How are they taking you as a fool? The point of a company is not to maximize employment, it’s to maximize profit.
That means hiring up in growth periods, and downsizing in contractions.
That’s exactly what they said they have done.
But they're trying to frame it as if they cared more about employees than profits.
Rant: If most people in our society simply decided this wasn't true -- and that, no, the point of a company is not to maximize profit, we could solve so many harms.
And frankly, believing this is optional. It's like saying the point of a person is to live as long as possible. Sure, you can choose to think that, but if you do, it would be easy to paint you as a villain. And, of course, thinking that way is completely optional.
And...just because many people do think that way doesn't mean we have to. We can choose to apply a different meaning to the idea of a company.
As someone that helps run a company, I very much think our company exists to serve our customers in a very specific way. Most of our economic success, actually, comes from many of the choices that would seem to fly in the face of short-term monetary gain.
Companies don't exist to maximize profit. Villains do.
As soon as this sentiment prevails, not only during times of personal loss, but also in times of personal prosperity, we can start to think of most humans as part of the solution instead of the problem.
And yet here you are, painting everyone who disagrees with you as some sort of maniacal evil-doer because what they believe is different than what you believe.
With even the slightest bit of foresight or financial planning, they'll be fine for months or longer.
It shouldn’t be an individual family’s responsibility to plan for its massively growing, massively productive, massively profitable employer to treat them like a wrapper to be used and tossed in the trash when done.
It’s evil to treat being depended upon to provide a means of food, housing, healthcare, and continued residency as something that can just be shut off without warning, to no fault of the dependents.
To a certain extent it's true, and it's only failing in the case of Google/etc because we've allowed mega-companies to become a thing (which distorts the playing field). OTOH we're rapidly heading towards total planetary extinction, so something huge needs to change.
There are dynamics where profit chasing can be perverted (eg. monopolistic pricing, fraud, etc.) which is why we have regulations. But profit chasing in itself is the best signal of value creation we have.
I've lived in a post socialist country transitioning from socialist to capitalist system and I don't want to live in a world where politics define value, profit chasing can lead to pathologies, but political value system is based on flawed principles.
The holy goal instead, is to maximize shareholder value. A small, but important difference (and helps explain the existence of companies like Uber and Twitter who have barely turned a profit in the past decade).
For these types of business, there’s always someone next in line to buy, hoping for the same performance.
If you are an investor, activist or otherwise, you benefit from the current practice that managers have a fiduciary duty to shareholders.
That’s risk avoidance - social mission would be driving around town giving free rides to people
A car is exclusively a tool, and a company is a tool from some perspectives, but involves humans. Hence why ethics are involved and there is no clear answer.
If instead you replaced car with horses, or worse yet, with human powered transportation would your answer be any different.
Some, like Amazon, immediately reinvest the profits into their growth and avoid taxes on the profits.
Some, like Uber, seem to exist to only sustain an illusion of future possible profits. Most of startups in the era of cheap money were manifestly unprofitable, and spent more and more attempting to achieve growth and grab the market share.
Beside these, there is a number of barely profitable companies that just exist to sustain their business and give the owners and a few employees some daily bread. Most small restaurants and small stores are like that. They maximize not the short-term profit but the probability to keep earning something in foreseeable future, a bit like subsistence farming.
The only 'harm' in question is that the other evil profit seeking villains are losing their source of profit, left to go back to do wonderful volunteer work at charities or whatever it is that is considered more virtuous. Crushing 12,000 villains in one fell swoop, perhaps Google is the superhero here?
Feels like so many people in the US has taken the Adam Smith self interest sentiment to the extreme, to the point that people seem to forget we are living in a society - a very interdependent entity that functions poorly if we don't work together.
"Oh, corporations have to be massively harmful entities that crush people under their feet in order to enrich their investors" is a choice. It is a system created entirely by humans.
This is what people say when they talk about how capitalism has so thoroughly won. People speak about it like it is a force of nature or a property of physical reality itself. There is no alternative. If megacorps don't abuse their employees and vacuum up dollars from their customers in every possible way then the line will go down, and we can't have that.
Just because Milton Friedman claimed that it is the main objective of a company to maximize shareholder value[1], doesn't mean it is true. Milton Friedman was a bad dude, and part of a bad school of economics[2].
[1] https://en.wikipedia.org/wiki/Friedman_doctrine [2] https://en.wikipedia.org/wiki/The_Shock_Doctrine
Second, why must the point of a company be to maximize profit? Why can't it be to make enough profit to remain stable in the long term, instead of growing rapidly to a size where it will eventually either have to engage in monopolistic behavior to survive or else, having extracted all available profit in its sphere, die?
