This is actually a pretty big step, but the move will need some benefit to the company for it to become more common-place.
They might roll these bonuses into subsequent bonuses, but that may actually end up being a motivator if these bonuses are truly forfeit until things are improved by the executives.
That truly means "taking ownership" of what happened.
The individuals leaving were not the ones who hired or authorized the hires without the evaluation of long-term viability for the organization. They were just doing their jobs.
There is a difference.
…and the stakes are even higher today if you count the number of people impacted by poor decisions.
Accountability means (from every definition I’ve found!) taking responsibility for one’s actions and their consequences.
Falling on one’s sword has, from what I’ve always read, has been portrayed as someone accepting too much responsibility, to the point they actually avoid dealing with the consequences of their actions and make the situation worse overall by killing themselves.
After all, no need to actually work hard making amends or doing better if you’re dead, eh?
And it can even make the person doing it somewhat of a martyr, even if they created the whole situation to begin with, as it can make it look like those calling for it or pushing for retribution were actually just looking for a scapegoat and the dead one is actually a victim.
My connotation has always been ritual suicide.
E.g. Seppuku in Japan, captains going down with the ship, ect.
The origin of the phrase in the west stems from the roman practice of military ritual suicide following defeat. It was more a matter of honor than seeking victimhood.
A captured general represented an embarrassment to the empire, provides the enemy with a hostage, and would likely be tortured to give up information. Suicide in defeat was honorable as it served the empire and denied the enemy leverage.
https://en.wikipedia.org/wiki/Category:Ancient_Roman_militar...
That said, I think it is a huge stretch to translate this history to the context of CEO accountability.
If someone (going down the ship wise) doesn't get on a lifeboat when everyone else has already gotten off, then yeah it's probably more about avoiding actual accountability (aka having to stand and take responsibility/long term consequences).
Regarding Victimhood/Martyrdom, there are many apocryphal accounts and personal anecdotes one can throw out. You'll get stories anyone in senior leadership when a CEO gets pushed out, to [https://en.wikipedia.org/wiki/Ch%C5%ABshingura] (specifically Lord Asano), to Gnaeus Domitius Corbulo [https://en.wikipedia.org/wiki/Gnaeus_Domitius_Corbulo], and many others.
Sometimes folks want blood, and they won't be satisfied until they get it. And often someone either stupidly volunteers (actually), or gets 'volunteered' by their boss.
Also, how is killing yourself quickly and (relatively) painlessly after a military failure NOT the relatively easy way out - instead of say, dying while fighting the enemy to the death (probably horribly disfigured and maimed in the process), or dying in torture while not giving anything up, or dying while trying to save the ship and the other crew, or returning in shame and being a social outcast, or dying after being shamed in trial followed by an execution, etc.
Literally all those other options can seem a whole lot harder than a gladius through the solar plexus at the moment. Also, notably, sometimes folks had 'help' on that last bit, though rarely was it featured prominently in the PR.
Seppuku - similar. Rather than 'living with dishonor' (aka being outcast from a insular and all encompassing society), or having to stand trial and defend yourself and getting shamed then executed anyway, etc. it's killing yourself 'with honor', so your family doesn't get their benefits taken and similarly outcast (as badly). Seppuku generally involves the second beheaded the person before they've had a chance to suffer much too, though there have been famous 'mistakes' made at times.
It also could be ordered by the Daimyo, Shogun, etc. and it was pretty common (from accounts at the time) for folks to be thrown under the bus and ordered to commit it if they didn't succeed at what the lord had ordered them to do or were just being inconvenient to the narrative. Including significant 'help' from seconds. Which is, well, pretty much the example of a scapegoat.
>Falling on one’s sword has, from what I’ve always read, has been portrayed as someone accepting too much responsibility, to the point they actually avoid dealing with the consequences of their actions and make the situation worse overall by killing themselves.
Yes there are differences in my examples. Captains are on boats, and Samurai are in Japan. I'm not trying to say they are identical in every way.
The common factor is that these actions are all seen as honorable positive within the context of the society where they took place.
I get that you might have your own personal take and values on these types of actions. People could have suffered more or made a more utilitarian Choice if their objective was the greater social good.
Yes, I'm sure many people have been made to fall on their sword as patsies. However, I don't think that changes the common understanding of the idiom, or how the practice was viewed in the historical context.
