When the hiring market is tight you might keep them on longer and try to mentor them up to par, but when the hiring market shifts and there are a lot of great candidates on the market it's better to let the underperformers go and re-fill those jobs with great performers who are back on the market for whatever reason.
They're still hiring. This is more like cycling out hires that didn't work AND some collateral employees who unfortunately got lumped into those teams and cancelled projects. Often, the great employees who get "laid off" are quickly scooped up by other teams within the company who need their talent. It's not good business to let great engineers go.
I see - if they are cycling out the lower performers and hire recently laid off people on the market for a bargain, then that kind of makes sense, assuming they are not in a hiring freeze.
The strategy probably works regardless of macro economic conditions assuming you let go of "lemons" at a greater rate than you hire them, but it seems easier when the market isn't being flooded. You could maybe argue that layoffs at other companies are reducing the proportion of lemons, but it's not clear to me.
I think reducing headcount gives an immediate outlook of lower expenses without affecting revenue in the medium term. Tons of employees at these companies aren't working on projects that will have monetary significance within several years if ever.
They don't only hire recently laid off people. Most people who apply do that for other reasons I think. Also, maybe eg Google s recruiting accuracy is better than other companies lay-off accuracy
I suspect that despite being rich, headcount is expensive. If the median googler makes 300k, it probably costs Google 500k to employ. A team of 100 is $50M! A news article claimed google hired 10k people in Q2, so that'd be $5B in commitment (probably actually less, but on that scale). Doesn't take many quarters of that sort of growth to outpace income.
The median googler does not make 300k. The median Google engineer/manager in the US might make 300k but Google hires plenty of people in other roles and in other countries.
Actual number was 295,884
I chose a round number. Wasn’t too far off.
https://www.wsj.com/articles/what-alphabet-meta-and-other-s-...
This isn't about stock prices, this is about the strength of the underlying business.
Google's net income went from $16.4B Q1 to $16B Q2. Such an insane amount of money.
[Q1]: https://abc.xyz/investor/static/pdf/2022Q1_alphabet_earnings...
[Q2]: https://abc.xyz/investor/static/pdf/2022Q2_alphabet_earnings...
FB/Meta is the same- They have made some low key progress with Groups, have essentially wiped out craigslist as a marketplace, made some great strategic investments like WhatsApp, and essentially cut their potential replacements off at the knees by quickly copying snapchat and to some extent tik-tok, but Meta also seems poised to throw billions and billions of dollars into this Metaverse furnace, and I just don't see that working out.
I say this as a shareholder of both firms, that I have held since their IPOs or shortly thereafter.
[1] Take their home products for instance. There are nNest protects (smoke detectors/motion detectors), thermostats, cameras and doorbells... its an absolute layup to turn this into a security system far better than the crap ADT pushes. Yet... they just haven't for over 10 years now. And then they try to force a shitty subscription on you to use their cloud features that are really worthless, and have cut off APIs to third parties so I can no longer have my doorbell play through my Sonos. Its kind of maddening to watch.
As an employee, shareholders have to remember that sometimes stock prices go down, instead of hoping for cost cutting via layoffs.
Shareholders have had it good for a long time, especially during covid, with stock prices higher now then before the pandemic. Time to pay back karma.
Check my post history and you will see I wholly agree that stock price is an irrelevant metric.
much less uncertain than any other companies IMO. They're printing money.
In april they held a private concer featuring lizzo, then in july tell employees to increase productivity.
From lizzo to layoffs in two months.
Google has 3x more people today than when I worked there, and those people are working on the same products as back then. There must be some point which it no longer makes sense to hire more people.
The market is more volatile and less rational.
But why should they? If staff being cut is low performers, as companies stated, then it would be equivalent to burning money for no reason.
And why would they need justification? They don’t owe anyone permanent sinecures.
In reality that’s not what happens. Instead you get rid of teams, roles or high cost individuals. Why? Because it is much easier to deal with the work the let go individuals are doing and it impacts morale less.
I never saw a stack ranked layoff. The closest was demanding teams all lose someone. But that leaves teams with really good people getting rid of good people and teams full of dogs retaining them.
It also sucks for the employee, a PIP is really stressful not knowing what will happen next, will you get fired, should you start looking for a new job.
In addition, the PIP can take months to get to the finish. Maybe even six months in some cases.
A layoff takes way less time, but it does suck for the employee. I don't know which is worse. But if you have a good employer, you still might be able to transfer to another part of the company. Being on a PIP usually means your only choice is looking outside the company for a new job.
Layoffs always hit good and low performers, there is no way it can't. But if a company wants to get rid of a number of low performers at the same time, PIPs are not the way to go.
But with a layoff it's really hard to prove the layoff was targeted unless everyone in the layoff happens to be part of the same protected class.
Do American executives, investors, and start up owners not have the guts for even a moderate stock price drop? I guess the reaction is to cut staff, or threaten to, when there is a whiff of negativity. Fuckin weak.