How is this any different than any other industry? In manufacturing, slowing reduces the risk that supply will outstrip demand. In software, slowing down means reducing the risk that time is spent producing software that won't have an economic payoff. The effort is focused on the business lines that add to the bottom line and less on the speculative ones. If you look at where a lot of the tech industry layoffs are coming from, they tend to be the not-yet-viable moonshot ideas.
Put differently, take a look at the R&D costs of google[1]. Note how, despite a constantly increasing amount of investment, they still derive 80% of their revenue from ads. Granted, some of the R&D will contribute to ads revenue, but it may also be indicative of a moonshot strategy that isn't contributing much in terms of "real growth" in revenue streams.
[1] https://www.statista.com/statistics/507858/alphabet-google-r...
You are left with more complex product and extra assembly lines. You aren’t sure which ones you need or are obligated to continue - so you run them all.
It seems like the crux is here:
You aren’t sure which ones you need or are obligated to continue
This is essentially saying leaders/managers don't know how to prioritize. What much of tech is doing right now is prioritizing by cutting back on the programs that aren't particularly successful. It's the same thing done in manufacturing.
People on my team were fired today. They weren't my lowest performers.
We are still finalizing annual reviews. It couldn't have been current performance ratings. I know of some low performers on nearby teams who weren't laid off.
Some (many?) teams were entirely unaffected, so somebody up in my management chain decided my team was less critical. No clue how the individual people decisions were made.
A few may argue that corporations are super-persons imbued with super-rights which outweigh the rights of actual persons. Please note that's a minority viewpoint.
Secondly, corporations are not the only cast members with agency in this narrative.
Our government, the source of all that free money, acting on the goals of full employment and bountiful future tax revenue, probably has some agency.
Us individuals, whose blood and entrails lubricate the gears of the machine built from our bone and sinew, also have agency. Stuff like get fat and happy and watch our grandkids grow up, have enough excess wealth and time to travel a bit, to not bleed out in a ditch, cold and haggard, after a lifetime of toil. And most of us aren't particularly invested in further enriching the latest cohort of robber barons.
Friedman popularized the idea of fiduciary duty in the field of economics, and even popular left economists like Keynes didn't foundationally dispute that premise.
You can think it shouldn't be popular among economists for moral, aesthetic, or even empirical reasons - but to suggest somehow that the 1880s model of companies is "more correct" and assert it as truth is just as much a "myth" if you are framing these ideas about institutional purpose as "truth".
The robber barons you speak of have created the single largest reduction in poverty in human history. Most of the west, and even poor Americans are living truly historically blessed lives - and by letting the robber barons loose, the CCP was able to lift nearly 1b people to a standard of living unimaginable to Chinese people in 1970.
Capitalist thought and action is not immune to criticism, but the empirics are on capitalist ideas. Most of the common areas where Americans complain about "capitalist" processes are not capitalist under the hood at all.
Also it's beaten down that the purpose of companies is to make profits. Perhaps in some specific legal context or interpretation it might be, but the purpose of a company is mostly to do whatever the people in charge of it want it to do. A ton of companies' purpose is to principally do other things than just money. People running Apple and making phones like to make money & design beautiful consumer devices. People making rockets like mostly to go to space and hope they can also make some money. People running machine shops like to make moneys and they like to cut metal. People running industrial machinery like to make money and building CNC machines. People making cars like to make money and making cars. People running biotech companies like to advance life sciences and make money. And so on.
I had not just hoped but kind of expected that, if we ever felt reasonably safe going outside and eating at restaurants and shopping together at stores and such, that things--including, relevantly, advertisements on Google for all of those physical products and delayed services people might now want again--would kind of explode from latent demand and pent up frustration during the COVID period, not that we would only THEN go into a recession!
But like, I guess this is why we can say with certainty that I don't know much about complicated global- or even national- scale financial matters as I didn't know much about how--and very critically when--the Federal Reserve functions (having not had to care at all about this around 2008/9, when I had my bandwagon hitched strongly to the iPhone and everything looked amazing) and have never actively tracked inflation indicators as anything other than a numerical input for CPI wage increases :(.
2022 (TTM) $282.11 B 9.5%
2021 $257.63 B 41.15%
2020 $182.52 B 12.77%
2019 $161.85 B 18.3%
2018 $136.81 B 23.42%
2017 $110.85 B 22.8%
2016 $90.27 B 20.38%
Your numbers show that the revenue is increasing, but the growth is slower, which is very different than the revenue is falling.