You may see it as the coward's way out to avoid living with shame or fixing your problems, which is fine. I just don't think it is an accurate depiction of how contemporaneous people viewed it. People did not look at a captain going down with the ship or a general falling on their Gladius as a coward dodging their responsibilities. I don't think most people today feel that way either, but obviously there are exceptions with you being one
Unless the Captain saw everyone off in lifeboats and then stayed on the ship (very unlikely), it’s far from what you are describing and I was clear on that.
I also pointed out that the actual reality on the ground is almost never what the mental image or PR is meant to instill, and is often (in reality) a way to take someone out somewhere and pin all the blame on them.
I very much doubt, for instance, in ANY of those examples I gave, they actually did what they were said to have done in the way and for the reasons they were said to have done it.
But there are situations where it definitely is the easier way out to do it that way literally.
Someone who gets into an obstinate fight with a boss over a minor issue, or who does something common and then when it turns out it’s a problem stands up and tries to defend it, and then gets fired, would be a common use of the idiom in my experience.
A Phyrric victory, ‘he picked that hill to die on’, he died tilting at windmills’, etc. could also be used.
I wonder if you hold this level of rigour towards your own failings and shortcomings, or if this desire is directed exclusively at everyone besides yourself.
People lost their livelihoods, and in the US, their access to affordable healthcare until they figure out a new solution or get a new job.
To be fair, it's only a pair of random internet forum posters who are complaining that this is not enough. There are plenty of people in this discussion arguing otherwise.
So, for those keeping track, Mr. Yuan is giving up about $300k in cash, but still receiving about $13M in stock. That's a 2.3% level of "accountability".
It also makes it hurt more when you are laid off and the illusion is broken.
You only ever work for yourself. A single employer means you have a single client. It also means you only have one source of income. That is always risky, because work done for others is always temporary. Honestly full time employment is way way -more- risky than being an independent contractor with a few small predictable retainer contracts.
Also key to remember is that no matter how rewarding and interesting the work is you will eventually lose access to that too unless you fought hard enough for it to be open source.
If you want a job where losing that job is tantamount to company failure, start your own business. When it fails (and statistically it probably will), your failure will also lead to your job loss. Congratulations.
If you "have a job", you're accepting being a cog in a machine that's primarily not about you. I make that trade-off, as do most people, but don't mislead yourself about what's going on.
That said, the swings tech stock over the last couple years have very little to do with his leadership. Yuan is not responsible for the tech bubble and its deflation. No human on the planet could have made zoom hold its peak stock price.
It doesn't make sense to accuse someone of not feeling the economic impact of a downturn at all while downplaying the fact that they actually lost $5billion.
If you were serious or had devoted any thought into the issue you wouldn't even consider the silliness of framing a $5billion loss as a lifestyle issue.
But at the end of the day, he won't work for nothing if you took all of his comp, so fair accountability is not really possible in this light.
Did the workers build the company? Did the capital build the company by providing the pay to pay the workers?
Did the workers take any risks? Or did they sign an employment contract, and get paid the same every month regardless of performance? Their only risk, that the contract will end, perhaps unexpectedly [1]?
In the case of small private businesses (which of course the vast majority of businesses are) did the "Capitalist" worry about making payroll this month, get short paid when cash is short, try and predict the future, make tough decisions when things go wrong, and somehow be a human?
Of course the socialists believe the capitalists should keep those people hired forever (or better yet, not hire them to begin with?) - ironically that's what the capitalists want as well. But life happens and hard decisions have to be made.
[1] risk costs money. If you have one employer you are at risk. As much as you can, hedge this risk with liquid savings. This has been good advice for thousands of years. Most workers live so close to poverty that this is unattainable. However folks at (big tech whoever) have the means to do this AND get decent severance, so I'm not crying for them just yet.
Except, lately anyway, those people were probably already living close to paycheck-to-paycheck, as many low six figure earners are in this horrible economy. Whereas, the CEO and other execs will likely not even miss the money.
The cynic in me suspects that this is going to trickle down - there will be 20% salary reductions for everybody, and this will become a trend just like the layoffs did.
