1. Many of these companies had year+ long hiring freezes as a prelude to layoffs
2. Companies that overuse hiring freezes end up promoting over hiring in periods where there is open hiring as teams hire in anticipation of not being able to in the future when they might need to
Simply having a hiring freeze means you hamstring high priority projects you'd have allocated resources for, while letting others that may lower priority ride due to inertia.
To be fair, this is true in all fields.
If you chose to save a few bucks by hiring limited devs, that's a choice you made. In our orgs, the guy who moves CSS boxes for a living absolutely can write some SQL queries. Most places don't write database code, they write code that uses an ORM or other framework to interact with existing databases.
Do you think the ad sales guys can help with the Square integration?
Or let's say you've decided to bet your social graph / web / mobile app centric company on VR. How many of those existing devs are going to be useful in VR if you have a hiring freeze? Or when you realize it's a debacle and scale down VR, how many VR devs are going to be good iOS app update churners? Etc.
Wrong team sizes, wrong skillset matches, etc.
EMs become greedy and hoard whoever they have regardless of the quantity need or size fit.
Now they just use the old "never let a crisis go to waste" to let those who isn't good enough or overpaid go anyway
Where are these companies you speak of?
I'm not talking the large scale stuff like Meta assuming the metaverse was a trend that would require their company to grow 50%, but the medium scale stuff like a department in a 1000 person company putting in to hire 12 people instead of 8, etc.
Every place I’ve worked I’ve heard things like “you better hire someone for that req before it goes away”, “if you think you need 4, ask for 6”, “make sure you don’t lose that backfill”.
Got myself a call from some Meta recruiter just a week before the announcement in November.
And HashiCorp had opened positions listed on their site too.
When the Twitter drama started yesterday I searched LinkedIn for posts from hashicorp employees announcing they have been cut. In the first hours it was recruiters, project managers, and customer success people
My guess is they will also freeze hiring more recruiters
Another point is there used to be natural attrition in tech, during the great resignation it was even higher than normal. You plan ahead assuming some people will leave, and when things get bad and no one leaves, you’re stuck with more people than you budgeted for
I really think that there isn't a rational reason for doing so, it's just CYA all the way up.
You can change the rules, but probably not if you're publicly traded... unless you're Apple.
Nobody will leave voluntarily now if they joined during the 2020-2022 hiring boom and they know are sitting on ludicrous compensations which they know they won't get anywhere else in the current economy. So unless they're stellar engineers with top offers in hand, they're more incentivized to sit tight until the market recovers instead of leave empty handed in these uncertain times.
Waiting for natural attrition now means the poor/mediocre ones who don't have better options will stay, and only your best will leave voluntarily, which is exactly what you don't want. Ideally you'd want to cut loose the dead weight holding you back and prop up your rockstars so they stay.
Maybe just maybe they're aligned with the shareholders' very short term interests, but not with anything useful in the long run.
Unfortunately there is something extremely toxic about VC money(not saying it applies to Hashicorp) which is that growth is defined in headcount.
If it’s hard and/or expensive to measure, it’s likely better to just grab another startup instead.
I don't know about HashiCorp in particular, but usually, there's enough metrics for a company to see that they are headed into an overstaffing situation and work to correct that without layoffs. A true hiring freeze combined with natural attrition rates goes a long way. It varies, but a 5-15% for attrition is pretty common. And you can offer incentives for early departure to bump that up.
Also, depending on industry, there are other levers to reduce cost or boost margins that you could pull before resorting to layoffs. Including both labor and non-labor levers. Layoffs often feel like the lazy path.
Having said that, I mostly agree with you. If they are selling the market on growth, there's no way to do that while simultaneously letting go 1 in 10 workers purely due to cost.
The market response seems inevitable.
Quite naïve to assume this. Speaking to the most recent round of tech layoffs at my workplace, the higherups said repeatedly it's not based on performance. They didn't elaborate on the methodology at all. We had people who had just been promoted get fired, and we had people who were long-time employees and high performing get fired.
Ours said the same thing. PIPs get axed on every round, but our last one was heavy on employees over the age of 50 ("long-time employees and high performing").
This isn't the sort of thing anyone ever admits what it is, only deny what it isn't.
People don’t like surprises, and they don’t like having plans messed up.
Just because you, personally, might have a role where you (?) aren’t part of plans or don’t do planning doesn’t mean that broadly speaking, you reflect the average of the teams in your company.
It’s far far more likely that if you dont care about your coworkers, you’re an outlier.
The whole industry switched to stack ranking. I wonder what potential long-term effects could emerge.
[1] https://www.businessinsider.com/layoffs-use-cut-low-bad-perf...
This is really going to be the start of the next big shift in who will be the leaders in tech. Many companies that are seen as leaders today will eventually join the group of companies that are no longer seen as leaders.
Now we're gonna see which companies are actually sustainable and which were coasting on dreams and cheap money.
IMHO such a correction was long overdue, but the central banks kept negative rates for far too long while everyone cheered them one because they saw their crypto, stonks and housing portfolios go to the moon and though this was great and nothing bad could happen because "line always goes up".
to be fair, this is likely the case for most large companies even outside SV.
You just have to talk to anyone in any industry to hear crazy stories.
How do you know they haven't had a hiring freeze?
If you are current at headcount X and want to be at headcount Y by the end of the year, you don't let go X-Y people: you need to take into account the expected voluntary attrition for the year as well as any critical hiring you may need to do.
Layoffs are a signal to the stock market that management is taking the problems seriously and cleaning house.
Look at Meta’s stock price. It crashed in 2022 right up to the first layoffs in November. That’s when Zuckerberg declared efficiency is a primary concern. The stock has nearly tripled from November.
Additionally from the perspective of employees - you are taking on most of the burdens of job change - learning new technology, having to familiarize yourself with new people, organization - without the benefit of a higher salary.
Used to work there and they have awesome products and great people. The comments in here seem pretty negative. When I was there they do take those values seriously. I think they are just trying to do their best in a difficult situation? You rather they didn’t take corrective action and drive the company into the ground?!
If we don't like layoffs, then we should also not like crazy hiring sprees either because of their recklessness and waste.
You start firing people, people start refreshing their CV instead. Cooperation at work dies, toxic competition takes its place. It becomes more important to look better than your peers than getting stuff done as a team.
Kills morale, kills productivity, bad for the future. Instead by simply freezing hiring you could "remove" a similar amount of workers in 18/24 months just by the natural turnover that most tech has without the correlated drama.