoff. Of course they rarely succeed in doing that, but the idea is that these people should have been let go anyway but weren’t for various reasons.
> Often they target the lowest performers for such layoff.
In my experience, this is often an after-the-fact rationalization by people who "survive" layoffs to explain them, and a convenient justification by leadership for layoffs. If you've ever been in the room when layoffs are planned or discussed, the actual process is way more focused on blunt cost, personality of the people involved or on the chopping block, and is often practically a tossup considering "performance" is not really a clear or meaningful metric (actually, more often it's arbitrary for most companies --- they will find the metric they need to justify laying off someone). This phenomenon is greater the bigger the company and the more abstracted managers and leadership are from their lower level employees.
Many times the marching orders were to fire the high earners, assuming that the remaining, less well compensated workers, could together do the same work for less.
Every new product or market usually also needs additional investments, maybe even new workers with relevant domain knowledge. And Dropbox did try new products and markets, but what if it's not working out? Should they continue until money runs out?
And some interesting part of this announcement is the mentioning of the grown overcomplex management. This kinda smells of some shrinking for health-benefits. For some reason or another, they grew into a wrong direction, and maybe now remove the unhealthy parts to be able to operate better.
I'm a libertarian in most things but I still don't like layoffs from profitable companies.
Like it's probably not good for our society that people have to up end their life every few years and probably move to find a new job.
Both my parents stayed in the same
job for their careers and it meant they could stay in the same place, have kids, build ties to the community, etc. Seems important if you want to not die out as a society.
> Like it's probably not good for our society that people have to up end their life every few years and probably move to find a new job.
The thing is, Dropbox is done (as in feature complete). Like when the construction of a building completes, many people are "laid off" because they aren’t needed anymore. Yeah, you need to keep some people around for things like maintaining the building, but not to the scale of the original workforce required to build it.
It is "good" that the excess labour is freed up to go work on the next "building". What may not be good is that the workers didn't think to associate with each other like construction workers do. Construction, being a much more mature industry, typically keeps a clear separation between the workers and the building so that then construction is done the entire excess group of people can be lifted on to the next project instead of all going their separate ways.
Software will undoubtedly go that way eventually. But it is, in the grand scheme of things, still early days for it as an industry. We haven't yet learned the lessons that older industries have.
> Both my parents stayed in the same job for their careers
My father was the same, BUT.. this is an INCREDIBLY risky thing to do career-wise in the modern era. Given how much tech advances and that we actually face international competition that a lot of our boomer parents didn't during their career, I don't see really any going back either.
Some of the worst layoff situations I've seen were guys who worked in the same company for 25 years.. long enough that their knowledge & skills was too company-specific, but not long enough to retire. Just because someone seems indispensable doesn't mean they are safe.
Having to drain savings for 1-2 years jobless after a layoff in the last 10 years of your career and reset at a probably lower salary can set back your retirement 10 years.
Fully agreed - yet, we as a society consistently and systematically trade (or let "others" trade) much more critical aspects of life, such as quality of air, water, food etc. for short-term profits, even though that very often has no clear/direct positive impact on any other comparably valuable aspects of our lives.
So it's no wonder that "some people losing their jobs and needing to move for a new one" is irrelevant, when the only goal is profit maximisation, even though we don't even understand what for.
Why do people still think like this? Have we not had enough layoffs these years from nearly all companies in tech with so many configurations to realize that this isn't just targeting new or incompetent people?
Dropbox my one critique is can you please make it affordable again. I just can't justify the cost as there are cheaper services out there. I don't care about PDF signing etc. I fear OneDrive/Google Drive are eating you lunch because it's a hard sell to be competitive against them price wise.
I left Dropbox when they added (and preemptively enabled) a checkbox that shared your data with them for AI training. I refuse to do business with a company that will just unilaterally invade my privacy like that. They can make it as cheap as they want, I'll never go back.
Selling data is always the last play for all businesses that have data.
Either you never give it to them in a way that can be sold (e.g. fully encrypted), or you expect them to sell it when the leaders need to increase cash flow.
Exactly!!!
I stopped being a customer when they lost touch with their customer base. They decided to become something else, adjust plans however they thought, introduced useless featured and all these while riding the money train.
I feel sorry for those being laid off, it’s not immediately/directly their fault. It’s the management and the product responsible that should take the blame.