"Hey, we are laying off 3,000 people. Because of that, I am firing myself and the company will no longer have a CEO and will have to find someone else, starting immediately. In addition, I plan to donate all of my life's savings and file for unemployment like everyone else and, if needed, live in my van down by the river. I hope this makes everyone feel vindicated and that the scales of justice remain balanced. God Bless."
A team does terrible for awhile -- should the coach be removed? A company does terrible -- should the CEO be removed? This is what accountability means. Just this year I was hired by a Board Of Directors, of a startup with 150 people, to do an evaluation of the technology and code, and I found epic levels of tech debt and irresponsible decision making. When I gave my report to the Board Of Directors, the Board responded by firing both the CTO and the CEO. This seems normal to me.
All laying people off means is that there are items that the company will not be executing against in the future. It may or may not mean that they're in a bad spot, but very often - and the case with many of the current tech giants laying off that we're seeing - it simply means they grew more than they needed for the road ahead.
Whether or not that's good or bad is a fair question. It was asked on a previous thread whether we as a society should be comfortable with companies gabling with the jobs of their employees, and I think that's a worthwhile question. But it most certainly does not mean that a company is "doing terrible."
If you're hiring in bulk to tie up talent your competitors might want during a boom, and then promptly firing thousands in the bust, you're bad people and should feel bad.
But then, to paraphrase Upton Sinclair, it is difficult to get an executive to understand the impacts of their decision when their compensation package depends upon them not understanding it.
If the Board fails to do its job? What, then? Yep, shareholders have to intervene.
Which leads to what happens if the shareholders themselves don't figure out what to do or the right-decision to be made? Well, they lose a bunch of value as the company's value [eventually] plummets.
I have to assume it goes beyond just not following best practices, and perhaps into deep levels of pointless "not invented here syndrome" or some other massive waste of resources.
A BOD doesn’t hire someone to do this without there being some suspicion within the board that there is an issue. That board was likely divided on keeping one or both of those individuals and your results were used to sway votes.
For the bad PR you’ve created, if for nothing else.
1. Yuan should immediately terminate himself as CEO, and his salary/bonus should be divvied up among those who were [IMPACTED]. In fact, all 1,300 people should be named co-CEOs and together they shall lead the company to prosperity and avoid such a boneheaded misstep in the future.
2. He should have to give his life savings to those 1,300 people. His family should live in squalor going forward, effective immediately.
3. He should be imprisoned for fraud, for no fewer than 25 years —- or ideally sent to a North Korean prison camp, if such arrangements with DPRK can be secured.
That’s what true accountability looks like.
However your solution, as seen from outside that pain, is "worse than the disease".
Firstly it's worth pointing out that most (but not all) layoffs right now are a result of over-hiring during the pandemic. Now, granted, those jobs didn't last forever, but they did last a while and kept a lot of people working during a time when a lot of people couldn't work. It would likely have been very profitable to not make those hires in the first place.
Secondly, you are proposing penalties out of proportion to the mistake. Or put another way you are strongly disincentiving hiring in the first place.
The more penalties there are for failure, the lower the chance that people will try at all. Your suggestion that over-hiring leads to criminal fraud, or personal destitution, has out outcome - no one will ever hire anyone.
In a private company the decision makers are typically the owners. They're taking risks everyday, spending "their money" and working hard to keep everyone employed. It's a weighty responsibility. But life happens and things don't always work out as planned. Management-via-hindsight is easy.
The comment literal dripped sarcasm
I mean honestly…you thought the above (emphasis is mine) was serious?
I'm kidding, of course. Layoffs rarely represent failure, they're usually just a cost cutting measure to increase profitability and make shareholders happy. They're just framed as failure every time because people take more kindly to "we had to lay 15% of employees off because of the economy" than "we had to lay 15% of employees off to meet our quarterly growth goals".
Any CEO in his position is accountable by default. They lose a literal fortune when the company doesn't perform. This meme of "but how are you taking accountability" confuses the heck out of me given this context.
This is the way to notify people of a layoff. Immediate binary yes/no.
Although there is no great way to do it, this layoff seems pretty respectful and well done.
- invite everyone 2 weeks before to a townhall named [REQUIRED] An update on your employment
- read the names of the fired people from a fancy envelope
- when someone is called, their corp access is revoked in real time and they are kicked off the call
Having been through it, let me tell you that's a gut wrenching n minutes to wait, though.