Firing a bunch of people and killing some projects is a tiny price to pay for the potential upside. As humans, seeing people get fired is painful and we view the individuals responsible in a negative light — which I agree with! — but for Google the corporate entity, and Microsoft and Shopify etc etc it made complete rational sense even in hindsight.
They're not saying: "Hey, we knew this wouldn't last, but we hired a bunch of people in order to milk the situation for everything we could, knowing we'd have to fire you today. So, sorry we willingly and knowingly did this. But you're fired."
I could respect the honesty in that, but that's not what they're trying to say. They're trying to act surprised by the economic shift. "Oops, sorry we have to let you go."
Of course it was rational for them to all do this. Lying is often a rational thing to do.
Every message every company ever writes that leans on any amount of humanity is, in your characterisation, a lie… and while, sure, that’s technically true, we all take part in this big theatre production where we expect companies to pretend to have humanity — your problem is with all of us participating in this system pretending a company gives a single solitary fuck about any of us.
These performative messages are just one small part of the performance, writing an “honest” message where they say “you’re all fired and we don’t care” wouldn’t change anything. They’d still be doing a million other pieces of performative humanity.
They care a bounded amount.
A rough approximation of how much they care would be the rational incentives to not produce a culture of fear in the regular workforce + the amount of being nice to employees that Google can afford due to their dominant market position.
Similarly, when I shop for employers there are fringe benefits, cultural differences, etc that matter - but they aren't going to matter in the face of another $100,000 in salary.
Definitely wouldn't go somewhere else for a few hundred bucks tho.
For example, providing benefits above and beyond what other companies provide has a clear justification for the business: happier employees means better work from people that are better retained.
A good question would be: if Google stood to benefit from making their employees lives miserable, would they do it? I’d argue, yes, absolutely, and there’s much evidence of it. For example, Google (and many other big tech companies) pay human moderators low wages to do work that causes psychological damage.
Caring about people as people and not employees isn’t demonstrated by giving them nice benefits around the edge, it’s demonstrate by putting their humanity above their employment.
The gyms and perks are not purely a cynical ploy to make people stay later.
Google wouldn't make their employees lives miserable to increase revenue by 0.1%, because they care - the people at the top aren't literal lizardpeople.
This is where I bring in "bounded", because if that same choice would increase revenue by 100%, Google execs do it every time.
The exact lines change depending on local customs and competition (Google is a dominant market monopoly, so can afford gyms and adult playgrounds and all the really cringe Google perks) but it's also why low margin businesses have shittier working environments - there's more competition and less room for executives to care.
But: To whom did you owe honesty to when buying stock? I'm not sure you owed honesty to anyone there.
When you hire people, you're making decisions that have impacts on their lives and those of their families. In the case of companies like Google, they're impacting entire communities.
So I would say they have a moral (if not legal) obligation to be more transparent with their workers about their intentions. But you, in this stock situation, would not have any moral obligation whatsoever.
Did people not also take jobs at google in order to milk the situation for everything they could?
Could those people not have foreseen an economic downturn, which happens at least every 8-10 years the last one being 14 years ago?
What specific lie did google tell, or are you speculating?
I think your framing of this as a predictable cycle is deceptive. This isn't about regular crashes. This is about a temporary pandemic-driven situation. Yes, employees hired in the rush could have seen this coming. But it's unfair to assume 100% of them did. I don't think it's unfair to think it would be shockingly foolish for the entire tech leadership class to not have seen it coming.
All I'm saying is: Own it.
I'm not saying it was evil. I would probably have made similar decisions.
But I would have been more transparent about it. I would have hired people on contracts with the explicit understanding that this was surge hiring. That way no one would be surprised when the contracts weren't renewed. That would have been honest.
Sundar and other Google execs don't actually own that much Google stock, so they have relatively little lose by gambling with company money by over hiring.
From Brian Armstrong's perspective, Coinbase didn't overhire at all. They captured all the crypto revenue they could during the boom, which inflated their stock price while Armstrong was cashing out as much as he could.
The top individual insider shareholders of Google are Larry Page, Sergey Brin, and Sundar Pichai
Large scale disruptions cause governments to print money, and I think the IRA (which I assume is what you refer to) was in a way predictable, because government historically do infrastructure spending to keep the economy afloat after large scale disruptions. That the Democrats would push infrastructure spending on tech and eco stuff is not particularly surprising. Asian countries have been pouring their R&D in solar panels, chips, batteries, manufacturing, for years. The pandemic very early on made bare the US' dire positioning, versus Asian countries relative advantage in that aspect. I wouldn't have predicted the IRA but it's predictable that an infra bill would have come. That's what happened in prior cases.