A feature of what? Surely Jobs didn't expect a feature of Windows, OSX, Android, Linux, and ChromeOS to all seamlessly interact with one another.
I don't doubt that Jobs might have seen Dropbox as a feature that Apple could have implemented across the Apple ecosystem, but that's a pretty limited view of where the value of Dropbox lies.
It's a product that I was willing to pay for (until I required native E2E encryption). _iCloud Drive_ is a feature, mostly — aside from the fact that you still have to pay for it to be useful, so kind of still a product.
Steve Jobs was wrong about many things, and this was one of them.
Funny how Hacker News spent the past 15 years laughing at anyone questioning the viability of Dropbox as a business, but then after two years in a down market half the site is begging them to be cheap again.
What's the matter? You like the sound of that crusty, slow Linux NAS that this site has derided for years?
>You like the sound of that crusty, slow Linux NAS that this site has derided for years?
Honestly, it's a lot more enjoyable than I expected. Internet enabled, easily expandable (my setup is 5TB), can quickly setup a plex server for media, and can easily up/download any files needed from anywhere I have connection. And I feel I only scrathed the surface of potential. One of the more useful investments I made this decade.
> Impacted employees will be eligible to keep company devices (phones, tablets, laptops, and peripherals) for personal use.
It's not often you see this. Netflix used to do this if your equipment wasn't brand new, and with any phone[1]. And the very first startup I worked for let me buy my laptop, desktop, monitor, and cell phone for $50. But you don't see it too often.
[1] There was a "joke" at Netflix that if your manager told you that you should upgrade your phone, it meant you were gonna get let go soon, because sometimes people really did get let go just weeks after getting a new phone, and they got to keep the phone.
At a former employer I (voluntarily) left. I ended up spending a good couple hours driving my 7-year old laptop which I rarely used to a FedEx dropoff and I'm sure it was promptly recycles. But I wanted make sure all the loose ends were tied up.
on the opposite side, I had some nearby management literally come to my house 30 minutes after my layoff to collect my equipement. I didn't even have time to process the layoff; I had to disconnect my entire setup, lug it downstairs, and have it ready to lug into someone's truck faster than I could order a pizza.
The "core" demographic of HN probably sees this as standard, if they were ever laid off to begin with. The commenters at the very least seem to be (or claim to be) on a very high end of tech that doesn't realize that not all US layoffs give you 3 months severace standard.
>Industry standard is to offer 18 months of COBRA, not 6. Job searches frequently take way longer than that.
job searches taking 6+ months is exactly why this whole process is broken. I I could get quick rejections and considerations, being laid off wouldn't even be that bad.
TBH it feels like Dropbox has a pretty fair earnings multiple at the moment (~4X). Have we reached a point where tech companies have been around long enough that they can / should enter a sort of maintenance mode? It feels like there is a company version of the Peter Principle. Why do they (Dropbox specifically) need to continue to "innovate"? Wouldn't it be better for all parties if they just focused on maintaining the best possible version of their core offering at the lowest cost? Maybe Dash (or whatever) will work but most likely it won't, and investing in that initiative puts their whole business at risk.
There exists such a mode: it's called dividend distribution. But currently DBX and many other tech companies aren't paying any dividends to stock holders. So if it's not growing and not paying dividends, what is the company doing?
Alternately we have entered a phase where layoffs have metastasized as a thing to do so much that executives are being asked about it. "We've noticed you haven't done any layoffs yet, can you explain that?"
"Wouldn't it be better for all parties if they just focused on maintaining the best possible version of their core offering at the lowest cost?"
Yes, absolutely.
There is value in new features and functionality but there can be so much more value in a predictable, stable tool that can be depended on and returned to.
There are people who cancelled their first account with us before dropbox existed and have returned, post-covid, to find a familiar tool to be picked right back up again.
This has been immensely valuable to a great many people and we wouldn't dream of ever changing it.
Readit News
- The market for talent is competitive. So companies bid up to the absolute max they can - The market for managers is also competitive. Creating dynamics that lead to larger teams and raises for team members - Companies allow things like remote work, which is a perk, but also has a lot of abuse in terms of how much work gets done
The end result is that if companies are spending their max, if there's a shock to the market/system etc they have to cut. You'd see this less if there was more padding/ less competitive pressure/lower salaries.
