Good for Patreon to go beyond the 60-day mandated period though
[0] https://edd.ca.gov/en/Jobs_and_Training/Layoff_Services_WARN
How many times have you been laid off?!
It's pretty easy to get laid off a lot if you work in startups. You join and know there is a ticking clock in the background. If you don't, you probably should.
Every startup thinks they are the 1 out of 10 (because why wouldn't they, you have to.)
In the first layoff I knew the company was planning a round in the next 18 months and I'd been there 6 years. I waited around for the payout. Layoff law in Australia is more favorable to the employee, the payout was 10 months. I took a week off before starting the next job on a substantial salary increase.
The most important is not to take it personally as a failure. That can mess with self confidence and interview performance and general well being. At my HR interview they had the team there and some "transition coach" they seemed worried about us. I was actually thrilled as I planned to leave anyway.
The "2022 financial crisis"? That's not even a thing. Slowing economic growth and even a recession, should we enter one later this year does not constitute a "financial crisis."
There has been no "redefining" nor is it a recent phenomenon nor does it have political roots. You are wrong on all accounts.
It doesn't have political roots. The National Bureau of Economic Research(NBER) is a private, non-profit, non-partisan research organization with an aim is to promote a greater understanding of how the economy works.
The nonpartisan panel, which was established in 1978 by former Ronald Reagan adviser and NBER president Martin Feldstein, has gone out of its way to keep politics out of the process.
The committee meets in secret and doesn’t announce its gatherings in advance or even in retrospect, unless there’s a press release declaring a formal decision.
And it typically takes the panel about a year to decide on a recession call, though some decision have been made in a few months while others have taken almost twice as long. That’s almost always well after a recession has been widely recognized by Wall Street.
The committee has never reversed a call.
Rather than two negative GDP readings, the NBER is looking for a substantial decline in activity over a sustained period of time. The committee sets dates of the peaks of economic activity and troughs based on six monthly data series, including nonfarm payrolls, personal consumption spending and industrial production.
It's pretty spectacular though that not only have been able to declare that were in one but you are also able to comment with confidence on how bad it's going to be be.
This depends on where you worked. Most of the developers I know were around for the dotcom bust, but only 2 have experienced a layoff. But none were working for dotcom companies.
Saw the writing on the wall for each of those and left before I was the one laid off.
It's the nature of playing around in the high stakes startup world. As I've gotten older I've found more stable companies. But it was quite funny coming home once every few years to tell my girlfriend I was laid off again and then picking up another job a week later.
I worked in an industry that's highly cyclical and had major consolidation over the last decade (HDD/SSD storage). We bought several companies and they would do layoffs roughly every 18 months or so.
Not only that, all former employees are de-facto "background check references" / "evagenlists" / "detractors" of your company. Forever! (well, not exactly forever... but close enough)
I can't recall a single year over the last 10 years where younger engineers, cousins, nephews or friends have asked me about the 2 companies I worked at before.
And boy, have I been candid.
Talked a very good friend of mine from joining Amazon for an offer he got making nearly 3 times much I did. All because of "decency" (or lack thereof) of a company.
https://retailwire.com/discussion/there-might-soon-be-no-one...
Is this supposed to be haven't?
I actually went out of my way to make it easy for my employees to quit. If they didn't want to stay, then I sincerely wished them well.
The company limited what I could do, but I did my best, and it seemed to work out.
That said - I've held off on any criticisms around their strategy/execution for the moment (aside from that) since it's unclear what happened. I'm wondering if Patreon is getting hit with lots of people backing off support of artists after a big jump due to the pandemic.
Given inflation and a lot of feelings of uncertainty around the economy, it wouldn't surprise me to learn that their revenue went way down in a hurry this year.
I back four artists on Patreon, down from five a year ago. In all 4 cases I'm either too busy to get full "value" out of sponsoring (e.g., I don't have time to read the updates or listen to all the demos), or there's not really any benefit other than funneling money to support the artist in hopes they'll continue working as an artist.
Each month I look at the bill from Patreon and wonder "do I really need to keep spending this money?" So far I've elected to - but I haven't been hit super hard by inflation or a layoff like many folks...
You're right!
That said, by the time a company is large enough that 17% of it is more than 17 people the kind of startup organization you have wisely and correctly nodded to will have ceased to exist.
So while you are right in that such scenarios have, do, and will continue to happen there's perhaps cause to wonder if that's really the best way to characterize replacing a security organization with specialists with a bunch of engineers who are likely quarter-time security at best. It's akin to firing all your engineers because the sales people can do a little bit of coding each.
Not really. A lot of stuff having moved to services, a lot of stuff being handled in 'no code' manner have simplified organizations a lot these days. Today you can just offload a lot of things to SaaS vendors that can automatically handle those stuff. Instead of having to have entire teams dealing with it like how it was in the earlier decades. You just need a host of capable people to deal with those services on your side, by wearing various hats. So the 'startup format' seems to have become extended to larger organizations.
Everyone should note the companies that do brutal layoffs with little/no severance. It's a major red flag because it shows incompetence and/or a lack of ethics.
Despite not knowing Jack personally pretty much everything I've seen from him over the years has reinforced my generally high opinion of him. In this case as well. As lay-offs go Patreon seems to be trying very hard to do right by their employees.