I didn't expect the war in Ukraine, but we could expect wars. Trouble times create incentives (disparity) and opportunities. I sadly expect more large conflicts in the coming years. I think the average pragmatic person probably also does.
As for the current economic crisis, I'll go on a limb and guess it'll probably maintain itself for another 2-3-4y horizon, like prior ones did. And the boiling pot it will cause will be fertile ground for conflicts (and innovation).
When will the transition happen? If you knew exactly, like you seem to be indicating, you should make some money off of it. Otherwise hindsight armchair CEO is dull.
Can you point to any comments that people with a semblance of understanding made back then in which they were able estimate the rough time window when things would come back down to earth?
I don't know of a comment in 2020 that specifically say that, mainly because I don't keep a log and will not go search for it.
From [0] November 2021
Me: 'Finally' The start of the market crash is under way...
>> Stock market up 1% today on both this news and decades-high inflation. [0]
Then more concerns for preparing for the recession months later after I said we were already in a recession. [1].
>> No. That is completely false. We are most certainly not in a recession. [1]
So after many layoffs, rising inflation, US debt ceiling fears happening since then the lagging indicators of this have now take effect and so 'now' we are preparing for the recession?
It has already happened and is still happening which it is too late to prepare.
Nobody knew when and how.
They didn't. They knew it wouldn't last. But what they had to do was stay competitive and/or meet demand by scaling up while they could. Now they have a larger pool of talent and can cut people/programs who are too expensive or are under performing.
Unfortunately, it doesn't really seem the case (that and no one gets the credit for just keeping the system running)
I disagree. There's charts showing the proportion of commerce online vs offline and it slowly rises over time over the last 20 years. It's following a pretty stable trend. Until the end of 2021 or so, the data really really looked like there had been a 5-6 year jump ahead on the curve thanks to COVID-19.
The question was never "is this a temporary change", it was "how much of this is temporary and how much is permanent?". When the dust settled, would we see it go back to a 2-year jump-ahead? Stay at a 5-year? Go back to what was expected?
Nobody knew the answer. You didn't. You had a guess. And most people forget what their guess was once they know the answer, and believe they always knew the answer.
I just can't stand the pretense "oh no we didn't know we over hired" like come on. We _all_ knew y'all were over hiring. Just cut the crap.
I see this comment in much the same way I see a bear in a bull market. Stock X is $100 and Bob buys it. Carl tells Bob he is an idiot and the stock is going to go down. Stock X goes to $200. Bob sells. Stock X starts going down and Carl starts telling everyone he was right and he knew the stock would crash. In the mean time Bob is retired and has gotten everything he needed from that particular stock purchase.
From an outside (and employee) perspective, it can seem foolish though.
In hindsight, yes. But by that definition every decision is a coin flip, because no matter how good we get at predicting things, you are always and always making decisions based on past data, and that can't accomodate random 'act of god' sort of events COVID and Ukraine war was.
>>Everybody knew that free-money, COVID and related phenomenons were a phase.
There was no way to know COVID was a phase, we still can't say with confidence that COVID is over.
Are you making the same mistake they did and thinking in 0/1 terms? The last 2 years have shifted the future, but the shifts are gradients with few if any being absolute 0/1.
They're just putting a PR spin on it.
Don't humans almost always extrapolate their present situation far out in the future?
I think if you picture yourself as a population of 1000. Y'all are someone who hasn't used technology X before because you haven't yet had to, and suddenly you're encouraged to do so. The probability that you will do so now, instead of in X period of time, has increased. It's not going to happen all at once, but over some time, which means the adoption rate will compound. But like any adoption curve, some of y'all 1000 will churn, depending on how useful the technology proves out in the long term. What's the average lifetime before a user churn? You can guess for yourself, how quickly do you get bored with most of your new toys? Some toys stick around because you find them drastically better, some others you start ignoring.
So it's not that the online growth rate was temporary, but that it's (sorta) obvious that it was going to recede from it's peak. Like Pokemon Go, which is still popular but nowhere near as it was near day one.
> "Over the past two years we’ve seen periods of dramatic growth. To match and fuel that growth, we hired for a different economic reality than the one we face today."
I feel taken for a fool. Every damn body knew that the last 2 years were not representative of the future. Everybody knew that free-money, COVID and related phenomenons were a phase. I can't believe that Google, Shopify, Coinbase, everyone, really believed that this was the new reality going forward. It was written in the sky since April 2020. Anyone with a semblance of understanding could guess that the COVID-fueled situation and artificial economic prop up would come due in the medium term.
Really either the folks writing this crap take us for fools, or they're really shortsighted fools themselves.