I think that's fine and the system is working as intended. People should be freed up to move to other roles where they can be productive. Your manager doesn't get upset when you leave, bit weird how people feel so differently when they get fired.
The issue is not that you're getting fired. The issue is that healthcare is attached to employment, that makes zero sense. There should also be some reasonable government provided safety net so people can reskill/learn and move to other fields.
One main fault in the analogy is that in an economic crisis, there is a vicious cycle of income loss which leads to lower demand leading to more lost jobs. This coordination failure can be handled by fiscal/monetary policy. Whereas server failure, even when widespread due to a virus doesn't happen recursively like that.
Getting fired/laid off is about the only thing that can save you.
When you leave, your manager loses 1/N of team productivity. When you get fired, you lose 100% of your income.
I bet the manager would be more upset if the entire team quit. But even then, they'd still have their job—for a while, at least.
I do understand that it can be challenging to save for young people with student debt starting out in a HCOL area. But I see older tech workers who ought to know better buying luxury cars and fancy gaming PCs and taking exotic vacations. Good luck to them when the next recession hits.
That doesn't seem the least bit weird to me. If I choose to leave a job (or relationship), I could quite sensibly feel differently if that same job (or relationship) chooses to leave me.
Just the other day I clicked on the website of some random law firm's career page. I wasn't happy with what I saw (in the context of my own career). Some researchers with 1 year of experience with starting salary of 450k+... tech salaries look high as long as you don't check other professions.
Tech is high earning. It gets beat out by high finance and partner-level roles in e.g. law though. If someone is earning 450k in their first year it's probably similar to a quant finance role.
That's because people have a single employer, while companies have several employees.
That's also why employees are protected, while companies are mostly not. And yeah, the US doubles down on the problem by linking health insurance with the job.
It's weird that the average person working these jobs has bills to pay, and perhaps additional family members to care for?
Really? You think its weird that someone leaving impacts that person more than their manager, team, or company?
A manager doesn't care that you leave because he still gets to bring home a salary, all they have to do is hire another person and maybe cut back on scope for a little while. When someone is layed off or fired they have to go find a new job, their income streams dry up, and are forced to rely on savings. People often have long term financial commitments they cannot back out of, and not knowing how you'll make rent, if you can afford your child's school fees, or even maybe having to cut back on how much you eat, _is stressful_ and emotionally taxing.
Are you fucking kidding me? "Which is a bit weird" I'll tell you what's weird: management who doesn't understand that their employees rely on them more than they rely on the employee.
Of course its fine when someone chooses to leave their job, they've made contingencies and planned around it. Whether it's through savings, another job, or the lottery, people have at least some idea of their plan when they leave a job.
I'm sure people making >200k/year and getting a 4 month severance package will be cutting back on how much they eat.
What you say is true about low or even medium income jobs. But most of the cuts are to tech workers and their managers, ie. people best equipped to manage in this kind of event.
Yeah, I'm curious how someone can have an opinions on workplaces and workers and not seem to have personal experience with the subject, especially in a community like this.
Do they just come from a wealthy family so the stance is "Getting fired isn't a big deal, just ask your dad to cover expenses until your next job."?
How is this weird? Your take is like the famous saying about the chicken and the pig both contributing equally to the egg and ham sandwich.
Put simply, these kinds of things are going to keep happening until our wealthiest (individuals/families/companies) are a lot less rich.
Do you have any evidence of this? There are unfounded claims of “productivity metrics” but I have never actually seen one.
E: I realize this is a poor choice of words after saying productivity metrics don’t exist. What I mean is my tasks are easier to complete in a WFH environment than they are in an office.
I have been far more productive from home. The constraints around communication necessitate effective documentation which enables asynchronous communication which alleviates scheduling challenges which improves delivery.
Maybe managers need to go in to the office to rub elbows but ICs definitely don’t.
Same. It's been a boon for me, and I genuinely enjoy my work, so it's win win. But anecdotally, I know people who abuse it.
On net, remote work is a plus: less commute, less pollution etc etc. And even the abusers, it's not like those people were highly productive in the office, I'm sure.
see: https://archive.is/CKGbV
No the issue is that I get fired after the prior townhall saying "we are not doing layoffs". Companies will outright lie to get little ounces of productivity and treat you like a criminal the moment they break the news, as if we're all school shooters waiting to happen in anger and rage over betrayal.