*EDIT: Ah. "Negative acknowledgement." In other words, someone hears from them regardless of whether they're impacted or not, i.e. [NOT IMPACTED].
No, it's robotic, and pathetic.
They'll soon be writing these lovely messages to their employees, as well as you're fired emails with ChatGPT.
Which way do you feel its the best way to be notified you're being fired?
I'm sure there is no good way of getting the news.
It's at least something more than we've seen from the majority of other layoffs. The severance is decent too so it's hard to deny Zoom's handled it better at least relative to how others have
the biggest reason these companies are getting flak is due to pretending they weren't like other industry "soulless corporations". People naturally don't like hypocrisy, you can't LARP like your employees are family to squeeze productivity out of them and then drop them at the slightest downturn in profit.
the social contract has been broken for the worse between employees and companies, people just need to act accordingly
Would you like this guy to commit hara-kiri?
(I meant some people will, I personally don't expect anything, and don't really care - none of this is in my power in any way, shape or form.)
Or at least, to give the rough date at which he will resign, so that someone more competent will run the company, avoiding the mistakes that brought it so bad that it has to lay off 15%.
There are mistakes that you can recover from, and you don't fire an exec (or anyone) at the first blunder. But if you have to cut an arm to recover from your mistake, you have to be shown the door, or at least the direction of the door.
Baring that, he can substantially reduce his income in the next few years, so that the company can be more generous with the laid off people. Reducing his salary is a step in this direction, but we don't know how the structure of his compensation - salary might be symbolic.
Also, has he made clear to his board that the situation is so bad that shareholders will also have to chip in, and accept reduced or no return on their investment for a number of years ? Again, sharing the burden.
Again, in the grand scheme of things, this is a least closer to "taking responsibility". Just, not there yet.
Disclosure: I was laid off by a big tech company and I think it was BS.
Zoom's revenue grew like 10X over the past two years. They had a legitimate need to hire and grow the business, and now the market has corrected and they don't need as many employees. The hiring and firing decisions are exactly what I would expect from someone optimizing solely for the well-being of the company.
It sucks for the people fired, but that doesn't mean the CEO did a bad job. It means you need to be realistic about what your relationship is to your employer.
There are plenty of companies that exist in very cyclic industries who show the right way to handle this sort of thing. It's not like it's all a big mystery.
This is not self-evident. Hiring the salaried employees over 2+ years could very well be cheaper than contractors.
If they had under-hired during to boom, then we would not have layoff today but the company would not have grown as much. The incentives are set to hire people when you need them and fire them when you don't anymore. Layoffs are not expensive or damaging to the company; they don't have any reason to avoid them. Zoom's stock went up in response to the firing.
The companies I'm aware of that exist in cyclic industries (game dev, retail) tend to either have brutal cyclical layoff periods, leverage a ton of contractors, outsource their work to other firms, or hire seasonal workers.
What in your view is "the right way to handle this sort of thing"?
Don't lead people to think that their positions are permanent when you know very well that there's a good chance they aren't. The easiest way to to make time-limited contracts. That doesn't mean you can't give them benefits such as health insurance.
I'm sorry, but this is the most hindsight is 20/20, armchair CEO thing I've ever heard. Unless you have some sort of magic 8 ball, there was nothing clear about it being temporary, a blip, or any timeline of such.
Is this how we're going to forever define an "employer"? I agree with your sentiment broadly, but what a terrible system we've created for ourselves.
How is this a "terrible system"? What is the replacement system, if so?
Should companies ... what? Provide make work projects? Build things the market will not support?
Or should companies just sell shares, then use the money as a form of welfare. Turn companies into a way for people to donate, so engineers can make 10x what the average employee does?
And by quitting, giving up any power or doing that job he is doing less bad than others?
How did that work out for Senator Franken? Or the Democrats in general?
I swear, it’s like folks can’t help but cut their nose off to spite their faces.
I'm not forcing them to write the words.
If they want to say "we tried, it did not work, the economy got worse than we expected, yet we think we're still in the best position to run the companies, but we have to make hard decisions now", that's their stuff.
I wonder how it would play out for any other employee using this strategy in performance review.
"I take full responsibility for not fulfilling my OKRs, and therefore I will demand that your fire every one else in the team to afford my promotion and raise."
I’ve yet to see any line employee willing to take a major pay-cut because they screwed something up.