Don't mistake that for being a good CEO. He gives deep-felt apologies every time he does layoffs... which he does frequently. Often because he just doesn't like what people are doing. He also frequently communicates with the public in a more heart-felt manner than he does his own employees. He's great at putting out a great face.
- 5 days ago - Security Team - https://techcrunch.com/2022/09/09/patreon-security-layoffs/
- 2021 - https://www.protocol.com/bulletins/patreon-lays-off-36-emplo...
- 2020 - https://techcrunch.com/2020/04/21/patreon-lays-off-13-of-wor...
- 2019, September layoffs (can't find the links for these ones)
- 2019, June layoffs
- 2018, June layoffs
Also, to be clear. I was not one of the ones laid off. But I did see my entire team besides my manager vanish one day and then be told I'm expected to do the team's work for the next 6 months.
Patreon has a great mission though and I can see how it would attract creator-focused team members. There are some impressive Patreon alumni in their own right.
Yes, sure, they have to dilute the company a bit by creating more stocks for the people buying it, but if your company is in enough trouble that you're laying off 1 in 6 employees, it seems financially wise to effectively be doing many small rounds of fundraising this way. It extends your runway some small amount.
But it's not all that great. Patreon is not publicly traded, so it seems likely that exercising any options will require cash up front, plus it will immediately trigger taxable compensation (income tax plus FICA). And how will the FMV be determined, if there is no public market trading? (ans.: usually just some number voted on by the board). It may well be that the options are never worth anything even after the extended period.
It is clear that these are not ISOs (statutory options), because statutory options by law only allow up to 3 months to exercise after employment ends.
Layoffs suck but I found the extended exercise windows and other benefits to be rather pleasantly responsible given the situation.
They are likely NSOs and with an extended exercise period the former employees do not need to exercise them. They can just hold them and if within 7 years there is a liquidity event, they can exercise & sell. The taxable event would only be upon exercise, so in the case the former employee just holds the options (which is almost certainly what they’ll do), there is no immediate tax impact, nor any sadness about the options expiring. Upon a future E&S they’ll have taxes to pay but also money from the sale to pay the taxes.
Yes the situation could be more complicated if the person were trying to optimize the tax situation but I think that is very unlikely to apply in this situation. Just hold the options and be happy.
And really PopAlongKid, why are you so critical when you really have not even a basic understanding of how this works?
And if Patreon is acquired some day rather than going public, the employee shares are probably going to be last in line after all the VC money (preferred share classes), and maybe not worth anything. I went through this when I worked for a dot-com startup in the early aughts. Even if they do go public, there will probably be lock-up periods to restrict the immediate selling of shares, and then you are at the mercy of the stock market, where the value of the company (which you long ago stopped having any input to) could well put your shares into loss territory.
It's not a unique benefit, many companies offer the extended exercise window, but it is very good for employees because otherwise they have 90 days to exercise or abandon the options.
In your mind you are imagining somebody with a few options that are barely in the money. What if somebody who got laid off has worked there for 5 years and is sitting on super valuable options. With no extended window they'd be in a huge pickle where they'd either have to abandon all their options or pay a huge exercise/tax bill right now. But with the extended window they don't.
Neither of us can predict the future of patreons valuation so you shouldn't assume things are going to go badly and thus this benefit will not matter. The whole point of stock options is the option part of it. Maybe it will be worth a lot, maybe it won't, but you'd like to wait and find out and shouldn't have to give that up because you were laid off.
Incorrect. Yes, one would not exercise options that are already underwater, but once you own the shares and there is a post-IPO lockup period[0] you most definitely can lose money on the shares, money on which you already were taxed at ordinary tax plus FICA rates. Try looking at the volatility of company share prices in the period immediately after their IPO.
>you really have not even a basic understanding of how this works?
You also have not addressed the strong possibility of being acquired rather than going public. (Ex-)employees do not make any money until after all the VC people do, and there may not be much left.
Again, I never said this was a bad thing, more like a "meh" thing.
[0]https://www.investopedia.com/ask/answer/12/ipo-lockup-period...
Yes preferred share classes exist, this is irrelevant to whether or not the options have option value! I'm not guaranteeing that Patreon stock will be worth a lot of money, only that it might be worth a lot of money.
This is "mid", as my friends have started to say
Edit: I read the link and it appears to apply to RSUs as well. What I said about options is true but RSUs, different story. I’d sell those for sure.
Why do you think that?
It doesn’t require ‘very, very good luck’ for most companies shares to not collapse.
If you work for a big company like Oracle or IBM your options have cash value no luck needed.
What? These are public companies; short-dated OTM options have > $0 value only in volatile markets. But these companies don't pay employees in options.
> We’re waiving the one-year equity vesting cliff for all departing employees so that everyone has an opportunity to be a shareholder, regardless of your tenure. [...] All departing teammates will qualify for an extended option exercise period of 5 years, and we have extended it to 7 years in regions where we are legally able.
It must be jarring to be on the receiving end of a layoff. In the grand scheme of things, a laid-off employee surely has bigger things to worry about... but I still think what they did here with the equity, especially the option exercise period, is a nice touch. Not many companies do this sort of thing, but they should.
[1]: https://blog.patreon.com/a-note-from-jack