The circus of the 2023/2024 job market doesn't help either. Even pre-pandemic the process was padded, but now I'm not even convinced 80% of companies have a human reading my resume.
>There should also be some reasonable government provided safety net so people can reskill/learn and move to other fields.
I'd rather not "hit hard times" while shareholders are making a killing and make a conclustion that my entire career needs to shuffle so they can save pennies.
If you can't tell remote employees are slacking then you also can't tell if they are slacking in the office, you are just getting fooled by thinking presence implies work.
So tired of hearing this "argument".
Do you mind expanding on this? How does remote work change the standards of how much work somebody has to get down?
A couple months ago interviewing.io posted something bragging about how "we do anonymous mock interviews. If people perform well in those interviews, they get introduced directly to a decision-maker at top-tier companies, regardless of how they look on paper." ( https://interviewing.io/blog/i-love-meritocracy-but-all-the-... )
This annoyed me enough that I sent in an email complaining that their introduction process specifically notes that I am not eligible for anything, despite performance measured by the site as "highest ever achieved: 94th percentile" (so, knock that down a bit for being a high water mark), because of an insufficient number of years of experience.
They responded:
> It really sucks, especially in this market, but this policy is a function of us having tried for years to get companies to take junior intros, and it didn't work. We offered to do it completely for free, too, fwiw, and no dice.
How competitive is the market for talent? Let's stipulate that, because of a lack of prior employment, I'm not qualified to have a job. How exactly would that situation change?
Clarification: Just because companies don't want a 3rd party like us providing them with junior candidates, it doesn't mean they don't want them. Even back in 2017-2019, when the market was booming, we couldn't get employers to take our juniors... because they generally have their own robust pipeline.
So the solution is to go to companies directly, rather than relying on a 3rd party service like ours, which companies tend to use specifically for roles they can't fill on their own.
The market has been slowly shrinking into fewer and fewer hands over time, which is why it has become more competitive over time. This has also led to cooperative behavior among the large marketshare companies in the sectors to disadvantage competitors, and employees.
Companies do not bid up to the max they can, because the executives take their cut first. The companies bids can only ever be the max of what is left after that, and varies by the greed of those people.
Interest rates would be the shock you described, but Tech unemployment as far as I can tell has until now been bulletproof, and uncorrelated with interest rate rises or falls. Its not rational to assume this market shock is a result of interest rates, AI is the only competitive alternative.
The issue is not that you're getting fired. Its that you can no longer get base goods needed for survival arbitrarily and without notice, and without capital reserves which are finite you are living on the street.
When the entire market as an entirety is contracting, there are no new jobs to move to in other fields.
Worse, the concentrated market is naturally incentivized to impose high costs on any job seekers to interfere in labor relations to create barriers to entry for competitors while suppressing wages for prospective workers.
This natural progression occurs when anti-trust fails, and money printing makes it worse potentially leading to either deflation (a collapse to non-market socialism) or hyper-inflation (a collapse to non-market socialism). Debt issued as preferential loans from a money-printer makes a company state-dependent/controlled apparatus even if its claim is that it is held privately.
The economy today is worse than 2008, much worse then the dotcom bust, and if you plot the trend with good data going back and starting around the 1970s, the trend shows progressive ruin as time passes, with seiving and consolidation occurring regularly. That is the force driving this problem, and it doesn't enable tech salaries.
> There should also be some reasonable government provided safety net so people can reskill/learn.
There is a limit to what government can provide, it takes awhile to get to those limits (we're in a super-cycle going back to the 1920s) but we'll be there in the next 5-10 years thanks in large part to deficit spending and the FED picking winners and losers.
The main issues with academia also applies to government. They are structurally the same. Education today is not about learning skills, that is always secondary to instilling the qualities a loyal unthinking worker. That is what the entire prussian-model of schooling is about (which is what we have in this country).
These structures for training follow the same structure as guild socialism, and the same intractable failures (ref Mises for related details).
It inevitably ends up being a cult of qualification, where you are automatically considered unqualified without a piece of paper even if you have the actual skills to do the job. Once a target market size is identified and reached, new candidates are put on an endless escalator of suffering with arbitrary filters/requirements where the claimed outcome is nothing but an unobtainable pipe dream.