The analogy might be a saleperson violating a minor policy to ensure a sale. They would take a fee for violating the position, but their sale bonus would compensate.
Their first "blunder" would have been lying about their security and sending encryption keys and private data to china (https://citizenlab.ca/2020/04/move-fast-roll-your-own-crypto...)
Even the most generous and forgiving view of Zoom makes them look completely incompetent and unfit for anything you want secure/private. A less generous view would see Zoom as a deceitful and malicious tool for data collection.
At this point, after so many lies and security issues I honestly can't believe anyone trusts Zoom for anything even remotely sensitive, but I'd think even the most trusting people would agree the company has a history of terrible actions/choices and the CEO is the person who is ultimately responsible.
I hope the employees who were laid off find satisfying work with a much better employer.
Did they heap praise on this same CEO, when he hired, provided jobs, record salaries, and more?
Even now, after these layoffs, this same CEO resides over a company worth immensely more, with more employees than 2+ years ago, and at excellent salaries.
So where were the praises before the layoffs? Because that's the logical inverse of the current behaviour. If not, then all these complaints are just immensely hypocritical.
Yet responsibility is a two way street. And it embues more than one stance.
So you will work with dilligence to help the company, take pay cuts, work overtime when times are tough, work for free, struggle and strive and sacrifice, for just as (in your world) the company should maintain your employment through thick and thin, you should do the inverse, yes?
And by this logic, jumping ship for greater pay is questionable too, for what of your obligations? And leaving if given a pay cut in bad times, is wrong as well?
You see, the transaction you envision is framed by a transactional nature. Most feel little obligation other than the metric; I work, you pay.
(This does not discount joy in work, nor happiness at a job done well. It is merely that this is the exchangeful nature I speak of)
And that is the metric all employer/employee relationships are legally, primarily construed.
If you move for a job, negotiate a moving allowance. Thus, you will not be harmed by that loss and cost. If you take a job, ensure severance is a clear and unencumbered thing, and so on and so forth, so you do not lose in this equation.
And if you are at the start of your career, and incapable of such negotiations, due to lack of clout, then you are fortunate for that hire, and in a sense, continuing your education, as your first job teaches much, and thus should expect such things at the first.
But all said, this is merely how things work. Few hearts bleed for the janitor in such situations, or a construction worker, or an employee at mcdonalds.
Yet for the tech worker, replete with 10x these salaries, with perks, with jobs considered cushy by many, the blood of bleeding hearts flows freely, along with the bleating of complaint filling the air.
I have little sympathy.
But seriously, once MS Teams rolled out video conferencing, I wondered how long Zoom will manage to stay around at all.
At least the last time I used MS teams, Zoom had a much better 'upper limit' for participants in a call. Both from a 'hard limit' standpoint as well as an 'after this number the experience degrades'.
To say nothing of dealing with an outage of microsoft services and needing to get on a call to resolve...
That's probably because M$ switched away from bsd to windows again.
When it comes to industry directly related to life, like health, pharmacy, electric/fuel, housing - those kinds of choices made should result in prison.
I mean, sure, it would've been better to not get laid off. Obviously!
But do you really think you would've been better off working somewhere else?
Almost everybody that did get laid off was better off working where they did and enjoying the boom for however long it lasted.
Before someone replies - I know there's exceptions. You moved, you bought house because of your job, just got pregnant, etc. I get it. Obviously layoffs don't impact everyone equally.
But I think a strong majority of people that got laid off were better off working where they did for however long it lasted.
is it realistic to ask a company not to hire if they think they're just going to lay people off 12-18 months later or is that too perfect of a science?
obviously you don't want to ask companies not to try to grow/be conservative because then we'll have too much unemployment... i think?
it's just so "convenient" the timing of all of these layoffs. it's like because one company did it, the climate is "ok, it's acceptable, let's do it now while we can squeeze it in with everybody else doing it so we don't look so bad/get singled out"
i get it, monetary rates/fiscal policy changed. but the fed has been signaling this change for months, going slow. how long has zoom known they need to layoff 15% of people? they've probably been carrying this "weight"/burden for a while?
Then candidates might have made different decisions, like "Maybe this job isn't worth relocating my family internationally for."
It's pretty Machiavellian to present the role as otherwise, when HR had strong suspicions it'd be first on the chopping block.