There is, it's called Medicaid.
I shouldn't have to sell my house to get medical care.
Somehow overhiring and maintaining said headcount long enough to need to do a 20% cut is probably less commendable, but not exactly an outlier there in the current climate.
I've always wondered about all these standalone "point solution" companies and how durable the model is. In the current climate of reduce M&A, and cost consciousness there is no one to sell to. And as the big platforms - AWS, Azure, GCP continue to grow.. it strikes me that more big companies would rather have a one-stop shop full of 80% solutions than pay for 100 different SaaS.
16% in 2023: https://blog.dropbox.com/topics/company/a-message-from-drew
Or, before that, another 11%: https://dropbox.gcs-web.com/node/8916/html
I wish them well, things look rough.
Strongly agree (unfortunately I might add, because I'm not a fan of "the big just keep getting bigger). When it comes to data management, tons of companies are really concerned about access controls, policies and DLP (data loss prevention). In my experience setting up these policies and rules correctly, and appropriately monitoring them, is very difficult and easy to get wrong (many data breaches are a consequence of this). This is especially common when you need to bidirectionally share content with third parties, you may want to give some of those parties access control rights on some data buckets, etc.
I was at a previous company where we were essentially all on Google Workspace. Google Drive's access controls for sharing with third parties used to really suck, though they've improved in recent years. We had teams that wanted to use Dropbox enterprise because their third party sharing features were much, much better. The problem is that I spent a ton of time learning all of the access control and management policies in Google Drive (which aren't great, mind you), and then I needed to spend another large amount of time learning an entirely different interface and set of rules for Dropbox. I almost had a breach because a checkbox buried down somewhere was checked incorrectly. Also, adding Dropbox meant I had a host of additional SOC 2 compliance checks that I needed to validate.
Meanwhile, sharing features in Google Drive (of Google Workspace) have largely gotten "good enough", as of the past couple years.
Meanwhile, every single desktop OS, mobile OS and cloud provider basically has had this functionality in some form for maybe 10 years now.
If you are a home user in Google or Apple ecosystem, its all native and seamless. If you are a corporate setup in Microsoft or Google ecosystem, its all native and seamless there as well.
Not clear what the standout features of Dropbox would be now.
This kind of no-win complaining is tiresome.
Claiming that it’s to please regulators when it’s far and away better than the average severance package is an irrational claim.
I think we need another one for "An update from <company>", as this has seemingly become the standard subject to use when you're announcing layoffs or data breaches. I saw an identical headline earlier today from Sony announcing a studio closure:
https://sonyinteractive.com/en/news/blog/an-update-from-play...
These messages are obviously never going to be well received, but at least people can find comfort in the fact that it's because Dropbox is shifting direction and strategy and not because they were bad employees. Stuff like this happens in business. Maybe you've focused on private sales and want to shift to enterprise sales or fund investments at which point your company no longer needs it's sales and marketing departments because the company mission will be radically different. Changing course is a CEO taking responsibility for the company.
It is what it is.
https://blog.dropbox.com/topics/company/a-message-from-drew
It's a layoff. Yeah, it sucks, and no matter what the CEO says people will be pissed. Better to just take the same good advice as when starting a new relationship: "Just ignore everything they say, and only consider what they do." I.e. is the severance package good? Are folks given some assistance/recommendations finding new jobs? If so, I couldn't care less about what the preamble in the layoff announcement looks like.
It's professional passive-aggression. That's more angering than just saying "we need more money, we are laying off people". That "language" is what you're expected to do in the office half your life and it's a tiring waste of time keeping up false pleasantries.
If you don't know, look up the Umbridge effect. Sometimes the petty evils that pretend to be civil stings harder than the pure evils. Not many of us have a Voldamort in our lives. We all have an Umbridge.
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It makes sense to keep some high performers and a few redundancies to stabilize/modernize it and make small improvements, but it feels like tech got really bloated with these massive corps who were trying to burn as much as they could to keep all the VC money flowing. Take like Uber having a team that built and maintained a chat app just for internal use, and every single big org having a bunch of teams responsible for various "some_dumb_name" that is the "custom X for 'Y'" where smaller teams just use the OS solutions to those problems.
This is not generally the case, except in monopoly situations.
Your software product generally has a competitor, and they're busy trying to make theirs better than yours -- whether with more features, better integrations, whatever it is.
So your staff size generally stays about the same in order to build more features desired by customers to prevent customers from switching to your competitor and you go out of business. And certain features, by themselves, can be more complex than the entire v1 of a product. And/or involve massive refactoring, etc.
The companies that get to reduce their team size are often because they're in a monopoly position, and then customers suffer because the software gets stagnant and the features they need don't get built. That's capitalism failing.
Also, something like an internal chat app isn't always a bad decision. If your company is above a certain size headcount, it can literally be cheaper to build small tools than to license them. Especially when you can more deeply customize and integrate them, which you often simply can't with off-the-shelf software.
software can generally be 'done' in the same way building a skyscraper can be
This all came about because this company had built a couple of hugely successful, and profitable, enterprise software products. So this company then decided to plow a ton of money into building out other products. The company was also pretty famous for having a high employee bar, and their college recruiting process was kind of legendary for attracting top CS and other tech grads.
However, this company discovered that building follow on successful products, even with lots of really smart people, is extremely difficult. As a not-perfect analogy, think of all the "one hit wonders" out there in the music industry. Beyond those one hit wonders, the vast majority of the rest are basically two hit wonders. Point being, once you've built a really successful product, even if you have tons of smart people, there is no guarantee that plowing money into another product will give you a positive ROI.
So this company realized this, and then saw there were a lot of other small-to-midsize software companies who were similar: they had one or two really successful products, but then were trying to use money from that to expand and grow into other areas, usually with little or no success. So this original company pivoted their business model: they went out to buy these "one hit wonder" software companies, immediately stopped any investment into other products, laid off as many people as possible and outsourced the operations and maintenance of the few successful products to low-cost locales (at the time, India and China) and then essentially just milked the subscription revenue until the product slowly petered out. That is, they weren't really investing in big new features in the product, but the product had a lot of existing customers who didn't (or couldn't) move off of it right away, so often they had at least a couple years of milking the existing revenue dry. I called it "the world's most successful and depressing business model".
My overall point in telling this story is that when you ask "Are you telling me that no one in such a big, wealthy company of clever engineers has any use for a bunch of talented people?", that often times the answer is "Correct!" People tend to underestimate how difficult it is to build successful products, even if you've already knocked one out of the park.
Google has killed products that could be entire companies if they weren't attached to the Search Ads firehose.
A $100 dinner could be an annual splurge if you're making minimum wage, and an arbitrary Tuesday if you have a quarter million dollar salary.
Executives think the same way about revenue streams. When they have one product that makes $$$$$ in revenue, they think "not worth my time" to consider another that makes $$. Really frustrating for the people making and using the lower revenue product, but it's why Google feels like a "billion users or bust" company.
well that's just a dreadful experience. Couldn't innovate so they instead became a very alluring anglerfish with no intent to help stimulate the American economy at all. Successful and depressing business model indeed.
Such a shame how little respect tech gets unless we're spamming buzzwords to rich people. really ruined the reputation of "tech will make everyone's lives easier!"
According to their financial statement, Dropbox has more liabilities than assets. So yes, they have a large cash reserve, but with an even larger debt offsetting it its hard to argue they are in a good overall financial position.
And they did indeed later buy multiple companies, including Tableau, in that space.
I think a lot of the low hanging fruit in tech has been eaten up, bought up and consolidated, or actually was recognized as much more difficult and expensive than they actually thought. The leadership talent and vision in a lot of these companies is also painfully lacking. In short, to answer your last question: probably not. And I think they're terrified that Wall Street is going to notice.
I also do agree and think leadership talent and vision in a lot tech companies is painfully lacking. This are the companies that could burn some money and use their wedge in the market to build some really cool things, but they wont. I guess to some degree, ironically, the money they're making might be part of the problem.
Maybe, if the company can foresee and realistically assess the problems it's about to face, it may gradually prepare for the transition. I've seen this happen at my friend's job at Dell storage division: some storage product failed, they tried to reshuffle the teams to start working on something else, with some code reuse from the previous one. It still didn't go well, and a lot of people were still let go (because the initial effort of developing a new product cannot really accommodate an army of various kinds of extra personal that's necessary for mature product). They sort-of survived, but with a huge loss.