Does a company have to do this? No. Of course not! And it's not even in their best interest to do it.
But does it make them ethically shitty to optimize their offer attractiveness at the expense of people's lives? In my book, yes.
It also ignores that contract positions are a huge liability in California.
Zoom has little control over the overall societal state of ‘social contract’, they can just pick where they are relative to it and then reap the effects of that.
If they never laid off anyone, in this environment that has effects too, and it will look different than if this was the 50’s or 60’s or whatever idealized situation we might imagine.
Even symbolic gesture is more than I have come to expect these days. While it may not be what is demanded, I welcome it as a welcome change.
That said, I disagree with the categorical phrasing. Clearly some reduction would make an impact ( I think we agree that 100% would; if so, at this point it only becomes a question of what is reasonable ).
To your point, if one has a habit of spending lavishly, it seems fair that the source of funding has to come from somewhere that isn’t this year’s paycheck, but it seems like the end result would be a faster-than-planned depletion of resources rather than impacting day to day living. And he’s presumably back to making normal salary within a year.
Still, day to day living expenses are in the eye of the beholder. Once you get to that point, you do miss little comforts in life like being able to eat endangered penguin pate or rent a sub party at mariana trench. It is harder to justify that expense when you just had your salary adjusted. Not impossible. Just harder.
<< And he’s presumably back to making normal salary within a year.
I am tempted to set myself a reminder to check, but I don't think you are wrong by saying that.
The equity grant that they receive is often millions more than the salary and the company performance bonus.
I think forgoing the equity and instead adding it to the severance pool would be truly owning up to the decisions made by executive management.
It's not that I think the guy is a saint or anything, but many CEOs conduct layoffs and write about how sad they are without making any financial sacrifice. So even a limited gesture of giving up ~30% of his potential gains this year is unusual by prevailing norms.
What about equity grants?
Don't really think it diminishes my point.
It's completely not comparable to a CEO hired with no initial equity stake.
Just for illustration. The 10% stock price jump this message caused just earned him $500+ million
As another commenter noted, the layoffs made shareholders money. Assuming the board is largely made up of equity holders, a clawback would punish exactly the sort of behavior and performance they want.
Equity confers different responsibilities, rights and, yes, paydays than labor. Acting like every hit the latter takes should somehow mean a haircut to the former ignores that.
So he goes from making over $1mil USD to $6,000/year. If the above is correct.
The salary alone should be enough to keep a couple people around. Yes, that doesn't make a big dent in ~1300 people laid off. But I imagine for those being laid off it's slightly less shitty (still super shitty) knowing that the CEO isn't still making 7 or 8 figures, like at most companies.
https://www.sec.gov/Archives/edgar/data/1585521/000119312519...
But on the other, as you note, it’s just a symbolic thing. As such, a large part of me feels, do we really benefit as a society for those increasing even more the extent to which virtue signaling is institutionalized?
So I agree in spirit, but worry that this is an under appreciated long term risk to business culture specifically, and society more generally. “Symbolic” on some level really just translates to “BS” and we have more than enough of that already.
If I remember correctly, Steve Jobs had a $1 salary.
And a Learjet.
A lot of these folks don't make most of their money from salary. If his main income is from stocks, then he may actually be doing fairly well.
Unlike Steve Jobs though, the Zoom CEO won't be able to back-date his options to collect a cool $20 mill in capital gains [0]
[0]: https://www.cultofmac.com/443542/steve-jobs-apple-stock-back...
Fairly standard type of literary trick.
Doing this and saying nothing might have had a similar degree of sanctimoniousness. I guess I think that if he thought this was a good idea he should have waited a few days to do it quietly, instead of pretending to understand the struggles of the employees in his own personal financial life.
However, if it helps some employees process it maybe it's worth it even if it rubs some the wrong way, like it would me.
No big corp CEO will ever be accountable for anything.
wouldn't be surprised if is a white lie or straight lie.
with corpo-speak it's often more about what isn't said then what is.
It’s nice to see the phrase “I am accountable” followed by a description of what that accountability entails.
Whether or not the steps taken seem fair is a separate conversation, but it seems like a step in the right direction.
When you’re making CEO salary, no amount of salary reduction will have a day to day impact, but this seems strongly symbolic at least.