I think I prefer the severance, the full disclosure, the opportunity to find another job and the possibility to keep teams together at a new thing.
Many of the answers in this thread have been perfectly reasonable. And I'm probably kidding myself when I think that "if I were that CEO, I'd do things differently".
Five or 10 years ago, they were doing a lot of this. Dropbox Paper ("a collaborative online workspace that allows you to create, share, and edit documents and notes with your team") for one. It's still active but it never took off. I was just notified that there is some sort of migration taking place which is probably related to the RIF.
Neither exists anymore.
Also, they've repeatedly tried to create new products. Carousel, Mailbox, and others. Dropbox has had little to no success outside of its core business. While it does that core business very well, it has stiff competition, and the market seems to be already tapped out.
If the marginal product of labor is lower than the marginal cost of labor, the company should reduce headcount. If higher, the company should increase headcount.
Whether in the long term this is net-beneficial for a given actor in the typical case, is at best unclear. This marginal-labor-cost/benefit-in-a-given-moment accounting misses a large proportion of the harmful effects of a layoff.
When a bunch of companies in one sector do it, it does lower wages and reduce labor power to e.g. demand better working conditions. That part, is a benefit for companies. But it's not the result of one company doing what's best for their particular situation—it's a result of coordination, even if only by the understanding that "this is what you do, when there's an excuse to, and especially when you see others doing it". It's merely best practice then, not... collusion.
I'd hope tech workers on a community like this could empathize with other tech workers in such an environment.
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For example with AI alone we've seen an incredible number of new file services dedicated to just serving models, and DropBox has totally ignored that need.
Instead they regularly add bitsy, poorly implemented, "us too" features to DropBox which adds friction to common workflows - then provide no way to customise these features away for people who do not want them.
Perhaps to them they see this as evolving the product and keeping it relevant, but their approach doesn't address why Google and Microsoft are eating their lunch, nor does it take their eggs out of one basket.
At the end of the day, the american market place is distinguished in that venture capital, especially in tech, is very accessible. Being laid off seems to be a bonus in the hunt for VC money.
It's the same reason companies return dividends. Sure, they could use the money for R&D and launching a new product, or they could send the money to investors so that they can scour the marketplace for a new technology of their own choosing for investment. The first one unnecessarily takes investor money for a project they may not have signed up for, whereas the former maximizes their freedom to invest in what they find interesting
In my experience, this is often an after-the-fact rationalization by people who "survive" layoffs to explain them, and a convenient justification by leadership for layoffs. If you've ever been in the room when layoffs are planned or discussed, the actual process is way more focused on blunt cost, personality of the people involved or on the chopping block, and is often practically a tossup considering "performance" is not really a clear or meaningful metric (actually, more often it's arbitrary for most companies --- they will find the metric they need to justify laying off someone). This phenomenon is greater the bigger the company and the more abstracted managers and leadership are from their lower level employees.
At one company I worked at, a whole division got laid off because the director didn't like the manager of said division.
There are rationales behind it. The simplest one is that the product is matured enough so you don't need these so-called 10x engineers or seniors.
Then the lowest performers.
And some interesting part of this announcement is the mentioning of the grown overcomplex management. This kinda smells of some shrinking for health-benefits. For some reason or another, they grew into a wrong direction, and maybe now remove the unhealthy parts to be able to operate better.
>Are you telling me that no one in such a big, wealthy company of clever engineers has any use for a bunch of talented people?
not the shareholders. they never cared about clever engineering. Not unless [buzzword] is involved.
New products take time to mature into revenue generating things.
Cost savings from layoffs are immediate.
Like it's probably not good for our society that people have to up end their life every few years and probably move to find a new job.
Both my parents stayed in the same job for their careers and it meant they could stay in the same place, have kids, build ties to the community, etc. Seems important if you want to not die out as a society.
The thing is, Dropbox is done (as in feature complete). Like when the construction of a building completes, many people are "laid off" because they aren’t needed anymore. Yeah, you need to keep some people around for things like maintaining the building, but not to the scale of the original workforce required to build it.
It is "good" that the excess labour is freed up to go work on the next "building". What may not be good is that the workers didn't think to associate with each other like construction workers do. Construction, being a much more mature industry, typically keeps a clear separation between the workers and the building so that then construction is done the entire excess group of people can be lifted on to the next project instead of all going their separate ways.
Software will undoubtedly go that way eventually. But it is, in the grand scheme of things, still early days for it as an industry. We haven't yet learned the lessons that older industries have.
My father was the same, BUT.. this is an INCREDIBLY risky thing to do career-wise in the modern era. Given how much tech advances and that we actually face international competition that a lot of our boomer parents didn't during their career, I don't see really any going back either.
Some of the worst layoff situations I've seen were guys who worked in the same company for 25 years.. long enough that their knowledge & skills was too company-specific, but not long enough to retire. Just because someone seems indispensable doesn't mean they are safe.
Having to drain savings for 1-2 years jobless after a layoff in the last 10 years of your career and reset at a probably lower salary can set back your retirement 10 years.
So it's no wonder that "some people losing their jobs and needing to move for a new one" is irrelevant, when the only goal is profit maximisation, even though we don't even understand what for.
Very bold assumption
And somehow, the P/E of its stock almost always increases... Forcing it to double down on growth, that it can't do anymore.
Corporation governance is broken nowadays.
Either you never give it to them in a way that can be sold (e.g. fully encrypted), or you expect them to sell it when the leaders need to increase cash flow.
I don't doubt that Jobs might have seen Dropbox as a feature that Apple could have implemented across the Apple ecosystem, but that's a pretty limited view of where the value of Dropbox lies.
Steve Jobs was wrong about many things, and this was one of them.
Maybe people like bad products, and make bad products rich all the time?
You can make a good product and go out of business, sometimes through actually no fault of your own too.
I agree, Dropbox is a feature - and it shouldn't be a product.
they need $$$ from enterprise, everything else is a distraction.
Now I pay for google drive instead.
What's the matter? You like the sound of that crusty, slow Linux NAS that this site has derided for years?
Honestly, it's a lot more enjoyable than I expected. Internet enabled, easily expandable (my setup is 5TB), can quickly setup a plex server for media, and can easily up/download any files needed from anywhere I have connection. And I feel I only scrathed the surface of potential. One of the more useful investments I made this decade.
It's not often you see this. Netflix used to do this if your equipment wasn't brand new, and with any phone[1]. And the very first startup I worked for let me buy my laptop, desktop, monitor, and cell phone for $50. But you don't see it too often.
[1] There was a "joke" at Netflix that if your manager told you that you should upgrade your phone, it meant you were gonna get let go soon, because sometimes people really did get let go just weeks after getting a new phone, and they got to keep the phone.
1. 4 months pay + 1 week per year of tenure. 2. Receive Q4 vests. 3. Upcoming approved leaves paid in cash. 4. Year-end bonuses paid. 5. Keep company devices.
If you're actually good at your job, you typically end up with an even better job: https://hbr.org/2018/10/research-when-getting-fired-is-good-...
Industry standard is to offer 18 months of COBRA, not 6. Job searches frequently take way longer than that.
COBRA is a huge deal for departing employees. My single largest expense is health insurance for my partner and I, more so than even rent.
job searches taking 6+ months is exactly why this whole process is broken. I I could get quick rejections and considerations, being laid off wouldn't even be that bad.
There exists such a mode: it's called dividend distribution. But currently DBX and many other tech companies aren't paying any dividends to stock holders. So if it's not growing and not paying dividends, what is the company doing?
Dropbox's EBIDTA is 14.67, but most Software Companies tend to have an EBIDTA of 28.
Dropbox is significantly underperforming compared to their peers.
Furthermore, cloud file storage has become commodified and Dropbox missed the DLP, DSPM, and AI Search train.
> Have we reached a point where tech companies have been around long enough that they can / should enter a sort of maintenance mode
Absolutely not.
If you do not innovate as a software company, you risk becoming commodified.
And if BUs within a company fails to execute on their innovation or GTM strategy, they will be let go.
Yes, absolutely.
There is value in new features and functionality but there can be so much more value in a predictable, stable tool that can be depended on and returned to.
There are people who cancelled their first account with us before dropbox existed and have returned, post-covid, to find a familiar tool to be picked right back up again.
This has been immensely valuable to a great many people and we wouldn't dream of ever changing it.